Arizona Governor Jan Brewer has signed a law requiring providers to publicly display the prices of their most common services and changing the state's Medicaid reimbursement methodology.
The law mandates that providers make available upon request or post online the prices of their most commonly performed procedures, with a few exceptions for providers like Indian health centers and small practices. Hospitals will have to disclose the prices of their 50 most common services and physician practices their 25 most common services.
The law specifies that providers list the "direct pay price," whatever would be charged if a patient (regardless of insurance status) or a patient's employer were paying the provider directly in full. The law does not specify any penalties for noncompliance, leaving that up to professional licensing boards, although it does prohibit license revocation as a disciplinary action.
The Arizona Hospital and Healthcare Association originally opposed the price transparency measures, and Brewer vetoed a previous version of it out of concerns for lawsuit exposure and possible federal preemption. An amended version then combined with a reimbursement bill eventually was passed with bipartisan support, and Brewer signed it with enthusiasm.
"Today, Arizonans have little or no information about the actual cost of different medical procedures," said Brewer, a Republican who also recently signed a law expanding Medicaid eligibility. "This common sense legislation will make the price of health care services available to patients."
The law also changes the hospital reimbursement methodology for the Arizona Health Care Cost Containment System (AHCCCS), the state's Medicaid agency, basing payments based on diagnosis and treatment rather than the number of days spent in a hospital.
The law tasks the AHCCCS with drafting regulations for a "diagnosis-related group-based hospital reimbursement methodology," as a variety of other states have done for two decades.
Moving to a diagnosis-based reimbursement system, Brewer said in a media release, "changes the focus from keeping people in the hospital to treating patients in the most efficient and effective manner possible."