Plain English Breakdown
The official text contains conflicting dates (2026 vs. 2027) for reporting deadlines and methodology goals; the summary uses the later date found in the amended sections.
AB-1113: Rules for How Health Centers Spend Money
This law requires federally qualified health centers to spend at least 90% of their revenue on mission-related costs and sets up a system for reporting, auditing, and penalties if they do not follow the rules.
What This Bill Does
- Requires each federally qualified health center (FQHC) to maintain an annual mission spend ratio of no less than 90 percent.
- Mandates that FQHCs or their parent corporations submit yearly reports on total revenue, including specific IRS forms, by June 30 starting in 2027.
- Requires each FQHC to pay an annual registration fee set by the State Department of Public Health to fund these provisions.
- Orders the State Department of Public Health to calculate mission spend ratios within 90 days of receiving reports and send results to health officials.
- Requires the department to audit financial records reported by FQHCs every three years.
- Imposes fines for failing to report or meet spending rules, including $5,000 for a first violation and $10,000 per month for missing annual reports.
- Allows FQHCs to appeal penalties within 30 days of receiving them by submitting requests to both the department and health services officials.
- Permits FQHCs to avoid paying fines if they agree to spend the penalty amount on mission-directed expenses over a two-year period.
Who It Names or Affects
- Federally qualified health centers (FQHCs) and their parent corporations that receive Medi-Cal funding.
- The State Department of Public Health, which calculates ratios, conducts audits, and manages waivers.
- The State Department of Health Care Services, which receives reports and hears appeals.
Terms To Know
- Mission spend ratio
- A percentage showing how much money a health center spends on mission-directed expenses compared to its total revenue.
- FQHC look-alike
- Health centers that provide similar services and meet certain federal standards but are not officially designated as FQHCs; this law applies exemptions to some of these entities.
- Abatement period
- A two-year time frame where a health center can avoid paying a fine by agreeing to spend the money on mission-related costs instead.
Limits and Unknowns
- The exact method for calculating the ratio will be set later, with a goal of having it ready by January 1, 2028.
- Specific amounts for registration fees and detailed reporting forms have not been decided yet.
- This law does not apply to health centers owned or operated by tribes, urban Indian organizations, state political subdivisions, or those in labor-management cooperation committees.