Notwithstanding any other provision of this chapter, the office shall exempt from Sections 127210 to 127275, inclusive, and shall issue a certificate of need for, any health care project of a health facility that agrees to provide free health care services to indigents over a period of at least five years at a dollar value equal to the dollar value of the exempted project at completion. The annual dollar value of the free care shall be at a level equal to at least 10 percent of the project value as determined in the agreement. The free health care services shall be furnished in the form of direct service or by reimbursement of costs incurred by other facilities if an insufficient number of patients, as determined in the agreement, are referred or present themselves for treatment to account for the minimum 10 percent requirement.
The provision of free care pursuant to this section shall be in accordance with an agreement executed between the health facility granted an exemption and the office. If the health facility does not meet the terms of the agreement, the department shall suspend the license or special permit associated with the exempted project until compliance with the terms is obtained. The obligations imposed by the agreement shall not be discharged by virtue of transfer of ownership, but shall be assumed by a new owner as a condition of transfer.
“Free care,” as used in this section, does not include either of the following:
(a) Bad debt unless the debtor makes specific application for relief as an indigent.
(b) Contractual allowances.
(Added by Stats. 1995, Ch. 415, Sec. 9. Effective January 1, 1996.)