Hospital Price Transparency

As the costs of medical care continue to be a concern for patients, hospital price transparency policies help individuals know the cost of an item or service before receiving it. At the federal level, requirements for hospitals to provide clear pricing information online were enacted beginning January 1, 2021, in Section 2718(e) of the Public Health Service Act and updated by a U.S. Centers for Medicare and Medicaid Services (CMS) Final Rule on January 1, 2024.

A report released by Patient Rights Advocate in July 2023 reported 6 of the 23 Kansas hospitals reviewed fully comply with federal price transparency rules. Nationally, the report found that 36.0 percent of U.S. hospitals fully complied with the law. This has led some states, including Colorado, Florida, Georgia, and Oklahoma, to enact price transparency laws to improve enforcement of the federal policies through oversight and penalties for non-compliance.

Federal Requirements

Hospitals operating in the United States are required by the federal government to provide clear, accessible pricing information online in two forms: as a comprehensive machine-readable file with all items and services, and in a display of shoppable services in a consumer-friendly format (45 CFR § 180).

The regulation defines different types of standard charges that must be public, including:

Gross charges, or the list of all individual items and services maintained by a hospital for which the hospital has established a charge, absent any discounts;
Discounted cash prices, or the charge that applies to an individual who pays cash or cash equivalent for a hospital item or service; and
Charges negotiated between the hospital and third-party payers.

Complaints and Enforcement

CMS audits a sample of hospitals regularly and investigates submitted complaints. CMS has three avenues for monitoring and accessing hospitals’ non-compliance:

• Evaluating complaints made by the public;
• Review of individuals’ and entities’ analysis of non-compliance; and
• Internal audits of hospitals’ websites.

Hospitals found to be non-compliant receive a first warning with instructions for correcting deficiencies within 90 days. If a hospital is still out of compliance after 90 days, CMS issues a correction action plan (CAP) request with a 45-day deadline for the hospital to submit a CAP. The hospital must then propose a completion date for CMS approval, which is typically between 30 and 90 days. Hospitals with continued non-compliance issues may face civil monetary penalties (CMPs), which may be scaled based on hospital bed count. CMS reports that the average time to complete a case cycle is 195 to 220 days.

As of April 2023, CMS reported completing more than 200 comprehensive hospital reviews per month. Since August 14, 2024, CMS has issued 1,313 warning notices, 825 CAP requests, and 14 CMP notices. Note: To date, no Kansas hospitals have received a CMP notice.

State Actions

As of July 19, 2024, 23 states, including Kansas, have considered bills related to price transparency laws. In addition to those bills that would codify federal price transparency requirements into state law and enhance enforcement, states also considered bills requiring entities, such as manufacturers, pharmacy benefit managers, health plans, and others, to report information regarding price increases and high-priced new drugs.

Consumer Protection Related to Hospital Price Transparency Act (2024 HB 2825)

In 2024, the House Committee on Insurance held a hearing on HB 2825, which would have created the Consumer Protection Related to Hospital Price Transparency Act (Act). The bill would have established requirements for hospitals to provide certain pricing information to the public, provided the Attorney General (AG) with enforcement authority, and established procedures for hospitals not in compliance with the Act. Specifically, the bill would have provided patients with the ability to file a civil action against hospitals out of compliance with the Act and the AG with the ability to fine such hospitals $250 per day of non-compliance. Non-compliance with the provisions of the Act would have constituted an unlawful or deceptive trade practice under the Kansas Consumer Protection Act.

The bill was passed by the House Committee on Insurance and amended by the House Committee of the Whole to also cover health insurers. The motion to recommend the bill favorably failed, and the bill died on the House Calendar.