Compliance with transparency regs could be an opportunity

By Christi Skalka, managing director, Deloitte Consulting LLP

Federal regulators appear to be ramping up enforcement of the Hospital Price Transparency regulations.¹ The 2021 rule requires hospitals to disclose their standard charges for items and services through a comprehensive machine-readable file, and through a consumer-friendly display of 300 shoppable services (see Health care pricing transparency). Health care leaders should view compliance as an opportunity to share their value proposition with the market.

A federal report issued last fall called for increased enforcement of the Hospital Price Transparency rule.² In February, the White House issued an Executive Order (EO)³ that suggested regulators were not doing enough to enforce the regs. According to the EO, price transparency is essential to improve competition, innovation, affordability, and care quality. In addition, consumers who understand the actual cost of services are less likely to be surprised when medical bills arrive. However, creating more transparent prices can be challenging due to the often-disjointed nature of health care information and the sheer volume of data generated by the Hospital Price Transparency rule and the Transparency in Coverage rule (i.e., price transparency for health plans).⁴

Twin pillars of price transparency

Price transparency is designed to eliminate information asymmetry within the health care system by requiring the public posting of proprietary negotiated rates between health plans and providers. In addition, the development of accurate cost-estimator tools is intended to help consumers understand their likely out-of-pocket costs. Ideally, consumers—equipped with reliable price information about medical services—would be able to comparison shop hospitals based on the best value (i.e., a combination of low prices, accessibility, and high quality).⁵

Consumerism and competition can be seen as twin pillars of price transparency. However, the data needed to stand up those pillars is often inaccessible, unclear, or incomparable. That complexity can make it difficult to conduct the analytics needed to achieve true price transparency. The sheer volume of digital data is another challenge. The health care sector already generates massive amounts of digital data—about 300 terabytes of data per month per hospital.⁶ One terabyte of data is equivalent to 500 hours’ worth of digital movies.⁷ By some estimates, compliance with the price-transparency rules could generate an additional 30 terabytes of payer data per month.⁸ That amount of information is likely too much for most health care stakeholders to analyze.

Hospitals and health plans are also required to publish member/patient cost estimators as well as an advanced explanation of benefits (AEOB), a patient-transparency initiative originating from the No Surprises Act.⁹ Health plans must send an AEOB to their insured patients and to the hospital that explains the estimated cost of an item or procedure prior to a scheduled service. The goal of the AEOB requirement is to provide consumers with patient-specific, accurate, and complete pricing for in-network and out-of-network services. To date, the rule has not been enforced.¹⁰ A challenge is that cost-estimator tools are often incomplete, inconsistent, or inaccurate. This can create even more confusion for consumers when it comes to the price of services.

Four key elements of the Executive Order

Few hospitals and health systems have been able to successfully stand up the twin pillars of price transparency. The Government Accountability Office (GAO) report posited the reason is the current lack of enforcement,¹¹ which triggered the EO. Within 90 days of the EO, which would be late May 2025, additional requirements are expected in the following four areas:¹²

1. Enforcement: In the four years since the transparency rules initially took effect, 15 hospitals have been cited for non-compliance; six of those citations have taken place since January 2025, a rate far greater than in the past.¹³ Increased enforcement efforts could mean higher and more frequent civil monetary penalties. The current penalty is $300 per day, per bed for hospitals. The maximum fine is about $2 million annually. The fine for health plans is $100 per day, and more frequent audits and fines in response to consumer complaints. ¹⁴ 
2. Schema changes: A schema defines the structure of data, including the types of data, relationships between data elements, and other constraints. The machine-readable files are required to follow certain publicly available schemas.¹⁵ However, in its existing form, publicly available machine-readable file data generally cannot be used to accurately compare negotiated rates between health plans and providers. Additional requirements for data-model changes will likely be needed for the schemas to ensure data comparability.
3. Health plan file implementation: In addition to the in-network negotiated rate file, health plans are also required to post allowed amounts for out-of-network services as well as a prescription drug file that includes in-network negotiated rates and historical net prices for drugs.¹⁶ The result could be a significant increase in data volume that will need to be analyzed, and an increased focus on compliance with these two files.
4. Cost estimators: The language included in the EO refers to “actual…(not estimated)” prices. This phrase likely refers to the AEOB requirement as well as the member/patient cost estimators that health plans and hospitals are required to produce. Specifically, these tools will require member/patient-specific pricing based on their unique benefits and real-time accumulators. Compliance with this requirement could be challenging for some health systems and health plans.

 An opportunity to highlight value

Compliance with the transparency rules could be seen as an additional burden for health care leaders, but it should also be viewed as an opportunity to highlight value in the market. Health care organizations should strive to publish accurate data that satisfies the intent of the regulations. They should also analyze their data to see how they compare with others in their markets. While data can be messy, it can help illuminate the strategic next-best-step for health care organizations as it relates to communicating value to the market.

Hospitals, health systems, and health plans should try to be nimble, consider making investments in reliable cost estimators (including the AEOB), meet the requirements of existing and new regulations, and work to build trust with consumers through sincere efforts to improve price transparency.¹⁷ As the information asymmetry improves, organizations should consider a messaging campaign to help consumers and other health care stakeholders (e.g., employers) evaluate the value of their services, and ultimately fulfill the potential of price transparency.

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Endnotes:

^{1_{Hospital Price Transparency, CMS.gov}}

^{2_{Health care transparency, October 2, 2024}}

^{3_{Empowering patients with clear, accurate, and actionable healthcare pricing information, The White House, February 25, 2025}}

^{4_{Transparency in coverage, Federal Register, November 12, 2020}}

^{5_{Empowering patients with clear, accurate, and actionable healthcare pricing information, The White House, February 25, 2025}}

^{6_{The invisible wasteland of health care data, STAT+, December 2, 2024}}

^{7_{Just how much information can be stored on 1tb?, Infosecurity Magazine, September 27, 2021}}

^{8_{A petabyte of health insurance prices per month, Turquoise Health, July 11, 2023}}

^{9_{No Surprises Act protections: Status of implementation, CMS, August 2023}}

^{10_{No Surprises Act: Implementation under the Trump administration, The National Law Review, January 2, 2025}}

^{11_{Health care transparency, US Government Accountability Office, October 2, 2024}}

^{12_{Empowering patients with clear, accurate, and actionable healthcare pricing information, The White House, February 25, 2025}}

^{13_{Civil monetary penalty notices, CMS}}

^{14_{CMS ramping up enforcement of hospital price-transparency rule, Modern Healthcare, March 25, 2025}}

^{15_{Hospital price-transparency schema update, CMS, 2025}}

^{16_{Transparency in coverage final rule fact sheet, CMS, October 29, 2020}}

^{17_{Do you trust the American health care system?, Johns Hopkins, Carey Business School, September 12, 2024}}

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