Trump administration ramps up enforcement for price transparency

In 2021, CMS began enforcing a federal price transparency rule that requires hospitals to virtually post "a machine-readable file … that includes all standard charges (including gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges) for all hospital items and services."

Since then, the agency has added several additional requirements to the price transparency regulations, including linking price transparency data at the bottom of their homepages, providing standardized pricing files, and reporting several other metrics.

To encourage compliance, CMS increased the maximum yearly fine for not meeting the price transparency requirements from $110,000 to over $2 million a year in 2022. The agency also reduced the amount of time hospitals had to correct their pricing data issues and accelerated the overall enforcement process.

In 2023, a report from HHS' Office of Inspector General (OIG) estimated that 46% of hospitals required to comply with price transparency rules were noncompliant. According to OIG, the "notable level of noncompliance" was due to inadequate oversight from CMS regulators, since the agency had limited staff to dedicate to reviewing hospitals for compliance.

Since then, CMS has worked to strengthen its oversight for price transparency, including sending warnings to more hospitals about noncompliance. Since April, CMS has sent warning letters and corrective action plans to over 500 acute-care hospitals, behavioral health hospitals, surgical hospitals, and inpatient rehabilitation facilities.

"It is definitely a shot across the bow," said Morgan Henderson, senior director of analytics and research at The Hilltop Institute at the University of Maryland, Baltimore County. "There is no aggregate sign that the transparency regulation has depressed overall healthcare spending, and hospital prices continue to rise. This could lay the groundwork for future enforcement actions."

Although CMS has sent hundreds of warning letters and corrective action plans to hospitals, relatively few have actually been penalized for not complying with price transparency rules. According to CMS data, only 28 hospitals have been penalized for violating price transparency regulations, with fines ranging from $32,301 to $883,180.

Recently, the U.S. House Committee on Energy and Commerce's Subcommittee on Health organized a hearing aimed at examining policies related to healthcare price transparency. During the hearing, the subcommittee discussed several bills related to price transparency, including The Lower Costs, More Transparency Act; The Patients Deserve Price Tags Act; and The CHECK Act.

Christopher Whaley, a public health researcher from Brown University, spoke at the hearing, underscoring the importance of price transparency in healthcare. "To improve the affordability of the U.S. healthcare system, I think it is critical for Congress and policymakers to improve both price and organizational transparency," he said.

Although Whaley acknowledged that current price transparency regulations have not significantly impacted patients' behavior or costs, he noted that increasing transparency is necessary to improve healthcare affordability.

"Transparency is foundational for everyone else who needs to act," Whaley said. "Whether it's employers negotiating on behalf of their workers, researchers studying healthcare market dynamics such as myself, states designing price reforms [or] federal regulators overseeing the Medicare program."

The American Hospital Association (AHA) also provided a statement for the hearing, saying that "[t]he hospital field takes transparency compliance seriously, and we want to continue the work of providing patients with essential information on their care."

However, AHA also urged Congress to evaluate the effectiveness of current price transparency regulations before enacting new ones. "Before Congress considers additional legislative solutions, it will be important to understand how existing policies are performing, as well as the tremendous financial costs of compliance, to ensure that any future policymaking retains what is working and improves upon what is not delivering true transparency," the organization wrote.