Hospital price transparency bill in Washington Legislature gets reworked

A bill in the Washington Legislature to make hospital pricing more transparent for consumers is still in play, but its scope has narrowed during the legislative process.

“I don’t think this bill really, frankly, does anything anymore,” said Steve Fenberg, a patient rights advocate who supported the original bill. “I think it’s a shame.”

Senate Bill 5493 intended to give the state’s Department of Health the ability to enforce a 2021 federal rule that required hospitals to provide transparent pricing. The idea was to provide patients with clearer information about how much they would pay for care and to spur competition that could help drive down costs.

“We’re on an unsustainable trajectory for health care costs, we are not bending the curve,” said Sen. Marcus Riccelli, D-Spokane, the bill’s sponsor. “We need to relieve burdens on patients and consumers from our broken system and do actual things that will drive costs down.”

Advocates have raised concerns over the lack of compliance with the federal rule, while hospitals say it takes time to adjust to new requirements.

“The understanding of what compliance and transparency mean has sort of evolved over time,” since the 2021 federal rule, said Andrew Busz, a policy director with the Washington State Hospital Association.

When the rule first took effect, hospitals were required to upload “machine readable files,” which are large, not considered accessible or understandable to most consumers, and mainly used by researchers, insurers, and data aggregators, Busz said.

Over time, the rule required hospitals to upload “shoppable services” – a consumer-friendly list of around 300 medical services, such as imaging, surgeries and maternity care.

At the federal level, hospitals that do not comply with these requirements are first issued a warning notice. If the noncompliance continues, it can lead to a corrective action plan or civil monetary penalties.

In the state, 20 hospitals out of the 114 have been issued warning notices and no further action has been needed, according to a list provided by the hospital association.

“It’s fairly common for state or federal agencies, when something rolls out that’s new, to give organizations kind of time to be compliant, these are new requirements,” said Chelene Whiteaker, senior vice president for government affairs with the Washington State Hospital Association.

States like Colorado have been taking action in recent years to enforce the federal requirements and the Washington bill is in that mold.

Riccelli suggested Washington has been lagging behind other states in moving ahead with the new transparency measures. “We see red states, blue states and purple states moving forward with price transparency a little more aggressively,” he said.

When the bill was first introduced this year, it had three main components: requiring hospitals to comply with the federal regulations and to submit data to the state’s Department of Health; giving the state enforcement authority, and calling for the state to develop an interactive price comparison tool – similar to one in Colorado.

Hospitals that don’t comply would have been subject to civil fines ranging up to $10,000 per violation. Proceeds from fines would have gone toward creating the tool for people to search and compare hospital prices.

The version of the bill the Senate passed unanimously on March 11 did not include the enforcement provisions.

“I made some changes that I would rather not have made, but we did just to kind of keep something moving on in this session. I contemplated not moving it forward, but I do see value,” Riccelli said, adding that Republicans and Democrats have struggled with getting behind transparency measures.

Whiteaker said that the hospital association pushed for the changes so that the state bill complemented the federal regulations, rather than duplicating or distracting from them.

The most recent version of the bill would require the state’s hospitals to comply with the federal rules and submit price data to the state’s Department of Health, which would track compliance. It sets a July 1, 2027, deadline for hospitals to publish the data and calls for annual updates after that.

The complexity of health insurance and factoring in copays, deductibles, and whether a hospital accepts someone’s insurance is often what makes health care difficult to navigate.

“The payment mechanisms and rate structures are actually determined by the carriers, not by the hospitals,” Busz said, adding that the type of insurance someone has typically has more of an effect on what a patient pays than the rates a hospital charges.

Also, while price estimate tools exist on hospital websites, it can be difficult for someone to predict what services they may need.

“There’s no real perfect way to anticipate what the costs are going to be,” Busz said.