The California Nurses Association/National Nurses United is again joining with State Senator Bob Wieckowski of Fremont in an effort to require California non-profit hospitals to meet public accountability standards on how much charity care and community benefit services they provide, in exchange for the generous tax benefits they receive in return.
 
SB 346, the Community Benefit and Charity Care at Nonprofit Hospitals act, authored by Wieckowski, is aimed at assuring that non-profit hospitals, which receive billions of dollars in public subsidies and other tax benefits, provide uniformly accountable levels of charity care and community benefit programs.
 
“Even with the implementation of the Affordable Care Act, there are far too many Californians who continue to struggle with access to needed care or un-payable medical bills,” said CNA Co-President Zenei Cortez, RN.
 
“California taxpayers provide enormous subsidies and tax breaks to these hospitals, many of which are part of extremely wealthy hospital systems. Californians deserve to know whether these hospitals are meeting their obligation to provide appropriate levels of charity care and community benefit services,” Cortez added.
 
“We give these hospitals favorable tax treatment, so it makes sense that we come together to establish an appropriate and transparent way to calculate the amount of community benefits we are getting in return,” said Wieckowski.  “This bill makes no changes to how many community benefits a hospital must provide, but it will increase accountability and provide a clearer picture of the level of community benefits invested back into our local communities.”
 
The importance of appropriate provision of charity care and community benefit programs was also highlighted by Attorney General Kamala Harris, who made that one of her conditions Friday in approving the sale of Daughters of Charity hospitals to Prime Healthcare.
 
CNA/NNU is the sponsor of the bill. The Greenlining Institute and the California Rural Legal Assistance Foundation are initial co-sponsors.
 
Similar bills the past two years have fallen short as a result of extensive lobbying by California’s hospital industry, the fourth largest spender in lobbying in California, according to data posted by the Secretary of State. Opposing greater public transparency, responsibility and accountability in their provision of charity care is a major focus of that hospital industry lobbying.
 
An extensive research report by CNA in 2012 documented that California non-profits were accumulating nearly $2 billion a year in public subsidies, tax exempt benefits, beyond what they were returning in charity care. The California State Auditor’s office has also expressed concern over the lack of consistent reporting requirements.
 
SB 346 seeks more uniform standards in California. It would:

• Clearly define what constitutes charity care: The direct provision of care to the uninsured or underinsured. It can not include writing off uncollected fees as “bad debt” or contractual agreements with insurers or other payers that are below the hospital’s inflated gross chargemaster rates.
• Ensure that “community benefit” spending meets real community needs by addressing the root causes of poor health, such as poor nutrition and unsafe housing, as well investing in community building activities.
• Improve reporting requirements for greater public transparency to ensure hospitals are meeting their charity care and community benefit obligation rather than just increasing revenues through marketing, cost containment, or other activities intended to generate profit.
• Require community representation, from underserved populations and a public health department, on each hospital or system’s community benefits planning committee.

Children’s hospitals, county hospitals, other public facilities, and small rural hospitals are exempted.

California hospitals can clearly meet such modest standards. According to American Hospital Association data, California hospitals overall recorded a record $8.7 billion in profits in 2013, and from 2009 through 2013 achieved a total of just under $28 billion in profits.