HB662: HB662 Health; rural hospital organization; revise definition

Georgia law lets taxpayers get a state tax credit for donating to certain rural hospitals, but only hospitals that meet the legal definition of a 'rural hospital organization' can receive those donations. This bill rewrites that definition in O.C.G.A. § 31-8-9.1. Instead of requiring a hospital's main campus to be in a rural county, the bill would qualify a hospital if it provides inpatient hospital services at a rural facility or is a critical access hospital. It lowers the share of revenue that must come from indigent care, charity care, or bad debt from 10 percent to 5 percent, but adds an alternative path: being licensed to provide maternal and newborn services. It also adds a new financial screen, a patient margin test, that excludes hospitals whose margins run more than one standard deviation above the statewide average for otherwise-qualifying hospitals. The bill repeals conflicting laws and does not state a separate effective date beyond the standard process.

• Changes the rural-location test so a hospital qualifies if it provides inpatient services at a rural facility or is a critical access hospital, rather than requiring its primary campus to be in a rural county.
• Lowers the required share of annual net revenue from indigent care, charity care, or bad debt from 10 percent to 5 percent for hospitals that do not offer maternal and newborn services.
• Adds a new qualifying path allowing hospitals licensed to provide maternal and newborn services to meet that same requirement.
• Adds a new financial eligibility rule (subparagraph H) disqualifying hospitals whose three-year average patient margin is more than one standard deviation above the statewide average of similarly qualifying hospitals.
• Keeps existing requirements that hospitals participate in both Medicaid and Medicare, serve indigent patients, file annual IRS Form 990 or an equivalent, and stay current on required audits and reports.

Rural and critical access hospitals in Georgia that seek designation as a 'rural hospital organization,' donors who claim the state tax credit for contributions to these hospitals, and the Department of Community Health, which certifies eligibility and calculates the new patient margin standard.

Whether a hospital counts as a 'rural hospital organization' determines if donations to it qualify for Georgia's tax credit, a funding source many rural hospitals rely on. Changing the location, revenue, and margin tests could add or remove hospitals from that eligible list, affecting available donor funding.

• Section 1 amends paragraph (3) of subsection (a) of O.C.G.A. § 31-8-9.1, the core definition of 'rural hospital organization.'
• Subparagraph (A) shifts from requiring a hospital's primary campus in a rural county to requiring inpatient hospital services at a rural facility or critical access hospital status.
• Subparagraph (D) lowers the indigent/charity/bad debt revenue threshold from 10 percent to 5 percent and adds a maternal and newborn services licensing alternative.
• New subparagraph (H) requires a three-year average patient margin below one standard deviation above the statewide average, defining 'patient margin' as gross patient revenues minus contractual adjustments, bad debt, indigent and charity care, other uncompensated care, and total expenses.
• Section 2 repeals all laws and parts of laws in conflict with the Act.

1. 2026-02-18Senate Read and Referred (Senate)
2. 2026-02-17House Passed/Adopted By Substitute (House)
3. 2026-02-17House Third Readers (House)
4. 2026-02-10House Committee Favorably Reported By Substitute (House)
5. 2025-04-04House Withdrawn, Recommitted (House)
6. 2025-03-03House Committee Favorably Reported By Substitute (House)
7. 2025-03-03House Second Readers (House)
8. 2025-02-28House First Readers (House)

• Angie O'Steen (R, HD-169)Primary sponsor
• Jaclyn Ford (R, HD-170)

1. PassedHouse voteFebruary 17, 2026

   162 yea, 0 nay (4 not voting, 9 absent)

   Passage: House Vote #515

• rural hospitals
• hospital tax credit
• health care funding
• Medicaid and Medicare
• hospital licensing