California AB 2123

Existing law, the California Health Facilities Financing Authority Act, establishes the California Health Facilities Financing Authority, which has authority to, among other things, make secured or unsecured loans to, or purchase secured or unsecured loans of, any participating health institution in accordance with an agreement between the authority and the participating health institution to refinance indebtedness incurred by that participating health institution, as specified, in connection with projects undertaken, for health facilities acquired, or for working capital. Existing law also authorizes the authority to award grants to eligible clinics and health facilities, as specified. Existing law establishes the California Health Facilities Financing Authority Fund, a continuously appropriated fund, to carry out the purposes of the act. This bill, the Medical Debt Relief Act of 2026, would establish the medical debt relief program, which would be administered by the authority. The bill would require the authority to enter into an interagency agreement with the Department of Health Care Access and Information to implement the program. The bill would require the authority and department to convene a stakeholder advisory group, as specified, no later than July 1, 2027, to advise on the development, implementation, and administration of the program. The bill would require the stakeholder advisory group, on or before January 1, 2028, to develop recommendations for the authority and department, including, among others, criteria for the ranking and priority of eligible recipients to receive discharge of their medical debt. This bill would authorize the authority, in consultation with the department, to, among other things, contract with a medical debt relief coordinator, as defined, for purposes of acquiring medical debt of eligible recipients either directly from a providing health institution or from a debt buyer, as specified. The bill would require the authority to, among other things, maintain books and records of all the medical debt acquired and canceled. The bill would require the authority to maintain a public internet website for information about the program. This bill would create the California Medical Debt Relief Program Account within the California Health Facilities Financing Authority Fund and would make all moneys in the account available, upon appropriation by the Legislature, to the authority for carrying out the purposes of the Medical Debt Relief Act of 2026. The bill would require the authority, in consultation with the department, to provide a report to the Legislature and Governor by January 1 of each year, starting January 1, 2028. Existing law requires a hospital to report specified financial and utilization data to the Department of Health Care Access and Information, including, among other things, total operating expenses, and deductions from revenue, such as bad debts and charity care. This bill would require a hospital to report to the department outstanding medical debt owed to the hospital, including debt amount, bill adjustments, source of coverage, whether charity care or discount was provided, demographic data, ZIP Code, and whether the debt led to litigation or wage garnishment.