"An Act requiring certain hospitals to make certain disclosures on patient billings."

Hospital costs to patients have undoubtedly climbed in recent years. These rising costs can be attributed to the interaction of many factors including: increasing costs for new drugs, technologies, and procedures; deregulation of hospital charges and removing previous limits; cutbacks in reimbursements from government programs, health maintenance organizations, and insurance policies; mandates upon hospital emergency rooms to treat all patients who enter; and the fact that indigent, uninsured patients frequently default on their bills.

Private insurers and government agencies can leverage large groups of patients, which enables these payers to negotiate discounts with the hospitals for the services that they fund. Generally, the larger the group, the larger the discount. Because hospitals strive to cover their expenses, charges are increased for identical services for those people too poor to afford insurance or those who pay their own bills. The patients who suffer the most are not always the poorest. The very poor can receive Medicaid, and many middle-class families have health insurance coverage that pays the bulk of their bills. It is working class families, with some assets, but no insurance coverage, who pay the most for services in our current system.

Under federal laws for Medicaid and Medicare, hospitals are required to charge the same amounts for identical services, regardless of who is paying the bill. However, hospitals may agree to accept lower payments against those charges. In other words, even though hospitals [are required to] charge everyone the same amount, everyone does not pay the same amount.

SB 222 focuses on the issues of pricing transparency and equity. This bill requires certain hospitals to disclose, on the bills that they submit to patients, information including:

• The discount rates that the hospital charges for identical services for patients in the other payer groups;
• The cost subsidy for indigent individuals that makes up a portion of the patient's bill-the cost to charge ratio;

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