AN ACT relating to hospital price transparency.

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AN ACT relating to hospital 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 payor" means an entity that is, by statute, contract, or agreement, 24
legally responsible for payment of a claim for a facility item or service. 25
SECTION 2. A NEW SECTION OF KRS CHAPTER 216B IS CREATED TO 26
READ AS FOLLOWS: 27
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Notwithstanding any other law to the contrary, a facility shall make public a: 1
(1) Digital file in a machine -readable format that contains a list of all standard 2
charges, expressed in dollar amounts, for all facility items or services as described 3
in Section 3 of this Act; and 4
(2) Consumer-friendly list of standard charges, expressed in dollar amounts, for a 5
limited set of shoppable services as provided in Section 4 of this Act. 6
SECTION 3. A NEW SECTION OF KRS CHAPTER 216B IS CREATED TO 7
READ AS FOLLOWS: 8
(1) A facility shall maintain a chargemaster of all standard charges, expressed in 9
dollar amounts, for all facility items or services in accordance with this section. 10
(2) The standard cha rges contained in the chargemaster shall reflect the standard 11
charges, expressed in dollar amounts, applicable to that location of the facility, 12
regardless of whether the facility operates in more than one (1) location or 13
operates under the same license as another facility. 14
(3) The chargemaster shall include the following items, as applicable: 15
(a) A description of each facility item or service provided by the facility; 16
(b) The following standard charges, expressed in dollar amounts, for each 17
individual faci lity item or service when provided in either an inpatient 18
setting or an outpatient department setting, as applicable: 19
1. The gross charge; 20
2. The de-identified minimum negotiated charge; 21
3. The de-identified maximum negotiated charge; 22
4. The discounted cash price; and 23
5. The payor-specific negotiated charge, listed by the name of the third -24
party payor and plan associated with the charge and displayed in a 25
manner that clearly associates the charge with each third -party payor 26
and plan; and 27
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(c) Any code used b y the facility for purposes of accounting or billing for the 1
facility item or service, including the Current Procedural Terminology 2
(CPT) code, Healthcare Common Procedure Coding System (HCPCS) code, 3
Diagnosis Related Group (DRG) code, National Drug Code ( NDC), or other 4
common identifier. 5
(4) The information contained in the chargemaster shall be published in a single 6
digital file that is in a machine-readable format. 7
(5) The chargemaster required under subsection (1) of this section shall be displayed 8
in a prominent location on the home page of the facility’s publicly accessible 9
website or accessible by selecting a dedicated link that is prominently displayed on 10
the home page of the facility’s publicly accessible website. If the facility operates 11
multiple l ocations and maintains a single website, the chargemaster required 12
under subsection (1) of this section shall be posted for each location the facility 13
operates in a manner that clearly associates the chargemaster with the applicable 14
location of the facility. 15
(6) The chargemaster required under subsection (1) of this section shall: 16
(a) Be available: 17
1. Free of charge; 18
2. Without having to register or establish a user account or password; 19
3. Without having to submit personal identifying information; and 20
4. Without having to overcome any other impediment, including entering 21
a code to access the list; 22
(b) Be accessible to a common commercial operator of an internet search 23
engine to the extent necessary for the search engine to index the list and 24
display the list as a result in response to a search query of a user of the 25
search engine; 26
(c) Be formatted in a manner prescribed by the cabinet; 27
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(d) Be digitally searchable; and 1
(e) Use the naming convention specified by the Centers for Medicare and 2
Medicaid Services on its website. 3
(7) The facility shall update the chargemaster at least one (1) time each year. The 4
facility shall clearly indicate the date on which the list was most recently updated, 5
either on the chargemaster or in a manner that is clearly associated wit h the 6
chargemaster. 7
(8) The cabinet shall promulgate administrative regulations in accordance with KRS 8
Chapter 13A to establish a template for each facility to use to create the 9
chargemaster. The cabinet shall: 10
(a) Consider any applicable federal guidelines for formatting similar 11
chargemasters required by federal law or rule and ensure that the design of 12
the template enables health care researchers to compare the charges 13
contained in the chargemasters maintained by each facility; and 14
(b) Design the template to be substantially similar to the wide -format .CSV 15
template used by the Centers for Medicare and Medicaid Services for 16
purposes similar to those of this section. 17
SECTION 4. A NE W SECTION OF KRS CHAPTER 216B IS CREATED TO 18
READ AS FOLLOWS: 19
(1) (a) A facility shall maintain and make publicly available a chargemaster of the 20
standard charges described by subsection (3)(b) of Section 3 of this Act for 21
each of at least three hundred (30 0) shoppable services provided by the 22
facility. The facility may select the shoppable services to be included in the 23
chargemaster, except that the chargemaster shall include: 24
1. The services specified as shoppable services by the Centers for 25
Medicare and Medicaid Services; or 26
2. If the facility does not provide all of the shoppable services described 27
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by subparagraph 1. of this paragraph, as many of those shoppable 1
services as the facility does provide. 2
(b) If a facility does not provide three hundred (300) shoppable services, the 3
facility shall maintain a chargemaster of the total number of shoppable 4
services that the facility provides in a manner that otherwise complies with 5
the requirements of paragraph (a) of this subsection. 6
(2) In selecting a shoppable service for purposes of inclusion in the chargemaster 7
required under subsection (1) of this section, a facility shall: 8
(a) Consider how frequently the facility provides the service and the facility’s 9
billing rate for that service; and 10
(b) Prioritize the se lection of services that are among the services most 11
frequently provided by the facility. 12
(3) The chargemaster required under subsection (1) of this section: 13
(a) Shall include: 14
1. A plain-language description of each shoppable service included; 15
2. The payo r-specific negotiated charge, expressed in a dollar amount, 16
that applies to each shoppable service included and any ancillary 17
service, listed by the name of the third-party payor and plan associated 18
with the charge and displayed in a manner that clearly as sociates the 19
charge with the third-party payor and plan; 20
3. The discounted cash price, expressed in a dollar amount, that applies 21
to each shoppable service included and any ancillary service or, if the 22
facility does not offer a discounted cash price for on e (1) or more of 23
the shoppable or ancillary services, the gross charge for the shoppable 24
service or ancillary service, as applicable; 25
4. The de -identified minimum negotiated charge, expressed in a dollar 26
amount, that applies to each shoppable service inclu ded and any 27
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ancillary service; 1
5. The de -identified maximum negotiated charge, expressed in a dollar 2
amount, that applies to each shoppable service included and any 3
ancillary service; and 4
6. Any code used by the facility for purposes of accounting or billi ng for 5
each shoppable service included and any ancillary service, including 6
the CPT, HCPCS, DRG, or NDC code, or other common identifier; 7
(b) If applicable, shall: 8
1. State each location at which the facility provides the shoppable service 9
and whether the standard charges included apply at that location to 10
the provision of that shoppable service in an inpatient setting, an 11
outpatient department setting, or both of those settings, as applicable; 12
and 13
2. Indicate if one (1) or more of the shoppable services s pecified by the 14
Centers for Medicare and Medicaid Services is not provided by the 15
facility; and 16
(c) As applicable, shall be: 17
1. Displayed in the manner prescribed in subsection (5) of Section 3 of 18
this Act, for the chargemaster required under that section; 19
2. Available: 20
a. Free of charge; 21
b. Without having to register or establish a user account or 22
password; 23
c. Without having to submit personal identifying information; and 24
d. Without having to overcome any other impediment, including 25
entering a code to access the chargemaster; 26
3. Searchable by service description, billing code, and payor; 27
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4. Updated in the manner prescribed in Section 3 of this Act for the 1
chargemaster required under that section; 2
5. Accessible to a common commercial operator of an internet search 3
engine to the extent necessary for the search engine to index the list 4
and display the chargemaster as a result in response to a search query 5
of a user of the search engine; and 6
6. Formatted in a manner that is consistent with the format prescribed by 7
the cabinet in Section 3 of this Act. 8
SECTION 5. A NEW SECTION OF KRS CHAPTER 216B IS CREATED TO 9
READ AS FOLLOWS: 10
(1) The cabinet shall monitor each facility's compliance with the requirements of 11
Sections 2, 3, and 4 of this Act using any of the following methods: 12
(a) Evaluating complaints made by persons to the cabinet regarding 13
noncompliance; 14
(b) Reviewing any analysis prepared regarding noncompliance; and 15
(c) Auditing the websites of facilities for compliance with this section. 16
(2) If the cabinet determines that a facility is not in compliance with a provision of 17
Section 2, 3, or 4 of this Act the cabinet shall take the following actions: 18
(a) Provide a written notice to the facility that clearly explains the manner in 19
which the facility is not in compliance; 20
(b) Request a corrective action plan from the facility if the facility has 21
materially violated a provision of Section 2, 3, or 4 of this Act; and 22
(c) Impose an administrative penalty, as determined under Section 7 of this Act, 23
on the facility and publicize the penalty on the cabinet's internet website if 24
the facility fails to: 25
1. Respond to the cabinet's request to submit a correction action plan; or 26
2. Comply with the requirements of a corrective action plan submitted to 27
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the cabinet. 1
(3) Beginning no later than ninety (90) days after the effective date of this Act, the 2
cabinet shall create and maintain a publicly available list on its website of 3
hospitals that have been found to have violated Section 2, 3, or 4 of this Act, or 4
that have been issued an administrative penalty or sent a warning notice, a 5
request for a corrective action plan, or any other written communication from the 6
cabinet related to the requirements of Section 2, 3, or 4 of this Act. Such 7
penalties, notices, and communications shall be subject to public disclosure 8
under 5 U.S.C. sec. 552, notwithstanding any exemptions or exclusions to the 9
contrary, in full without red action. This list shall be updated at least every thirty 10
(30) days thereafter. 11
(4) Notwithstanding any provision of law to the contrary, in considering an 12
application for renewal of a hospital’s license or certification, the cabinet shall 13
consider whether the hospital is or has been in compliance with Section 2, 3, or 4 14
of this Act. 15
SECTION 6. A NEW SECTION OF KRS CHAPTER 216B IS CREATED TO 16
READ AS FOLLOWS: 17
(1) A facility materially violates Section 2, 3, or 4 of this Act if the facility fails to: 18
(a) Comply with the requirements; or 19
(b) Publicize the facility's standard charges in the form and manner required. 20
(2) If the cabinet determines that a facility has materially violated Section 2, 3, or 4 21
of this Act, the cabinet shall issue a notice of material violation to the facility and 22
request that the facility submit a corrective action plan. The notice shall indicate 23
the form and manner in which the corrective action plan shall be submitted to the 24
cabinet, and clearly state the date by which the facility shall submit the plan. 25
(3) A facility that receives a notice under subsection (2) of this section shall: 26
(a) Submit a corrective action plan in the form and manner and by the specified 27
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date prescribed by the notice of violation; and 1
(b) As soon as practicable after submission of a corrective action plan to the 2
cabinet, comply with the plan. 3
(4) A corrective action plan submitted to the cabinet shall: 4
(a) Describe in detail the corrective action the facility will take to address any 5
violation identified by the cabinet in the notice provided under subsection 6
(2) of this section; and 7
(b) Provide a date by which the facility will complete the corrective action. 8
(5) A corrective action plan shall be subject to review and approval by the cabinet. 9
After the cabinet reviews and approves a facility’s corrective action plan, the 10
cabinet shall monitor and evaluate the facility’s compliance with the plan. 11
(6) A facility is considered to have failed to respond to the cabinet's request to submit 12
a corrective action plan if the facility fails to submit a corrective action plan: 13
(a) In the form and manner specified in the notice provided; or 14
(b) By the date specified in the notice provided; 15
under subsection (2) of this section. 16
(7) A facility is considered to have failed to comply with a corrective action plan if 17
the facility fails to address a violation within the specified period of time 18
contained in the plan. 19
SECTION 7. A NEW SECTION OF KRS CHAPTER 216B IS CREATED TO 20
READ AS FOLLOWS: 21
(1) The cabinet shall impose an administrative penalty on a facility in accordance 22
with this chapter if the facility fails to: 23
(a) Respond to the cabinet's request to submit a corrective action plan; or 24
(b) Comply with the requirements of a corrective action plan submitted to the 25
cabinet. 26
(2) The cabinet shall impose an administrative penalty on a facility for a vio lation of 27
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each requirement of this chapter. The cabinet shall set the penalty in an amount 1
sufficient to ensure compliance by a facility with the provisions of Sections 2, 3, 2
and 4 of this Act subject to the limitations in subsection (3) of this section. 3
(3) The penalty imposed by the cabinet shall not be lower than: 4
(a) In the case of a hospital with a bed count of thirty (30) or fewer, six 5
hundred dollars ($600) for each day in which the hospital fails to comply 6
with the requirements; 7
(b) In the case of a hospital with a bed count that is greater than thirty (30) and 8
equal to or fewer than five hundred fifty (550), twenty dollars ($20) per bed 9
for each day in which the hospital fails to comply with the requirements; or 10
(c) In the case of a hospital with a bed count that is greater than five hundred 11
fifty (550), eleven thousand dollars ($11,000) for each day in which the 12
hospital fails to comply with the requirements. 13
(4) Each day a violation continues shall be considered a separate violation. 14
(5) In determining the amount of the penalty, the cabinet shall consider: 15
(a) Previous violations by the facility's operator; 16
(b) The seriousness of the violation; 17
(c) The demonstrated good faith of the facility's operator; and 18
(d) Any other matters the cabinet finds appropriate. 19
SECTION 8. A NEW SECTION OF KRS CHAPTER 216B IS CREATED TO 20
READ AS FOLLOWS: 21
(1) As used in this section, unless the context requires otherwise: 22
(a) "Collection action" means any of the following actions taken with respect 23
to a debt for items and services that were purchased from or provided to a 24
patient by a hospital on a date during which the hospital was not in material 25
compliance with hospital price transparency laws: 26
1. Attempting to collect a debt from a patient or patient guarantor by 27
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referring the debt, directly or indirectly, to a debt collector, a collection 1
agency, or other third party retained by or on behalf of the hospital; 2
2. Suing the pa tient or patient guarantor, or enforcing an arbitration or 3
mediation clause in any hospital documents including contracts, 4
agreements, statements, or bills; or 5
3. Directly or indirectly causing a report to be made to a consumer 6
reporting agency; 7
(b) "Collection agency" means any: 8
1. Person who engages in a business the principal purpose of which is 9
the collection of debts; or 10
2. Person who: 11
a. Regularly collects or attempts to collect, directly or indirectly, 12
debts owed or due or asserted to be owed or due to another; 13
b. Takes assignment of debts for collection purposes; or 14
c. Directly or indirectly solicits for collection debts owed or due or 15
asserted to be owed or due to another; 16
(c) 1. "Consumer reporting agency" means any person that, for monetary 17
fees, dues, or on a cooperative nonprofit basis, regularly engages, in 18
whole or in part, in the practice of assembling or evaluating consumer 19
credit information or other information on consumers for the purpose 20
of furnishing consumer reports to third parties; 21
2. "Consumer reporting agency" includes any person defined in 15 22
U.S.C. sec. 1681a(f); and 23
3. "Consumer reporting agency" does not include any business entity 24
that provides check verification or check guarantee services only; 25
(d) "Debt" means any obligation or alleged obligation of a consumer to pay 26
money arising out of a transaction, whether or not the obligation has been 27
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reduced to judgment, and does not include a debt for business, investment, 1
commercial, or agricultural purposes or a debt incurred by a business; 2
(e) "Debt collector" means any person employed or engaged by a collection 3
agency to perform the collection of debts owed or due or asserted to be owed 4
or due to another; 5
(f) "Hospital" means a hospital as defined in 45 C.F.R. sec. 180.20 that is 6
licensed by the cabinet; 7
(g) "Hospital price transparency laws" means Section 2718(e) of the Public 8
Health Service Act, Pub. L. No. 78 -410, as amended, and rules adopted by 9
the United States Department of Health and Human Services implementing 10
Section 2718(e); and 11
(h) "Items and services" or "items or services" means "items and services" as 12
defined in 45 C.F.R. sec. 180.20. 13
(2) On and after the effective date of this Act, a hospital that is not in material 14
compliance with federal hospital price transparency laws on the date that items or 15
services are purchased from or provided to a patient by the hospital shall not 16
initiate or pursue a collection action against the patient or patient guarantor for a 17
debt owed for the items or services. 18
(3) If a patient believe s that a hospital was not in material compliance with federal 19
hospital price transparency laws on a date on or after the effective date of this 20
Act, for items or services that were purchased by or provided to the patient, and 21
for which the hospital takes a collection action against the patient or patient 22
guarantor, the patient or patient guarantor may file suit to determine if the 23
hospital was materially out of compliance with the hospital price transparency 24
laws on the date of service. The hospital shall n ot take a collection action against 25
the patient or patient guarantor while the lawsuit is pending. 26
(4) A hospital that has been found to be materially out of compliance with federal 27
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hospital price transparency laws shall: 1
(a) Refund the payer any amount of the debt the payer has paid and shall pay a 2
penalty to the patient or patient guarantor in an amount equal to the total 3
amount of the debt; 4
(b) Dismiss or cause to be dismissed any court action with prejudice and pay 5
any attorney fees and costs incurred b y the patient or patient guarantor 6
relating to the action; and 7
(c) Remove or cause to be removed from the patient’s or patient guarantor’s 8
credit report any report made to a consumer reporting agency relating to the 9
debt. 10
(5) Nothing in this section: 11
(a) Prohibits a hospital from billing a patient, patient guarantor, or third -party 12
payor, including a health insurer, for items or services provided to the 13
patient; or 14
(b) Requires a hospital to refund any payment made to the hospital for items or 15
services provided to the patient, so long as no collection action is taken in 16
violation of this section. 17