Section 127405.
Cal. Health and Safety Code - HSC § 127405.
in effect(a)
(1)
(A)
Each hospital shall maintain an understandable written policy regarding discount payments for financially qualified patients as well as an understandable written charity care policy. Uninsured patients or patients with high medical costs who are at or below 400 percent of the federal poverty level, as defined in subdivision (b) of Section 127400, shall be eligible for participation under a hospital’s charity care policy or discount payment policy. Notwithstanding any other provision of this article, a hospital may choose to grant eligibility for its discount payment policy or charity care policies to patients with incomes over 400 percent of the federal poverty level. Both the charity
care policy and the discount payment policy shall state the process used by the hospital to determine whether a patient is eligible for charity care or discounted payment. In the event of a dispute, a patient may seek review from the business manager, chief financial officer, or other appropriate manager as designated in the charity care policy and the discount payment policy.
(B)
The written policy regarding discount payments shall also include a statement that an emergency physician, as defined in Section 127450, who provides emergency medical services in a hospital that provides emergency care is also required by law to provide discounts to uninsured patients or patients with high medical costs who are at or below 400 percent of the federal poverty level. This statement shall not be construed to impose any additional responsibilities upon the
hospital.
(2)
Rural hospitals, as defined in Section 124840, may establish eligibility levels for financial assistance and charity care at less than 400 percent of the federal poverty level as appropriate to maintain their financial and operational integrity.
(b)
(1)
A hospital’s discount payment policy and charity care policy shall clearly state eligibility criteria based upon income consistent with the application of the federal poverty level. In determining eligibility under its discount payment policy or charity care policy, a hospital shall not consider the monetary assets of the patient.
(2)
A hospital shall not require a patient to apply for Medicare, Medi-Cal, or other coverage before the patient is screened for, or provided, discount payment.
When screening for eligibility for discount payment, a hospital may require the patient to participate in a screening for Medi-Cal eligibility.
(c)
A discount payment policy shall include an extended payment plan to allow payment of the discounted price over time. The policy shall provide that the hospital and the patient shall negotiate the terms of the payment plan, and take into consideration the patient’s family income and essential living expenses. A hospital may also consider the availability of a patient’s health savings account held by the patient or the patient’s family. If the hospital and the patient cannot agree on the payment plan, the hospital shall use the formula described in subdivision (i) of Section 127400 to create a reasonable payment plan.
(d)
(1)
A hospital shall limit expected payment for services it provides to a patient at or below 400 percent of the federal poverty level, as defined in subdivision (b) of Section 127400, eligible under its discount payment policy to the amount of payment the hospital would expect, in good faith, to receive for providing services from Medicare or Medi-Cal, whichever is greater. If the hospital provides a service for which there is no established payment by Medicare or Medi-Cal, the hospital shall establish an appropriate discounted payment. Patients eligible under this article shall not be required to undergo an independent dispute resolution process.
(2)
The hospital may require a patient or guarantor to pay the hospital the entire amount of any reimbursement sent directly to the patient or guarantor by a third-party payer for that hospital’s services.
(3)
If the patient receives a legal settlement, judgment, or award under a liable third party action that includes payment for health care services or medical care related to the injury, the hospital may require the patient or guarantor to reimburse the hospital for the related health care services rendered up to the amount reasonably awarded for that purpose.
(e)
A patient, or patient’s legal representative, who requests a discounted payment, charity care, or other assistance in meeting their financial obligation to the hospital shall make every reasonable effort to provide the hospital with documentation of income
and health benefits coverage. If the person requests charity care or a discounted payment and fails to provide information that is reasonable and necessary for the hospital to make a determination, the hospital may consider that failure in making its determination.
(1)
For purposes of determining eligibility for discounted
payment or charity care, documentation of income shall be limited to recent pay stubs or income tax returns. The hospital may accept other forms of documentation of income but shall not require those other forms. If a patient does not submit an application or documentation of income, a hospital may presumptively determine that a patient is eligible for charity care or discounted payment based on information other than that provided by the patient or based on a prior eligibility determination.
(2)
Information obtained pursuant to paragraph (1) shall not be used for collections activities. This paragraph does not prohibit the use of information obtained by the hospital, collection agency, or assignee independently of the eligibility process for charity care or discounted
payment.
(3)
Eligibility for discounted payments or charity care shall be determined at any time the hospital is in receipt of information specified in paragraph (1). A hospital shall not impose time limits for applying for charity care or discounted
payments, nor deny eligibility based on the timing of a patient’s application.
(f)
(1)
A hospital may waive or reduce Medi-Cal and Medicare cost-sharing amounts as part of its charity care program or discount payment program.
(2)
In waiving or reducing Medicare cost-sharing amounts, the hospital may consider the patient’s monetary assets to the extent required for the hospital to be reimbursed under the Medicare program for Medicare bad debt without seeking to collect cost-sharing amounts from the patient as required by federal law, including, but not limited to, Section 413.89 of Title 42 of the Code of Federal
Regulations. Monetary assets include only assets that are convertible to cash and do not include retirement or deferred compensation plans qualified under the Internal Revenue Code, nonqualified deferred compensation plans, or assets below the maximum community spouse resource allowance under Section 1396r–5(d) of Title 42 of the United States Code.
References
referencesCal. Health and Safety Code - HSC § 127400.
referencesCal. Health and Safety Code - HSC § 127450.
referencesCal. Health and Safety Code - HSC § 124840.
referencesCal. Health and Safety Code - HSC § 413.89.
referencesCal. Health and Safety Code - HSC § 1396r.
Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026