CFO In the Know: Price Transparency Update

Hospital price transparency compliance enforcement is set to rise.

The Centers for Medicare and Medicaid Services (CMS) enacted Hospital Price Transparency Rules in 2021, yet price transparency is still evolving.

The Trump administration is taking new steps to enforce its price transparency requirements, with updated guidance for providers and payers, and a request  for public input on how to boost compliance with existing transparency rules.

The CMS guidance updates now require hospitals and health systems to list “actual prices of items and services, not estimates.”. Additionally, the departments of Health and Human Services (HHS), Labor and Treasury are requesting information on payers’ readiness to comply with drug price disclosure requirements, a consistent pain point for the industry. The  request follows Trump’s executive order in late February that sought to strengthen price transparency regulations that were instituted in his first term.

To do: Providers

Providers are required to create and maintain a patient-friendly pricing display for up to 300 shoppable services and a machine-readable file with negotiated rates for every service the health system provides.

The federal government is also getting more specific about what hospitals and insurers need to do to be in compliance with the price transparency rules.

CMS’ recent update requires health systems to publicly share, whenever possible, a “standard charge dollar amount” for services, including cash prices, gross charges, payer-specific negotiated rates, and any minimum negotiated charges. When a dollar amount isn’t available, providers can list prices as a percentage.

To do: Payers

This update also pressures payers to be more transparent. Payers will have to update their price reporting format for rates for covered items and services, out-of-network allowed amounts, and negotiated rates for covered prescription drugs.

Ultimately, the updates are aimed at creating more patient-friendly files that are easier to navigate and reduce duplicate and redundant data. The full report will be released in October and enforcement will start in February 2026. If payers don’t comply, they can be audited, receive warnings, and be subjected to a corrective plan or financial penalties.

For CFOs

CFOs should note that states are taking action to address price transparency. Colorado expanded its price transparency regulations around PBMs and prescription drug data, and other states have implemented similar laws requiring providers to comply with federal price transparency laws.

Non-compliance with price transparency laws can damage a health system’s reputation. As more patients demand pricing clarity, failing to meet transparency rules could lead to a loss of business, lower patient satisfaction, and potential legal challenges. See this article for some tips on navigating compliance.

CFOs should take the time to submit feedback on the updates, as well as making sure they are involved in healthcare at the regulatory level.

Compliance

Although providers can face fines for noncompliance, the Patient Rights Advocate and the HHS’ Office of Inspector General both issued reports last year that detailed widespread noncompliance with the rules, partially due to a lack of oversight from CMS.

While CMS has only fined 17 health systems for noncompliance, the fines were substantial, often in the ballpark of 50,000.

Healthcare executives have voiced frustration with reporting requirements, and CMS’ enforcement actions show that providers are still struggling to respond.