LUGPA Policy Brief: Strengthening Hospital Price Transparency

March 2025

Hospital price transparency is critical for promoting competition and reducing costs. In 2021, CMS required hospitals to publicly post prices, with 2024 updates enhancing accessibility and comparability. Currently, hospitals must provide more detailed information on drug costs and expected reimbursements. While the impact on consumer decision-making is uncertain, improved data may enable technology-driven pricing tools.

Key Policy Updates

New requirements mandate hospitals to disclose drug unit measurements, use more specific procedure modifiers, and post expected reimbursements from health plans. These changes aim to improve price clarity, but persistent concerns about incomplete and inconsistent data remain. To address this, CMS now requires standardized file formats and verification of data accuracy.

Compliance and Enforcement

Between 2021 and 2023, CMS initiated 1,287 enforcement actions, with violations ranging from missing data to the absence of machine-readable pricing files. Over $4 million in fines were levied against non-compliant hospitals. A Government Accountability Office (GAO) review found that while transparency rules have potential, challenges in data usability and accuracy persist. GAO has recommended stronger oversight, including risk-based or random audits.

Legislative Efforts and Regulatory Landscape

H.R. 267, the Health Care PRICE Transparency Act, aims to improve price transparency in healthcare by requiring hospitals and insurers to disclose detailed pricing information to consumers.

Key provisions include:

Hospitals: Must publicly disclose a list of charges for services, including gross charges, negotiated rates with third-party payers, minimum/maximum negotiated charges, and cash prices. Hospitals must also provide an internet-based price estimator for at least 300 "shoppable" services.
Insurers: Must disclose in-network and out-of-network rates, negotiated rates, and historical prices for prescription drugs. An online self-service tool must allow users to estimate costs for services and prescription drugs.
Enforcement includes penalties for non-compliance.

Federal regulations already in place include:

CMS-1717-F2 (2021): Requires hospitals to publish gross charges, negotiated rates, minimum and maximum rates, and discounted cash prices, along with a list of 300 shoppable services.
Transparency in Coverage Rule (2022): Mandates insurers to publish in-network negotiated rates, out-of-network allowed amounts, and a consumer price comparison tool.

Despite these measures, compliance remains low. A 2024 PatientRightsAdvocate.org report found only 34.5% of hospitals fully compliant, with many providing incomplete or illegible data.

LUGPA’s Advocacy and Recommendations

On March 28, 2024, LUGPA submitted testimony before the House Energy & Commerce Health Subcommittee, advocating for stricter enforcement of transparency rules, equalized payments for independent practices, and a minimum charity care requirement of 3.8% for nonprofit hospitals. LUGPA also supports repealing the inpatient-only list and reforming the Stark Law to allow physician hospital ownership.

Public sentiment strongly favors transparency. A 2020 YouGov survey found that 91% of Americans support hospital price disclosure, and 66% believe it leads to better healthcare.

LUGPA remains committed to advocating for policies that ensure clear, accurate, and accessible pricing information for both patients and providers.

Healthcare price transparency has become a key policy issue for millions of Americans seeking to manage their healthcare expenses and is one of LUGPA’s top legislative priorities. Patients want to understand what the care will cost them, and many are willing to shop around to find the best value. LUGPA strongly supports healthcare price transparency, beginning with hospital price transparency and ultimately expanding to all providers.