Welf. & Inst. Code, § 7276

(a) The charge for the care and treatment of all persons who have mental health disorders at state hospitals for whom there is liability to pay therefor shall be determined pursuant to Section 4025. The Director of State Hospitals, or the director’s designee, may reduce, cancel, or remit the amount to be paid by the estate liable for the care and treatment of a person who has a mental health disorder and who is a patient at a state hospital, on satisfactory proof that the estate is unable to pay the cost of that care and treatment or that the amount is uncollectible. If there has been a payment under this section, and the payment or any part thereof is refunded because of the death, leave of absence, or discharge of a patient of the hospital, that amount shall be paid by the hospital or the State Department of State Hospitals to the person who made the payment upon demand, and in the statement to the Controller the amounts refunded shall be itemized and the aggregate deducted from the amount to be paid into the State Treasury, as provided by law. If a person dies at any time while their estate is liable for their care and treatment at a state hospital, the claim for the amount due may be presented to the executor or administrator of their estate, and paid as a preferred claim, with the same rank in order of preference, as claims for expenses of last illness.

(b) (1) The State Department of State Hospitals shall develop and implement a financial assistance program that may reduce or cancel the amount that a patient owes for the cost of care and treatment. The financial assistance program shall provide a process for a patient to apply for financial assistance and the criteria used by the department to determine whether a patient is eligible for a waiver of all costs or discounted payment. The determination of need for financial assistance shall be based upon criteria set forth by the department.

(2) Criteria in determining a patient’s eligibility for the financial assistance program shall be based on a patient’s income, including their monetary assets. If the patient’s income is determined to be at or below 300 percent of the federal poverty level, the patient shall be granted full relief of their cost of care and treatment.

(3) (A) If a patient does not qualify for full relief pursuant to paragraph (2), there shall be a sliding scale of debt relief for patients with an income above 300 percent of the federal poverty level, including payment plans.

(B) The department may develop reasonable payment plans suitable to the patient’s ability to pay, as determined through the department’s review of an application for financial assistance.

(C) The department and the patient shall negotiate the terms of the payment plan and take into consideration the patient’s income, public benefit participation, employment and banking information, or other income to assess against the federal poverty level, as well as liabilities, including, but not limited to, child support, restitution, and essential living expenses. The department shall make all reasonable efforts to determine a patient’s ability to pay.

(D) If the department and the patient cannot agree on the payment plan, the department shall use the reasonable payment plan described in subdivision (i) of Section 127400 of the Health and Safety Code.

(4) The department shall make its financial assistance program policy available to the public on the department’s internet website.

(c) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by means of a departmental letter or other similar instruction, as necessary.