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.
HB 3708 would tighten Texas requirements for certain nonprofit hospitals and hospital systems that provide charity care and financial assistance. The bill changes how net patient revenue is calculated for charity-care compliance by requiring hospitals and hospital systems to include revenue from all Texas facilities and practices under a single corporate parent, with an exception for facilities designated as disproportionate share hospitals under Medicaid. This change is aimed at ensuring that charity-care obligations are measured across the full in-state footprint of a hospital system rather than by isolated facilities.
The bill also creates a new charity care screening process for nonprofit hospitals and hospital systems that are not disproportionate share hospitals. Covered entities must inform patients about the existence of their charity programs, screen patients for eligibility before sending a billing statement, and apply any charity-care discount or other entitled benefit on the initial bill. Hospitals would be prohibited from pursuing collection unless they verify and document that the patient is not eligible for charity care. Patients could still apply for charity care even after an initial denial or if they dispute the amount of assistance offered, and hospitals would have to correct under-discounting by refunding money, reducing balances, and reimbursing reasonable costs incurred by patients in obtaining charity care.
The bill would also require hospitals to notify collection agencies if a patient’s debt should be reduced after being sold or referred for collection. Enforcement would be handled by the Health and Human Services Commission, which would be required to adopt rules by December 1, 2025. For violations, the bill establishes escalating consequences: a corrective action plan for the first violation, a potential administrative penalty of at least $250,000 for a second violation if not corrected within 90 days, and referral to the attorney general after a third violation, with possible action to revoke the hospital’s tax exemptions under Section 311.043(b).
The overall sentiment reflected in the bill’s structure is consumer- and patient-protective, with a clear focus on expanding access to charity care and preventing premature or improper billing and collections. Because there were no recorded committee transcripts or floor votes provided, there is no direct evidence of debate or opposition in the supplied materials. However, the bill’s enforcement provisions and tax-exemption consequences suggest likely concern from nonprofit hospital systems about compliance burdens, revenue impacts, and the scope of state oversight.
In practical terms, the bill would affect nonprofit hospitals and hospital systems in Texas that are not designated as disproportionate share hospitals, as well as the Health and Human Services Commission and the attorney general. It would alter existing charity-care compliance rules, expand disclosure and screening obligations, and create a stronger enforcement framework tied to administrative penalties and tax status.
HB 3708 would amend Chapter 311 of the Health and Safety Code to broaden how nonprofit hospital systems calculate net patient revenue for charity-care purposes and to impose new patient-screening, billing, and debt-collection requirements. It would also authorize administrative penalties and potential tax-exemption consequences for repeated noncompliance, thereby increasing state oversight of nonprofit hospital charity-care practices and affecting hospitals, hospital systems, collection agencies, HHSC, and the attorney general.
The bill appears to have a generally supportive, patient-centered policy orientation, emphasizing charity-care access, billing transparency, and protections against collection before eligibility is verified. No committee testimony or vote record was provided, so there is no direct evidence of partisan or stakeholder sentiment in the supplied materials. Based on the text alone, the measure seems designed to address perceived gaps in hospital charity-care administration and to strengthen enforcement against noncompliance.
The main points of contention likely involve the bill’s operational and financial burden on nonprofit hospitals and hospital systems, especially the requirement to aggregate revenue across all in-state facilities under common governance and the mandate to screen patients before billing. Hospitals may also object to the prohibition on collection activity absent verified charity-care ineligibility, the requirement to reimburse patients for costs incurred in securing charity care, and the steep enforcement ladder that includes a minimum $250,000 administrative penalty and possible loss of tax exemptions. Patient advocates would likely support these provisions as necessary to prevent improper billing and improve access to assistance.