Bill Brief: Californians Need Access to Community-Based Care
The Issue
Hospital-based outpatient clinics are an essential part of California’s health care delivery system. They provide primary, specialty, and urgent care; behavioral health, oncology, and telehealth services; and chronic disease management. These clinics are an essential part of the health care safety net and care for patients regardless of insurance status, including Medi-Cal beneficiaries who face significant barriers to accessing timely care.
Assembly Bill 225 would prohibit hospitals and health systems from being reimbursed for off-campus patient visits that require evaluation and management services, and all telehealth and preventive services, regardless of where the patient or provider is located.
While intended to reduce health care costs, the bill would instead threaten access to community-based care and increase costs for patients.
Several key facts illustrate why this policy would have the opposite of its intended effect:
- By delivering care in lower-cost health care settings, like urgent care clinics and telehealth, Californians pay less in copays and coinsurance than if they had to receive those services in emergency departments (EDs) or other hospital settings. Reducing access to these services would drive patients into more expensive settings, increasing costs for patients, payers, and the health care system.
- Facility fees help cover the costs of operating these clinics, including staffing, care coordination, interpreter services, technology, compliance activities, and other infrastructure necessary to support patient care. Unlike physician offices, hospital-based outpatient clinics operate under a hospital’s license and must comply with extensive state and federal requirements related to patient safety, quality improvement, credentialing and peer review, nursing oversight, infection prevention, emergency preparedness, charity care, and physical plant and life-safety standards.
- Eliminating facility fees would force hospitals to reduce clinic hours, scale back services, limit telehealth capacity, re-evaluate staffing levels, and, in some communities, close outpatient clinics altogether. This would force patients to seek care in already-crowded EDs (2025 set a record for ED visits in California).
What’s Needed
At a time when 44% of hospitals are operating at a loss and are struggling to maintain essential services and remain open, California should not eliminate hundreds of millions to billions of dollars in funding that supports community-based clinical capacity and keeps care close to home. Policymakers should pursue strategies that lower health care costs without undermining access, destabilizing hospitals, or shifting patients into higher-cost emergency and inpatient settings
California Hospital Association, Labor Unions Withdraw Ballot Measures
SACRAMENTO (June 25, 2026) — Following an agreement among the California Hospital Association (CHA), the California Federation of Labor Unions, AFL-CIO, and SEIU-UHW, the following two initiatives have been withdrawn from the November ballot:
- The Health Care Transparency, Accountability & Union Member Right to Vote Act
- The Health Care Executive Compensation Act of 2026
“Today marks an important step in strengthening the health care system to ensure high-quality health care services are accessible throughout California,” said Carmela Coyle, CHA President & CEO.
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