AN ACT relating to health care price transparency.

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AN ACT relating to health care price transparency. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 216B IS CREATED TO 3
READ AS FOLLOWS: 4
As used in Sections 1 to 7 of this Act, unless context requires otherwise: 5
(1) "Ancillary service" means a facility item or service that a facility customarily 6
provides as part of a shoppable service; 7
(2) "Cabinet" means the Cabinet for Health and Family Services; 8
(3) "Chargemaster" means the list of all facility items or services maintained by a 9
facility for which the facility has established a charge; 10
(4) "De-identified maximum negotiated charge" means the highest charge that a 11
facility has negotiated with all third-party payors for a facility item or service; 12
(5) "De-identified minimum negotiated charge" means the lowest charge that a 13
facility has negotiated with all third-party payors for a facility item or service; 14
(6) "Discounted cash price" means the charge that applies to an individual who pays 15
cash, or a cash equivalent, for a facility item or service; 16
(7) "Facility" means a hospital licensed under this chapter; 17
(8) "Facility items or services" means all items and services, including individual 18
items and services and service packages, that may be provided by a facility to a 19
patient in connection with an inpatient admission or an outpatient department 20
visit, as applicable, for which the facility has established a standard charge, 21
including: 22
(a) Supplies and procedures; 23
(b) Room and board; 24
(c) Use of the facility and other areas, the charges for which are generally 25
referred to as facility fees; 26
(d) Services of physicians and nonphysician practitioners employed by the 27
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facility, the charges for which are generally refe rred to as professional 1
charges; and 2
(e) Any other item or service for which a facility has established a standard 3
charge; 4
(9) "Gross charge" means the charge for a facility item or service that is reflected on 5
a facility’s chargemaster, absent any discounts; 6
(10) "Machine-readable format" means a digital representation of information in a 7
file that can be imported or read into a computer system for further processing, 8
and includes .XML, .JSON, and .CSV formats; 9
(11) "Payor-specific negotiated charge" means the charge that a facility has 10
negotiated with a third-party payor for a facility item or service; 11
(12) "Service package" means an aggregation of individual facility items or services 12
into a single service with a single charge; 13
(13) "Shoppable service" me ans a service that may be scheduled by a health care 14
consumer in advance; 15
(14) "Standard charge" means the regular rate established by the facility for a facility 16
item or service provided to a specific group of paying patients, and includes all of 17
the following as defined in this section: 18
(a) The gross charge; 19
(b) The payor-specific negotiated charge; 20
(c) The de-identified minimum negotiated charge; 21
(d) The de-identified maximum negotiated charge; and 22
(e) The discounted cash price; and 23
(15) "Third-party pay or" means an entity or government program that provides 24
coverage for health care services that are furnished to the entity's or program's 25
insureds or beneficiaries. 26
SECTION 2. A NEW SECTION OF KRS CHAPTER 216B IS CREATED TO 27
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READ AS FOLLOWS: 1
Notwithstanding any other law to the contrary, a facility shall make public a: 2
(1) Digital file in a machine -readable format that contains a list of all standard 3
charges, expressed in dollar amounts, for all facility items or services as described 4
in Section 3 of this Act; and 5
(2) Consumer-friendly list of standard charges, expressed in dollar amounts, for a 6
limited set of shoppable services as provided in Section 4 of this Act. 7
SECTION 3. A NEW SECTION OF KRS CHAPTER 216B IS CREATED TO 8
READ AS FOLLOWS: 9
(1) A facility shall maintain a chargemaster of all standard charges, expressed in 10
dollar amounts, for all facility items or services in accordance with this section. 11
(2) The standard cha rges contained in the chargemaster shall reflect the standard 12
charges, expressed in dollar amounts, applicable to that location of the facility, 13
regardless of whether the facility operates in more than one (1) location or 14
operates under the same license as another facility. 15
(3) The chargemaster shall include the following items, as applicable: 16
(a) A description of each facility item or service provided by the facility; 17
(b) The following standard charges, expressed in dollar amounts, for each 18
individual faci lity item or service when provided in either an inpatient 19
setting or an outpatient department setting, as applicable: 20
1. The gross charge; 21
2. The de-identified minimum negotiated charge; 22
3. The de-identified maximum negotiated charge; 23
4. The discounted cash price; and 24
5. The payor-specific negotiated charge, listed by the name of the third -25
party payor and plan associated with the charge and displayed in a 26
manner that clearly associates the charge with each third -party payor 27
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and plan; and 1
(c) Any code used b y the facility for purposes of accounting or billing for the 2
facility item or service, including the Current Procedural Terminology 3
(CPT) code, Healthcare Common Procedure Coding System (HCPCS) code, 4
Diagnosis Related Group (DRG) code, National Drug Code ( NDC), or other 5
common identifier. 6
(4) The information contained in the chargemaster shall be published in a single 7
digital file that is in a machine-readable format. 8
(5) The chargemaster required under subsection (1) of this section shall be displayed 9
in a prominent location on the home page of the facility’s publicly accessible 10
website or accessible by selecting a dedicated link that is prominently displayed on 11
the home page of the facility’s publicly accessible website. If the facility operates 12
multiple l ocations and maintains a single website, the chargemaster required 13
under subsection (1) of this section shall be posted for each location the facility 14
operates in a manner that clearly associates the chargemaster with the applicable 15
location of the facility. 16
(6) The chargemaster required under subsection (1) of this section shall: 17
(a) Be available: 18
1. Free of charge; 19
2. Without having to register or establish a user account or password; 20
3. Without having to submit personal identifying information; and 21
4. Without having to overcome any other impediment, including entering 22
a code to access the list; 23
(b) Be accessible to a common commercial operator of an internet search 24
engine to the extent necessary for the search engine to index the list and 25
display the list as a result in response to a search query of a user of the 26
search engine; 27
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(c) Be formatted in a manner prescribed by the cabinet; 1
(d) Be digitally searchable; and 2
(e) Use the naming convention specified by the Centers for Medicare and 3
Medicaid Services on its website. 4
(7) The facility shall update the chargemaster at least one (1) time each year. The 5
facility shall clearly indicate the date on which the list was most recently updated, 6
either on the chargemaster or in a manner that is clearly associated wit h the 7
chargemaster. 8
(8) The cabinet shall promulgate administrative regulations in accordance with KRS 9
Chapter 13A to establish a template for each facility to use to create the 10
chargemaster. The cabinet shall: 11
(a) Consider any applicable federal guidelines for formatting similar 12
chargemasters required by federal law or rule and ensure that the design of 13
the template enables health care researchers to compare the charges 14
contained in the chargemasters maintained by each facility; and 15
(b) Design the template to be substantially similar to the wide -format .CSV 16
template used by the Centers for Medicare and Medicaid Services for 17
purposes similar to those of this section. 18
SECTION 4. A NE W SECTION OF KRS CHAPTER 216B IS CREATED TO 19
READ AS FOLLOWS: 20
(1) (a) A facility shall maintain and make publicly available a chargemaster of the 21
standard charges described by subsection (3)(b) of Section 3 of this Act for 22
each of at least three hundred (30 0) shoppable services provided by the 23
facility. The facility may select the shoppable services to be included in the 24
chargemaster, except that the chargemaster shall include: 25
1. The services specified as shoppable services by the Centers for 26
Medicare and Medicaid Services; or 27
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2. If the facility does not provide all the shoppable services described by 1
subparagraph 1. of this paragraph, as many of those shoppable 2
services as the facility does provide. 3
(b) If a facility does not provide three hundred (300) sho ppable services, the 4
facility shall maintain a chargemaster of the total number of shoppable 5
services that the facility provides in a manner that otherwise complies with 6
the requirements of paragraph (a) of this subsection. 7
(2) In selecting a shoppable ser vice for purposes of inclusion in the chargemaster 8
required under subsection (1) of this section, a facility shall: 9
(a) Consider how frequently the facility provides the service and the facility’s 10
billing rate for that service; and 11
(b) Prioritize the selec tion of services that are among the services most 12
frequently provided by the facility. 13
(3) The chargemaster required under subsection (1) of this section: 14
(a) Shall include: 15
1. A plain-language description of each shoppable service included; 16
2. The payor -specific negotiated charge, expressed in a dollar amount, 17
that applies to each shoppable service included and any ancillary 18
service, listed by the name of the third-party payor and plan associated 19
with the charge and displayed in a manner that clearly assoc iates the 20
charge with the third-party payor and plan; 21
3. The discounted cash price, expressed in a dollar amount, that applies 22
to each shoppable service included and any ancillary service or, if the 23
facility does not offer a discounted cash price for one ( 1) or more of 24
the shoppable or ancillary services, the gross charge for the shoppable 25
service or ancillary service, as applicable; 26
4. The de -identified minimum negotiated charge, expressed in a dollar 27
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amount, that applies to each shoppable service included and any 1
ancillary service; 2
5. The de -identified maximum negotiated charge, expressed in a dollar 3
amount, that applies to each shoppable service included and any 4
ancillary service; and 5
6. Any code used by the facility for purposes of accounting or billing for 6
each shoppable service included and any ancillary service, including 7
the CPT, HCPCS, DRG, or NDC code, or other common identifier; 8
(b) If applicable, shall: 9
1. State each location at which the facility provides the shoppable service 10
and whether the st andard charges included apply at that location to 11
the provision of that shoppable service in an inpatient setting, an 12
outpatient department setting, or both of those settings, as applicable; 13
and 14
2. Indicate if one (1) or more of the shoppable services spec ified by the 15
Centers for Medicare and Medicaid Services is not provided by the 16
facility; and 17
(c) As applicable, shall be: 18
1. Displayed in the manner prescribed in subsection (5) of Section 3 of 19
this Act, for the chargemaster required under that section; 20
2. Available: 21
a. Free of charge; 22
b. Without having to register or establish a user account or 23
password; 24
c. Without having to submit personal identifying information; and 25
d. Without having to overcome any other impediment, including 26
entering a code to access the chargemaster; 27
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3. Searchable by service description, billing code, and payor; 1
4. Updated in the manner prescribed in Section 3 of this Act for the 2
chargemaster required under that section; 3
5. Accessible to a common commercial operator of an internet search 4
engine to the extent necessary for the search engine to index the list 5
and display the chargemaster as a result in response to a search query 6
of a user of the search engine; and 7
6. Formatted in a manner that is consistent with the format prescribed by 8
the cabinet in Section 3 of this Act. 9
SECTION 5. A NEW SECTION OF KRS CHAPTER 216B IS CREATED TO 10
READ AS FOLLOWS: 11
(1) The cabinet shall monitor each facility's compliance with the requirements of 12
Sections 2, 3, and 4 of this Act using any of the following methods: 13
(a) Evaluating complaints made by persons to the cabinet regarding 14
noncompliance; 15
(b) Reviewing any analysis prepared regarding noncompliance; and 16
(c) Auditing the websites of facilities for compliance with this section. 17
(2) If the cabinet determines that a facility is not in compliance with a provision of 18
Section 2, 3, or 4 of this Act the cabinet shall take the following actions: 19
(a) Provide a written notice to the facility that clearly explains the manner in 20
which the facility is not in compliance; 21
(b) Request a corrective action plan from the facility if the facility has 22
materially violated a provision of Section 2, 3, or 4 of this Act; and 23
(c) Impose an administrative penalty, as determined under Section 7 of this Act, 24
on the facility and publicize the penalty on the cabinet's internet website if 25
the facility fails to: 26
1. Respond to the cabinet's request to submit a corrective action plan; or 27
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2. Comply with the requirements of a corrective action plan submitted to 1
the cabinet. 2
(3) Beginning no later than ninety (90) days after the effective date of this Act, the 3
cabinet shall create and maintain a publicly available list on its website of 4
hospitals that have been found to have violated Section 2, 3, or 4 of this Act, or 5
that have been issued an administrative penalty or sent a warning notice, a 6
request for a corrective action plan, or any other written communication from the 7
cabinet related to the requirements of Section 2, 3, or 4 of this Act. Such 8
penalties, notices, and communications shall be subject to public disclosure 9
under 5 U.S.C. sec. 552, notwithstanding any exemptions or exclusions to the 10
contrary, in full without red action. This list shall be updated at least every thirty 11
(30) days thereafter. 12
(4) Notwithstanding any provision of law to the contrary, in considering an 13
application for renewal of a hospital’s license or certification, the cabinet shall 14
consider whether the hospital is or has been in compliance with Section 2, 3, or 4 15
of this Act. 16
SECTION 6. A NEW SECTION OF KRS CHAPTER 216B IS CREATED TO 17
READ AS FOLLOWS: 18
(1) A facility materially violates Section 2, 3, or 4 of this Act if the facility fails to: 19
(a) Comply with the requirements; or 20
(b) Publicize the facility's standard charges in the form and manner required. 21
(2) If the cabinet determines that a facility has materially violated Section 2, 3, or 4 22
of this Act, the cabinet shall issue a notice of material violation to the facility and 23
request that the facility submit a corrective action plan. The notice shall indicate 24
the form and manner by which the corrective action plan shall be submitted to 25
the cabinet, and clearly state the date by which the facility shall submit the plan. 26
(3) A facility that receives a notice under subsection (2) of this section shall: 27
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(a) Submit a corrective action plan in the form and manner and by the specified 1
date prescribed by the notice of violation; and 2
(b) As soon as practicable after submission of a corrective action plan to the 3
cabinet, comply with the plan. 4
(4) A corrective action plan submitted to the cabinet shall: 5
(a) Describe in detail the corrective action the facility will take to address any 6
violation identified by the cabinet in the notice provided under subsection 7
(2) of this section; and 8
(b) Provide a date by which the facility will complete the corrective action. 9
(5) A corrective action plan shall be subject to review and approval by the cabinet. 10
After the cabinet reviews and approves a facility’s corrective action plan, the 11
cabinet shall monitor and evaluate the facility’s compliance with the plan. 12
(6) A facility is considered to have failed to respond to the cabinet's request to submit 13
a corrective action plan if the facility fails to submit a corrective action plan: 14
(a) In the form and manner specified in the notice provided; or 15
(b) By the date specified in the notice provided under subsection (2) of this 16
section. 17
(7) A facility is considered to have failed to comply with a corrective action plan if 18
the facility fails to address a violation within the specified period o f time 19
contained in the plan. 20
SECTION 7. A NEW SECTION OF KRS CHAPTER 216B IS CREATED TO 21
READ AS FOLLOWS: 22
(1) The cabinet shall impose an administrative penalty on a facility if the facility fails 23
to: 24
(a) Respond to the cabinet's request to submit a corrective action plan; or 25
(b) Comply with the requirements of a corrective action plan submitted to the 26
cabinet. 27
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(2) The cabinet shall impose an administrative penalty on a facility for a violation of 1
each requirement of Sect ions 1 to 7 of this Act. The cabinet shall set the penalty 2
in an amount sufficient to ensure compliance by a facility with the provisions of 3
Sections 2, 3, and 4 of this Act subject to the limitations in subsection (3) of this 4
section. 5
(3) The penalty imposed by the cabinet shall not be lower than: 6
(a) In the case of a hospital with a bed count of thirty (30) or fewer, six 7
hundred dollars ($600) for each day in which the hospital fails to comply 8
with the requirements; 9
(b) In the case of a hospital with a be d count that is greater than thirty (30) and 10
equal to or fewer than five hundred fifty (550), twenty dollars ($20) per bed 11
for each day in which the hospital fails to comply with the requirements; or 12
(c) In the case of a hospital with a bed count that is g reater than five hundred 13
fifty (550), eleven thousand dollars ($11,000) for each day in which the 14
hospital fails to comply with the requirements. 15
(4) Each day a violation continues shall be considered a separate violation. 16
(5) In determining the amount of the penalty, the cabinet shall consider: 17
(a) Previous violations by the facility's operator; 18
(b) The seriousness of the violation; 19
(c) The demonstrated good faith of the facility's operator; and 20
(d) Any other matters the cabinet finds appropriate. 21
SECTION 8. A NEW SECTION OF KRS CHAPTER 216B IS CREATED TO 22
READ AS FOLLOWS: 23
(1) As used in this section: 24
(a) "Emergency medical condition" means: 25
1. A medical condition manifesting itself by acute symptoms of sufficient 26
severity, including severe pain, that a prudent layperson would 27
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reasonably have cause to believe constitutes a condition that the 1
absence of immediate medical attention could reasonably be expected 2
to result in: 3
a. Placing the health of the individual or, with respect to a 4
pregnant woman, the health of the woman or her unborn child, 5
in serious jeopardy; 6
b. Serious impairment to bodily functions; or 7
c. Serious dysfunction of any bodily organ or part; or 8
2. With respect to a pregnant woman who is having contractions: 9
a. A situation in which there is inadequate time to effect a safe 10
transfer to another hospital before delivery; or 11
b. A situation in which transfer may pose a threat to the hea lth or 12
safety of the woman or the unborn child; 13
(b) "Health care provider": 14
1. Means any person who: 15
a. Provides health care services to a patient; and 16
b. Is required to be licensed, certified, or otherwise authorized 17
under the laws of this state to provid e the health care services; 18
and 19
2. Includes a health facility as defined in KRS 216B.015; 20
(c) "Health care service": 21
1. Means any health care -related treatment, procedure, screening, test, 22
or other service provided by a health care provider; and 23
2. Includes the provision of prescription drugs, as defined in KRS 24
315.010, and home medical equipment, as defined in KRS 309.402; 25
(d) "Third-party payor" means an entity or government program that provides 26
coverage for health care services that are furnished to the entity's or 27
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program's insureds or beneficiaries; and 1
(e) "Written pricing sheet" means a written statement from a health care 2
provider to a patient, or if applicable, the patient's authorized 3
representative, that: 4
1. States: 5
a. The following for any healt h care service that the health care 6
provider will or may provide to the patient: 7
i. A description of each health care service; and 8
ii. The total amount that the health care provider will seek in 9
payment for each health care service; and 10
b. Of the total amo unt referenced in subdivision a.ii. of this 11
subparagraph: 12
i. The portion of the amount that the health care provider 13
will seek in payment from, or anticipates will be paid by, a 14
third-party payor; and 15
ii. The portion of the amount that the health care prov ider is 16
seeking, or anticipates seeking, from the patient; and 17
2. Includes the following, under the conspicuous caption 18
"ACKNOWLEDGMENT OF PATIENT" after the statements 19
referenced in subparagraph 1. of this paragraph: 20
"I, [enter name of patient and if app licable, indicate the name of any 21
authorized representative acting on the patient's behalf], hereby 22
acknowledge by my signature on the line below that I: 1. Have 23
received a copy of this written pricing sheet; and 2. To the extent 24
consistent with state and federal law, and any hold harmless 25
agreements or other payor -specific contractual rights to which I am a 26
beneficiary, accept the charges for each health care service set forth in 27
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this written pricing sheet. 1
(Signature line) 2
(Printed name of patient and if applicable, the printed name of any 3
authorized representative acting on the patient's behalf) 4
(Date)". 5
(2) Except as provided in subsection (6) of this section, a health care provider shall, 6
to the extent permitted under fe deral law, do the following prior to providing any 7
health care service to a patient: 8
(a) Provide the patient, or if applicable, the patient's authorized representative, 9
a written pricing sheet; and 10
(b) Obtain the patient's signature, or if applicable, the signature of the patient's 11
authorized representative acting on the patient's behalf, on the written 12
pricing sheet provided to the patient or the patient's authorized 13
representative. 14
(3) (a) For any health care service that was provided to a patient in viol ation of 15
subsection (2) of this section, a health care provider shall, to the extent 16
permitted under federal law: 17
1. Not bill or otherwise receive reimbursement directly from the patient 18
or the patient's authorized representative for the health care servic e; 19
and 20
2. Have the right to bill, or otherwise seek reimbursement from, the 21
patient's third-party payor for the health care service. 22
(b) This subsection shall not be construed to require a third -party payor to pay 23
or reimburse a health care provider more t han what the third -party payor 24
would otherwise be legally responsible to pay or reimburse. 25
(4) Nothing in this section waives: 26
(a) A third-party payor's legal responsibility to pay or reimburse a health care 27
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provider for a health care service that was prov ided to a patient, regardless 1
of whether that health care service was provided in violation of subsection 2
(2) this section; or 3
(b) A patient's rights: 4
1. Under any state or federal law that regulates the maximum amount 5
that a health care provider is entitl ed to bill or receive for a health 6
care service; or 7
2. As a beneficiary under a hold harmless agreement or other contract 8
with a third-party payor. 9
(5) (a) To the extent permitted under federal law, a third -party payor shall not, by 10
contract or otherwise, deny or reduce payment or reimbursement to a health 11
care provider for any health care service that is provided to a patient solely 12
because the health care service was provided to the patient in violation of 13
subsection (2) of this section. 14
(b) Any contract provision that violates this subsection shall be void and 15
unenforceable. 16
(6) This section shall not apply to a health care service that is provided to screen, 17
treat, or stabilize, or facilitate the screening, treatment, or stabilization of, an 18
emergency medical condition. 19
(7) The cabinet shall promulgate administrative regulations in accordance with KRS 20
Chapter 13A to establish a template for the written pricing sheet for use by health 21
care providers and any other requirements it deems necessary for impleme nting 22
this section. 23
Section 9. If the Cabinet for Health and Family Services or the Depar tment for 24
Medicaid Services determines that a state plan amendment, waiver, or any other form of 25
authorization or approval from any federal agency to implement Section 1, 2, 3, 4, 5, 6, 7, 26
or 8 of this Act is necessary to prevent the loss of federal funds or to comply with federal 27
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law, the cabinet or department: 1
(1) Shall, within 90 days after the effective date of this section, request the 2
necessary federal authorization or approval to implement Section 1, 2, 3, 4, 5, 6, 7, or 8 of 3
this Act; and 4
(2) May only delay implementation of the provisions of Section 1, 2, 3, 4, 5, 6, 7, 5
or 8 of this Act for which federal authorization or approval was deemed necessary until 6
the federal authorization or approval is granted. 7
Section 10. Sections 1 to 9 of this Act shall constitute the specific authorization 8
required under KRS 205.5372(1). 9