The Hospital Bill
Health & Saf. Code 127405 — charity care or a discount at or below 400 percent of poverty
In California, each hospital maintains an understandable written charity care policy and a discount payment policy. Uninsured patients, and patients with high medical costs, at or below 400 percent of the federal poverty level are eligible under them.
What the discount is. For a patient eligible under the discount payment policy, the hospital limits expected payment to what it would expect in good faith from Medicare or Medi-Cal, whichever is greater. The policy includes an extended payment plan negotiated with regard to family income and essential living expenses, and those plans are interest free.
- Documentation of income is limited to recent pay stubs or income tax returns, and the hospital does not consider the patient's monetary assets.
- There is no time limit for applying, and eligibility may not be denied because of when the application came in.
- A patient is not required to apply for Medicare, Medi-Cal or other coverage before being screened for a discount.
The notice. The hospital gives written notice of these policies at the time of service, during discharge, or when the patient leaves, and mails it within 72 hours if the patient left without it.
Collections wait. The hospital, and any collection agency or debt buyer, may not report adverse information to a consumer credit reporting agency, and may not sue for nonpayment before 180 days after initial billing. A hospital may sell the debt only after finding the patient ineligible or getting no response for 180 days, and in dealing with patients eligible under its policies it may not use wage garnishment or liens on real property.
| The assumption | What the law actually does |
|---|---|
| The assumptionA hospital can ask for every asset before helping | What the law actually doesIncome is shown by recent pay stubs or tax returns, and monetary assets are not considered |
| The assumptionMissing the application window ends the chance | What the law actually doesThere is no time limit, and no denial based on timing |
Insurance appeals, surprise billing rules and the federal rules for nonprofit hospitals are not all on this page. Whether a particular bill qualifies, or a particular collection step was allowed, is a question for a licensed California attorney.
Sources for this section (4)
- Health & Saf. Code 127405 — Hospital fair pricing: charity care and discount payment policies
- Health & Saf. Code 127400 — Hospital fair pricing: definitions
- Health & Saf. Code 127410 — Hospital fair pricing: written notice of the policies
- Health & Saf. Code 127425 — Hospital fair pricing: debt collection and sale of patient debt
Legal information, not legal advice. Verified as of September 2026. Applying it to a particular situation is the work of a licensed California attorney.