Legislators Propose Hospital Price Transparency Requirements

Several legislators have authored a bill to create hospital price transparency requirements in Wisconsin. The authors, Sens. Felzkowski (R-Irma) and Bradley (R-Franklin) and Reps. Brooks (R-Saukville) and Rozar (R-Marshfield), are referring to the legislation as the “Know Your Healthcare Costs Act.”

The bill requires hospitals to create a publicly available, machine-readable digital file containing a list of standard charges for certain items and services, and a consumer-friendly list of standard charges for “shoppable services.” These lists of standard charges must be made publicly, readily available on the hospital’s website and to internet search engines, and periodically updated.

The requirements are very similar to federal price transparency rules enacted in 2021, but with additional state-level enforcement provisions and penalties. Notably, the bill directs the Department of Health Services to levy daily fines against a noncompliant hospital. Similar legislation has been enacted on a bipartisan basis in Texas and Colorado.

Some observers have criticized the federal rules for a lack of “teeth,” so to speak, with insignificant penalties and a lack of enforcement against hospitals that fail to comply. Sen. Felzkowski has said that any hospital complying with the federal rules would be in compliance with her legislation.

A “shoppable service” refers to a nonemergency service that a hospital can schedule in advance, as opposed to emergency and acute care services. According to one estimate, cited by the bill’s authors, about 80 percent of healthcare goods and services are shoppable.

Wisconsin Manufacturers and Commerce, the state’s chamber of commerce and largest business association, released a statement in support of the bill: “Informed health care consumers create a competitive market. Therefore, it is vitally important for employers and their employees to have access to transparent and easily understood medical cost data.” The statement also notes that Wisconsin has the fourth highest hospital costs in the nation.

This week, a coalition of free-market policy advocates published a letter to legislators encouraging them to support the bill. The coalition includes the Wisconsin Institute for Law & Liberty (WILL), Institute for Reforming Government, Cicero Institute, Opportunity Solutions Project, Americans for Prosperity, and Badger Institute.

In October of last year, WILL released a report calling for the enactment of price transparency requirements in Wisconsin. For example, WILL found that a typical CT scan can cost anywhere from $858 to $2,803 in Wisconsin. The report notes that the rise of high-deductible health plans has incentivized many healthcare consumers to compare providers and choose those offering lower prices.

The Wisconsin Hospital Association released a statement explaining its opposition to the bill:

WHA is committed to improving health care costs and advancing transparency within the entire health care system. Wisconsin hospitals are national leaders in complying with federal transparency law and that is why WHA believes this legislation is unwarranted. Further, the legislation creates a new set of state regulations and penalties that will complicate and confuse compliance with existing federal regulations and penalties being rigorously enforced by the Centers for Medicare and Medicaid Services. Bottom line, our hospitals are ahead of the curve and new, publicly available price and quality transparency tools are emerging every day making this legislation unneeded in a leader state like Wisconsin.