Bill Text: TX HB3708 | 2025-2026 | 89th Legislature | Comm Sub

---

Bill Title: Relating to charity care provided by certain nonprofit hospitals and hospital systems and the calculation of net patient revenue for purposes of determining the charity care provided by those entities; authorizing an administrative penalty.

Sponsorship: Partisan Bill (Republican 2)

Status: (Introduced - Dead) 2025-05-09 - Committee report sent to Calendars [HB3708 Detail]

Download: Texas-2025-HB3708-Comm_Sub.html

---

89R26079 SRA-F
By: Oliverson, Frank H.B. No. 3708
Substitute the following for H.B. No. 3708:
By: VanDeaver C.S.H.B. No. 3708

A BILL TO BE ENTITLED
AN ACT
relating to charity care provided by certain nonprofit hospitals
and hospital systems and the calculation of net patient revenue for
purposes of determining the charity care provided by those
entities; authorizing an administrative penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 311.045, Health and Safety Code, is
amended by adding Subsection (g) to read as follows:
(g) Notwithstanding Section 311.042(15), when calculating
net patient revenue for the purposes of Subsection (b)(1)(C) of
this section, a nonprofit hospital or hospital system shall include
the revenue of each of its facilities and practices offering
medical services that are located in this state and under the common
governance of a single corporate parent, regardless of the
facility's or practice's distance from the corporate parent,
excepting, as provided by Subsection (d) of this section, any
facility or practice that has been designated as a disproportionate
share hospital under the state Medicaid program.
SECTION 2. Subchapter D, Chapter 311, Health and Safety
Code, is amended by adding Section 311.0453 to read as follows:
Sec. 311.0453. CHARITY CARE SCREENING. (a) In this
section:
(1) "Charity program" means a hospital's or hospital
system's financial assistance and charity care program.
(2) "Commission" means the Health and Human Services
Commission.
(3) "Executive commissioner" means the executive
commissioner of the commission.
(b) This section applies only to:
(1) a nonprofit hospital that has not been designated
as a disproportionate share hospital under the state Medicaid
program; or
(2) with respect to a hospital system, a facility in
the system that has not been designated as a disproportionate share
hospital under the state Medicaid program.
(c) A nonprofit hospital or hospital system to which this
section applies shall inform each patient of the existence of, and
screen each patient for eligibility for, the hospital's or hospital
system's charity program in accordance with this section.
(d) A nonprofit hospital or hospital system may not attempt
to pursue collection of a patient's debt unless the hospital or
hospital system verifies and documents that the patient is not
eligible for the charity program described by Subsection (c).
(e) The executive commissioner by rule shall prescribe the
process a nonprofit hospital or hospital system must use to screen a
patient for eligibility for a charity program. The rules adopted
under this section must provide that a nonprofit hospital or
hospital system:
(1) may not send a billing statement to a patient
unless the hospital or hospital system has conducted the screening
required under Subsection (c);
(2) must apply on the initial billing statement sent
to a patient any charity care discount, health insurance coverage,
or other health benefit to which the patient is entitled; and
(3) must include on each billing statement provided to
a patient a notice stating:
(A) that the hospital or hospital system has a
charity program;
(B) the contact information for the office or
department of the hospital or hospital system that can provide
information about the charity program; and
(C) if applicable, the uniform resource locator
(URL) address of an Internet website maintained by the hospital or
hospital system where the patient can view the charity program.
(f) A patient may apply to receive charity care from a
nonprofit hospital or hospital system regardless of whether the
patient:
(1) was screened for eligibility for the hospital's or
hospital system's charity program and was determined to be
ineligible for charity care; or
(2) disagrees with the amount of the charity care
discount offered by the hospital or hospital system.
(g) If a nonprofit hospital or hospital system becomes aware
that the hospital or hospital system made an incorrect
determination regarding the appropriate amount of a charity care
discount to apply to a patient's account during the screening
required under Subsection (c) based on the information provided by
the patient at the time of the initial determination, the hospital
or hospital system shall:
(1) either:
(A) refund to the patient the difference between
the amount of the charity care discount the patient should have
received and the amount of the charity care discount the patient
actually received; or
(B) if the patient has not made a payment to the
hospital or hospital system, reduce the amount due on the patient's
account by an amount equal to the amount described by Paragraph (A);
and
(2) reimburse the patient for any other associated
reasonable costs, such as legal expenses and fees, incurred by the
patient in securing charity care.
(h) If a nonprofit hospital or hospital system sells a
patient's debt to a collection agency or authorizes a collection
agency to collect the patient's debt on behalf of the hospital or
hospital system and later becomes aware that the amount of the
patient's debt should be reduced under Subsection (g), the hospital
or hospital system shall notify the collection agency within a
reasonable period of time of the hospital's or hospital system's
determination and the correct amount of the debt.
(i) If the commission determines that a nonprofit hospital
or hospital system has failed to comply with a provision of this
section:
(1) on the first violation, the commission shall
institute a corrective action plan for the hospital or hospital
system and publish the plan on the commission's Internet website;
(2) on the second violation, the commission shall
provide written notice to the hospital or hospital system that, if
the hospital or hospital system fails to take action to correct the
failure to comply within the 90-day period following the date on
which the notice is provided, the commission may impose an
administrative penalty of not less than $250,000 on the hospital or
hospital system; and
(3) on the third violation, the commission shall
notify the attorney general of the hospital's or hospital system's
repeated failure to comply with the requirements of this section,
after which the attorney general shall investigate the matter and,
if appropriate, bring an action to declare the hospital or hospital
system ineligible for the tax exemptions described by Section
311.043(b).
SECTION 3. Section 311.045, Health and Safety Code, as
amended by this Act, applies only to a fiscal year of a hospital or
hospital system that begins on or after the effective date of this
Act.
SECTION 4. (a) Not later than December 1, 2025, the
executive commissioner of the Health and Human Services Commission
shall adopt the rules required by Section 311.0453, Health and
Safety Code, as added by this Act.
(b) Section 311.0453, Health and Safety Code, as added by
this Act, applies only to a patient that is screened for the
purposes described by that section on or after January 1, 2026.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.