SF5024

Purpose

This bill aims to increase price transparency and consumer protection in health care by: - limiting how hospital infections are billed and who pays for them, - banning open-ended promises to pay for care, - creating a standardized “provider number” system to show what patients may owe, - promoting private, independent consumer data exchanges for pricing and quality information, and - requiring certain health plans to offer reference-based pricing with clear rules for participation and payment.

Main Provisions

• Hospital-associated infection (HAI) costs

  • Defines HAI as infections acquired during care in a health care facility (e.g., surgical site infections, certain catheter infections, ventilator-related pneumonia, C. difficile, etc.).
  • Prohibits charging patients or payers for the treatment costs of an HAI, including all related charges (hospital stays, professional services, medications, labs, imaging, rehab, and subcontractor charges).
  • Requires the health care facility where the HAI occurred to bear full financial responsibility for the treatment costs, even if treatment occurs at a different facility.

• Prohibition on open-ended promissory-to-pay contracts

  • Bans agreements that obligate a patient to pay for services without a disclosed amount in advance.
  • Health care providers may not ask patients to sign such contracts.
  • All open-ended promissory-to-pay contracts become void and unenforceable after July 1, 2026 for services after that date.
  • Providers may require signed acknowledgments of financial responsibility only if they:
  • specify the provider’s “provider number” (see below),
  • identify services that may not be covered by insurance,
  • disclose estimated patient responsibility based on the provider’s number and the patient’s insurance.

• Provider numbers and pricing framework

  • Establishes a system of provider numbers to disclose pricing information.
  • Definitions include terms like baseline (MA baseline for services), chargemaster, CPT/ CDT codes, standard charge, etc.
  • By January 1, 2028 and each year thereafter, the Department must publicly publish a provider’s number. For providers delivering both facility-based and professional services, two numbers must be published (facility number and professional services number).
  • Providers must post their numbers prominently, including on their websites.
  • The numbers are calculated by a weighted method using each provider’s current standard charges and a published baseline, reflecting the share of total charges each charge accounts for.

• Consumer health information exchanges (CHIEs)

  • Private, independently operated online platforms may aggregate data and display provider numbers, price data, quality metrics, and patient reviews for consumers.
  • Ownership may not be by health care providers, health plans, pharmaceutical companies, or medical device manufacturers.
  • The Department must register CHIEs that meet standards for technical capability, independence, unbiased data display, consumer privacy protections, and public search access.

• Rulemaking

  • The Department of Health must adopt rules to implement the provider-number system (including pricing transparency) and the CHIEs framework.
  • Rules should promote:
  • a simple, universally understood pricing number,
  • public disclosure of provider numbers to reveal “hidden taxes” for private-pay patients,
  • a consumer-friendly marketplace for price comparison and choice,
  • competition among providers and health plans,
  • elimination of surprise billing and price gouging.
  • Rules for CHIEs must promote standardized data submission, independent operation, consumer privacy, and accessible pricing/quality data.

• Reference-based pricing health plans

  • Health carriers offering individual, small group, or large group plans must offer a reference-based pricing health plan, subject to federal approval.
  • Enrollees may use any provider who agrees to be paid up to the plan’s reference-based price, with terms applying equally to all participating providers.
  • Carriers may require participating providers to meet data use and quality assurance standards.
  • Providers who participate must render services to all enrollees if their reimbursement rate is at or below the plan’s reference price.
  • Reimbursement rates must be based on a percentage of the most recent Medical Assistance fee-for-service (MA FFS) rates; for services without MA FFS values, rates are to be negotiated using other established schedules.
  • If a reference-based plan’s rate is at least 190% above MA FFS and the plan is offered in all Minnesota counties, the plan is exempt from certain geographic and network adequacy requirements.
  • Providers who participate may accept the plan’s rate as payment in full; carriers may impose cost-sharing as allowed under the plan.
  • Nothing requires a provider to participate; carriers cannot force participation as a condition of other plans.
  • Plans may still exclude coverage for services not covered under the enrollee’s plan, and must cover all chiropractic services for enrollees 21 and younger.

• Additional note

  • The bill includes a framework for coding, pricing, and reporting across medical and dental services (including use of CPT, CDT, and related codes) to support these pricing and transparency measures.

Changes to Existing Law (Significant Shifts)

• Introduces a formal, publication-based provider-number system to publicly disclose expected patient responsibility.
• Establishes a new framework for price transparency and consumer choice via CHIEs and a standardized pricing number.
• Creates a mandate and framework for reference-based pricing health plans, including how rates are set and how providers participate.
• Expands protections against surprise billing by banning open-ended payment promises and requiring advance disclosure of payments.
• Expands the state’s oversight role in pricing data by directing rulemaking and data standards through the Department of Health.

Implementation and Timeline Highlights

• Open-ended promissory-to-pay contracts are barred effective for contracts signed after July 1, 2026 (for services after that date).
• Provider numbers must be published annually beginning January 1, 2028, with separate numbers for facility charges and professional services where applicable.
• Consumer health information exchanges must be privately owned and independently operated, with a formal registration process and data-privacy/public-access requirements established through rulemaking.
• Rulemaking by the Department of Health is required to implement both the provider-number framework and CHIE framework, with goals centered on price transparency, consumer convenience, and defense against price gouging.

Potential Impacts (for context)

• Greater price transparency and easier comparison of prices and quality for patients.
• Reduced billing surprises and clearer information about what patients owe.
• Shifts in who bears the cost for hospital-associated infections.
• More standardized pricing data across providers via the provider-number system.
• New marketplace features for health plans, including reference-based pricing options.

Relevant Terms - hospital-associated infection (HAI) - surgical site infection (SSI) - catheter-associated urinary tract infection (CAUTI) - central line-associated bloodstream infection (CLABSI) - ventilator-associated pneumonia (VAP) - Clostridioides difficile (C. diff) - health care facility - health care payer/helper - open-ended promissory-to-pay contract - provider number - chargemaster - CPT code - CDT code - baseline (MA baseline) - standard charge - Medical Assistance (MA) fee-for-service (FFS) - reference-based pricing health plan - health carrier - enrollee - consumer health information exchange (CHIE) - price transparency - price gouging - surprise billing - geographic and network adequacy (as related to MA FFS benchmarks) - independent data ownership (in CHIE context)