Assigned to HHS AS PASSED BY COW
ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
AMENDED
FACT SHEET FOR S.B. 1603
hospital; price transparency
Purpose
Requires all licensed hospitals to comply with federal hospital price transparency
regulations, requires the Department of Health Services (DHS) to confirm each hospital's
compliance and subjects noncompliant hospitals to a civil penalty. Requires DHS to post a report
on its public website containing each hospital's level of compliance with federal hospital price
transparency regulations by January 1, 2025, and each year thereafter.
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 (DRG). 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 and Indian Health Service
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).
Statute allows the DHS Director to assess a civil penalty against a person who violates health
care institution statutes in an amount of no more than $500 for each violation, for each day that a
violation occurs. In determining the amount of the civil penalty, DHS must consider:
1) repeated violations of statutes or rules; 2) patterns of noncompliance; 3) types of violations;
4) severity of violations; 5) potential for and occurrences of actual harm; 6) threats to health and safety;
7) the number of persons affected by the violations; 8) the number of violations; 9) the size of the
facility; and 10) the length of time that the violations have been occurring (A.R.S. § 36-431.01).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
1. Requires licensed hospitals to comply with federal hospital price transparency regulations. FACT SHEET – Amended
S.B. 1603
Page 2
2. Requires DHS to annually confirm each hospital's compliance with federal hospital price
transparency regulations.
3. Requires each hospital to annually demonstrate to DHS, in a manner prescribed by DHS, its
compliance with federal hospital price transparency regulations.
4. Subjects any hospital who does not comply with federal hospital price transparency regulations
to a civil penalty.
5. Requires DHS to post a report on its public website containing each hospital's level of
compliance with federal hospital price transparency regulations by January 1, 2025, and each
year thereafter.
6. Makes technical and conforming changes.
7. Becomes effective on the general effective date.
Amendments Adopted by Committee of the Whole
1. Removes the stipulation that each hospital's compliance with federal hospital price
transparency regulations is a condition of licensure.
2. Requires each hospital to demonstrate its compliance with federal hospital price transparency
regulations to DHS.
3. Subjects any hospital who does not comply with federal hospital price transparency regulations
to a civil penalty.
4. Requires DHS to post a report on its public website containing each hospital's level of
compliance with federal hospital price transparency regulations by January 1, 2025, and each
year thereafter.
Senate Action
HHS 2/7/23 DPA 4-3-0
Prepared by Senate Research
February 21, 2023
MM/JM/slp