Assigned to HHS FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
FACT SHEET FOR S.B. 1603
hospital; price transparency
Purpose
Requires all licensed hospitals to comply with federal hospital price transparency
regulations and requires the Department of Health Services (DHS) to confirm each hospital's
compliance.
Background
Federal hospital price transparency regulations require each hospital operating in the
United States to annually establish, update and make public a list of the hospital's standard charges
for provided items and services, including diagnosis-related groups (DRGs). The Centers for
Medicare and Medicaid Services (CMS) evaluates whether a hospital has complied with the
requirements and may proceed with the following if noncompliant: 1) provide a written warning
notice of the specific violation to the hospital; 2) request a corrective action plan from the hospital;
and 3) impose and publicize a civil monetary penalty on the hospital if the hospital has failed to
respond or comply to CMS' request for a corrective action plan (45 C.F.R. § 180).
Health care facilities, excluding the Arizona State Hospital (ASH) and Indian Health
Service (IHS) hospitals and facilities, are required to make available on request or online the direct
pay price for, at least, the 50 most used DRG and outpatient service codes if the facility has more
than 50 inpatient beds. Whereas, If the facility has 50 or fewer beds, the facility must make
available the direct pay price for, at least, the 35 most used DRG and outpatient service codes.
(A.R.S. § 36-437).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
1. Requires licensed hospitals, including IHS hospitals and ASH, to comply with federal hospital
price transparency regulations.
2. Requires DHS to annually confirm each hospital's compliance with federal hospital price
transparency regulations.
3. Makes technical and conforming changes.
4. Becomes effective on the general effective date.
Prepared by Senate Research
February 3, 2023
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