SB 1603
Initials AG Page 1 Caucus & COW
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
First Regular Session
Senate: HHS DP 4-3-0-0 | 3
rd
Read 18-11-1-0
House: HHS DPA 5-4-0-0
SB 1603: hospital; price transparency
Sponsor: Senator Shamp, LD 29
Caucus & COW
Overview
Directs licensed hospitals to comply with federal hospital price transparency regulations and
demonstrate its compliance to the Arizona Department of Health Services (DHS). Subjects
noncompliant hospitals to a civil penalty.
History
45 C.F.R. Part 180 requires hospitals operating within the U.S. to annually establish, update and
make public a list of the hospital's standard charges for items and services provided by the
hospital, including for diagnosis-related groups (DRGs). The Center for Medicare and Medicaid
Services (CMS) assesses whether a hospital has complied with these requirements. Methods
used to monitor and evaluate hospital compliance with these regulations include but are not
limited to the following: 1) evaluation of complaints made by individuals or entities to CMS; 2)
CMS review of individuals' or entities' analysis of noncompliance; and 3) CMS audit of hospitals'
websites.
If CMS concludes that the hospital is noncompliant with one or more requirements it may take
any of the following actions: 1) provide a written warning notice to the hospital of the specific
violations; 2) request a corrective action plan from the hospital if its noncompliance constitutes a
material violation of one or more requirements; and 3) impose a civil monetary penalty on the
hospital and publicize the penalty on CMS's website if the hospital fails to respond to its request
to submit a corrective action plan or comply with the requirements of a corrective action plan.
Additionally, health care facilities with more than 50 inpatient beds must make available on
request or online the direct pay price for at least the 50 most used DRG codes and outpatient
service codes, if applicable. For health care facilities with 50 or fewer inpatient beds, they must
make available on request or online the direct pay price for at least the 35 most used DRG codes
and outpatient services codes, if applicable. The Arizona State Hospital, Indian Health Service
hospitals and facilities are excluded from these requirements (A.R.S. § 36-437).
Currently, the DHS Director can assess a civil penalty against a person who violates statutes or
rules related to health care institutions in an amount not exceeding $500 for each violation. Each
day that a violation occurs constitutes a separate violation. Statute outlines the factors the DHS
Director must consider when determining the civil penalty (A.R.S. § 36-431.01).
Provisions
1. Requires hospitals to comply with federal hospital price transparency regulations. (Sec. 1)
2. Requires hospitals to annually demonstrate to DHS its compliance with federal hospital price
transparency regulations in a manner prescribed by DHS. (Sec. 1)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note SB 1603
Initials AG Page 2 Caucus & COW
3. Specifies that a hospital that does not comply with the federal hospital price transparency
regulations is subject to a civil penalty. (Sec. 1)
4. Requires, by January 1, 2025, and annually thereafter, DHS to post a report on its public
website containing each hospital's level of compliance with the federal hospital transparency
regulations. (Sec. 1)
5. Makes technical and conforming changes. (Sec. 1, 2)
Amendments
Committee on Health & Human Services
1. Requires DHS to annually verify each hospital's compliance with CMS.
2. States DHS, by January 1, 2025, and annually thereafter, must post a report on its website
containing the name of any hospital that has been found to be noncompliant with the federal
hospital price transparency regulations and that has been assessed a civil monetary penalty
by CMS.
3. Exempts the Arizona State Hospital from the federal hospital price transparency regulations.