California Lawmaker Seeks Stricter Community Benefit Standards for Nonprofit Hospitals

In exchange for massive tax breaks, private nonprofit hospitals in California are required to provide community benefits. But healthcare advocates have long argued that many of the large nonprofit hospital systems in the state have fallen short in this social obligation and have failed to provide meaningful benefits for low-income people — raising questions about whether the tax-exempt status of these organizations is truly justified. The debate was the subject of a recent Express cover story, "Fatal System Error," which examined disparities in how private nonprofit hospitals and public institutions care for poor and uninsured patients in the East Bay.

Now, state Senator Bob Wieckowski (D-Fremont) and a group of healthcare advocates are pushing to reform the way the state regulates nonprofit hospitals through legislation that would establish clearer standards for community benefits. Senate Bill 346, which Wieckowski and the California Nurses Association announced today, would create specific definitions for "charity care" — meaning free or discounted health services that hospitals provide to low-income patients — and would establish new requirements for how nonprofits report their community benefits.

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