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New Legislation Would Force Nonprofit Hospitals To Disclose Charity Care Spending

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SACRAMENTO (CBS13) – At a time their CEOs are earning record salaries, a proposed law would force California nonprofit hospitals to clearly explain their charity work to determine if enough money is really being spent on charity care.

Sutter Health, a nonprofit, reported $9 billion in operating revenue in 2011. It spent $140 million on charity care

“All you need to do is look at the facts and see there’s 1.9 billion in public subsidies in the form of taxes not paid, greater than charitable care provided by private nonprofit hospitals,” said Assemblymember Rob Bonta (D-Oakland).

AB 975, which is co-authored by Bonta, would aim at increasing charity care delivered by tax-exempt nonprofit hospitals to at least 5 percent of the hospital’s net revenue. It would define charity care as direct care to patients. It would also ban nonprofit hospitals from claiming charity payments on uncollected fees or accounts written off as bad debt, care provided to patients for which a public program pays for any of the charges, and care for which partial payment was received from any source.

The California Hospital Association is opposing the bill.

“All the hospitals in California, every day work to try and improve the access to care in their community and they work to provide access to care particularly to low-income patients,” said Jan Emerson-Shea, California Hospital Association. “This bill would make it worse.”

In California and across the country, nonprofit hospitals are dealing with an epidemic of public relations problems.

One recent survey showed one in five California nonprofit hospital CEOs earn million-dollar salaries annually. The survey showed the top earner, Kaiser Permanente’s George Halveron, made more than $7 million a year.

The newly introduced bill is being seen as incredibly controversial, pitting the nurses unions against the hospital association.

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