Assembly BillPassed first houseHealth and Safety
AB 225: Health care: facility fees.
What AB 225 does, verified July 3, 2026
<p>The proposed bill aims to amend existing laws regarding patient funds in state hospitals for individuals with mental health disorders. The bill would allow state hospitals to use patient funds for the welfare of the patients, in addition to existing uses such as education or entertainment. Hospital administrators must notify patients, patient governments, and patient groups in writing about any newly authorized expenditure options for the benefit fund.</p> <p>Existing laws already permit the deposit of patient funds in trust and the hospital administrator to manage these funds. However, the proposed bill expands the purposes for which these funds can be used, while maintaining existing requirements for consideration of patient recommendations and approval from the director of state hospitals.</p>
Bill journey
✓IntroducedComplete
✓In CommitteeComplete
✓First Chamber FloorComplete
4Second ChamberCurrent
5GovernorPending
6ChapteredPending
Last action: In committee: Set, first hearing. Hearing canceled at the request of author. (2026-06-30)Alert me
Author and sponsors
Full contact details, staff, and committees with Connect, $16/moUnlockRecent actions13 total · showing 5
| Jun. 30, 2026 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Jun. 23, 2026 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on HEALTH. |
| Jun. 03, 2026 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on HEALTH. |
| May. 07, 2025 | Referred to Com. on HEALTH. |
| Apr. 24, 2025 | Read third time. Passed. Ordered to the Senate. (Ayes 75. Noes 0. Page 1278.) |
Latest bill textAmended version, June 23, 2026 · 2,673 words
| Amended IN Senate June 23, 2026 |
| Amended IN Senate June 03, 2026 |
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
Assembly Bill
No. 225
| Introduced by Assembly Member Bonta |
January 09, 2025 |
An act to add Section Sections 1371.143 and 128739 to, and to add Article 4 (commencing with Section 127480) to Chapter 2.5 of Part 2 of Division 107 of, the Health and Safety Code, and to add Section 10123.858 to the Insurance Code, relating to health care.
LEGISLATIVE COUNSEL'S DIGEST
AB 225, as amended, Bonta. Health care: facility fees.
Existing law establishes the Department of Health Care Access and Information to oversee various aspects of the health care market, including oversight of hospital facilities and community benefit plans. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act’s requirements a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law provides for the licensure and regulation of general acute care hospitals and clinics by the State Department of Public Health.
This bill would would, beginning on January 1, 2028, prohibit a health care provider, hospital, or health system from charging, billing, or collecting a facility fee for any outpatient services in specified circumstances, including for specified preventative health care services and health care services furnished via telehealth. The bill would not prohibit the billing of a professional fee. The bill would require a health care provider, hospital, or health system to provide notice, as specified, to a patient at the time of scheduling and at check-in if a facility fee will be charged. The bill would require the Director of the Department of Health Care Access and Information to impose an administrative penalty pursuant to a specified process for each violation against a health care provider, hospital, or health system that fails to comply with these provisions. The bill would specify that multiple violations identified during the same investigation constitute a single violation for purposes of assessing an administrative penalty. The bill would require a health care provider, hospital, or health system to reimburse the patient or patients any amount actually paid for a prohibited facility fee.
The bill would would, beginning on January 1, 2028, prohibit a health care service plan or health insurer from reimbursing, paying, or otherwise providing coverage for any prohibited facility fee. The bill would prohibit a plan from including in any contract or provider agreement any term permitting payment of a prohibited facility fee, and would prohibit a plan or insurer from passing through or otherwise shifting the fee to an enrollee or insured. Because a willful violation of these provisions relative to health care service plans would be a crime, this bill would impose a state-mandated local program.
The bill would, beginning on January 1, 2028, require a hospital or health system, as defined, to file a report with the Department of Health Care Access and Information regarding specified information on the facility fees charged, including the number of patient visits at each facility where a facility fee was charged or billed and the total amount of fees charged. The bill would authorize the department to incorporate this report into an existing reporting requirement to minimize costs.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The people of the State of California do enact as follows:
SECTION 1.
Section 1371.143 is added to the Health and Safety Code, to read:1371.143.
(a) A health care service plan shall not reimburse, pay, or otherwise provide coverage for a facility fee prohibited under Article 4 (commencing with Section 127480) of Chapter 2.5 of Part 2 of Division 107.(b) A plan shall not include in a contract or provider agreement a term permitting payment of a prohibited facility fee.
(c) A plan shall deny payment for any claim that includes a prohibited facility fee.
(d) A plan shall not pass through or otherwise shift a prohibited facility fee to an enrollee.
(e) This section shall be enforced by the Department of Managed Health Care.
(f) This section shall become operative on January 1, 2028.
SEC. 2.
Article 4 (commencing with Section 127480) is added to Chapter 2.5 of Part 2 of Division 107 of the Health and Safety Code, to read:Article 4. Facility Fees
127480.
For purposes of this article, the following definitions apply:(a) “Campus” means any of the following:
(1) A hospital’s main buildings.
(2) The physical area immediately adjacent to the hospital’s main buildings and other areas and structures located within 250 yards of the main buildings.
(3) Any other area determined by the federal Centers for Medicare and Medicaid Services to be part of the hospital campus on an individual case basis.
(b) “Evaluation and management services” means outpatient evaluation and management services billed under Current Procedural Terminology (CPT) codes 99202 through 99215, inclusive, or successor codes.
(c) (1) “Facility fee” means any fee charged or billed by a health care provider for outpatient services provided in a hospital-based facility, clinic, or physician practice that meets all of the following:
(A) Intended to compensate the provider for operational expenses, overhead, or related costs.
(B) Separate and distinct from a professional fee.
(C) Charged regardless of the modality of service delivery.
(2) A facility fee does not include any either of the following:
(A) Any
payment expressly required under federal law for a service required to be billed using an institutional claim form.(B) Per-visit payments for federally qualified health center or rural health clinic services described in Section 14132.100 of the Welfare and Institutions Code.
(d) “Health care provider” means an individual, entity, corporation, person, or organization, whether for profit or nonprofit, that furnishes, bills, or is paid for health care services in the normal course of business, including, but not limited to, health systems, hospitals, hospital-based facilities, clinics licensed pursuant to Section 1200, urgent care clinics, and physician practices.
(e) “Health system” means either of the following:
(1) A parent corporation of one or more hospitals and any entity affiliated with that parent corporation through ownership, governance, membership, or other means.
(2) A hospital and any entity affiliated with that hospital through ownership, governance, membership, or other means.
(f) “Hospital” means a general acute care hospital as defined in Section 1250. 127400.
(g) “Hospital-based facility” means a facility owned, operated, or controlled, in whole or in part, by a hospital or health system, including any provider-based department of a hospital.
(h) “Physician practice” or “clinic” means any outpatient location, clinic licensed pursuant to Section 1200, physician office, or other ambulatory site where health care services are provided, including locations acquired or newly affiliated with a hospital or health system.
(i) “Professional fee” means any fee charged or billed for professional medical services furnished by a licensed practitioner.
127481.
(a) A health care provider, hospital, or health system shall provide notice to a patient at the time of scheduling and at check-in if a facility fee will be charged for a service. The notice shall include all of the following:(1) A statement that a facility fee may be charged.
(2) A good-faith estimate of the amount of the facility fee.
(3) An explanation of the difference between a professional fee and a facility fee.
(4) Whether a facility fee for the scheduled service is prohibited under this article.
(5) The following statement in type no smaller than 14-point font:
“You may be charged a ‘facility fee’ in addition to the professional fee for your visit. A facility fee is a separate charge intended to cover the operating costs of the hospital or health system and is not a charge for the services of your clinician. Under California law, facility fees are prohibited for preventive services and telehealth services. You cannot be charged a facility fee for this service if it is prohibited by law. If you believe you were charged a facility fee in error, you may contact the provider, file a complaint with the Department of Health Care Access and Information’s Hospital Bill Complaint Program, or seek a refund and other remedies under state law.”
(b) A provider shall post on its internet website a list of services for which a facility fee may be charged, if permitted under this article.
(c) A patient bill shall separately itemize any facility fee allowed under law.
127481.127482.
(b) The prohibition in subdivision (a) applies regardless of any of the following:
(1) The Medicare provider-based designation of the location.
(2) The place of service code submitted on any claim.
(3) Whether the location is owned, affiliated, or newly acquired by a hospital or health system.
(4) The terminology used to describe the fee, including, but not limited to, “facility fee,” “clinic visit fee,” “technical component,” or any similar term.
(c) This section does not prohibit the billing of a professional fee.
127482.127483.
(b) The prohibition in subdivision (a) applies to all telehealth services, including, but not limited to, any of the following:
(1) Evaluation and management services.
(2) Behavioral health and substance use disorder services.
(3) Consultations and followup visits.
(4) Store and forward services.
(5) Synchronous or asynchronous audiovisual or audio-only communications.
(c) This section applies regardless of any of the following:
(1) Whether the telehealth service is furnished by a hospital, hospital-based facility, clinic, or physician practice.
(2) Whether the provider is located on or off a hospital campus.
(3) Whether the service is billed using a professional claim or an institutional claim.
(4) The place of service code, modifier, or billing methodology used.
(d) This section does not prohibit the billing of a professional fee for telehealth services.
(e) A facility fee shall not be charged for telehealth services solely because the provider is affiliated with, employed by, or bills through a hospital or health system.
127483.127484.
(a) Section 1367.002.
(b) Section 120164.
(c) Section 10112.2 of the Insurance Code.
127484.127485.
(b) (1) (A) Upon receipt of a complaint by a patient that a health care provider, hospital, or health system has not followed the requirements of this article, the director shall review the health care provider, hospital, or health system’s compliance with this article and, if the director believes that the health care provider, hospital, or health system may have violated this article, issue a notice to the health care provider, hospital, or health system stating that the entity may have violated this article. The notice shall state all of the facts supporting the alleged violation.
(B) The entity shall have 30 days after issuance of the notice to file a response with the director.
(2) If, after considering all of the information included in any response filed by the health care provider, hospital, or health system, the director determines that a violation has occurred, the director shall assess an administrative penalty consistent with the process of Section 127436.
(3) A health care provider, hospital, or health system shall reimburse the patient or patients any amount actually paid for a prohibited facility fee consistent with the process of Section 127440.
127486.
The department may adopt regulations, including emergency regulations, necessary to implement this article.127487.
This article shall become operative on January 1, 2028.SEC. 3.
Section 128739 is added to the Health and Safety Code, to read:128739.
(a) A hospital and health system, as defined in Section 127480, shall file with the department, at a time required by the department, a report on facility fees that includes all of the following:(1) The name and address of each facility owned or operated by the hospital or health system that provides services for which a facility fee is charged or billed, including an indication as to whether the facility is located on or outside of the hospital or health system campus, as defined in Section 127480.
(2) The number of patient visits at the facilities described in paragraph (1).
(3) The number, total amount, and range of allowable facility fees paid at each of those facilities, disaggregated by payer mix.
(4) The total amount of facility fees charged at each facility.
(5) The total amount of revenue received by the hospital or health system derived from the facility fees charged at those facilities.
(6) The total amount of facility fees charged and the total amount of revenue received by the hospital or health system from all facilities derived from facility fees.
(7) A description of the top ten procedures or services that generated the greatest amount of facility fee gross revenue, disaggregated by current procedural terminology category code for each of those procedures or services.
(8) The top ten procedures or services for which facility fees are charged based on patient volume and the gross and net revenue received by the hospital or health system for each of those procedures or services, disaggregated by on campus and off campus.
(b) For purposes of this section, “facility” means a hospital-based facility that is located on a hospital campus or outside a hospital campus.
(c) In order to minimize costs and administrative burdens, the department may consider incorporating the report required by this section into another required report under this chapter.
(d) The department may adopt regulations, including emergency regulations, necessary to implement this section.
(e) This section shall become operative on January 1, 2028.
SEC. 3.SEC. 4.
10123.858.
(a) A health insurer shall not reimburse, pay, or otherwise provide coverage for a facility fee prohibited under Article 4 (commencing with Section 127480) of Chapter 2.5 of Part 2 of Division 107 of the Health and Safety Code.(b) A plan shall not include in a contract or provider agreement a term permitting payment of a prohibited facility fee.
(c) An insurer shall deny payment for any claim that includes a prohibited facility fee.
(d) An insurer shall not pass through or otherwise shift a prohibited facility fee to an insured.
(e) This section shall be enforced by the Insurance Commissioner.
(f) This section shall become operative on January 1, 2028.
SEC. 4.SEC. 5.
Text of AB 225 as amended, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions