Bipartisan Bill Would Codify, Strengthen Price Transparency Rules

Proposed legislation would take price transparency rules to the next level and establish steep fines for noncompliance.

Legislation proposed in the Senate would codify and significantly expand federal price transparency rules.

The Patients Deserve Price Tags Act, introduced by Senators John Hickenlooper (D-Colorado) and Roger Marshall, MD (R-Kansas) , aims to increase transparency around healthcare prices by establishing new requirements for virtually all healthcare stakeholders and creating stronger mandates for federal agencies to enforce compliance.

New Compliance Rules and Enforcement for Providers

For providers, the bill strengthens and expands existing transparency rules. The Hospital Price Transparency Final Rule already requires hospitals to publicize standard charges and payer-specific negotiated charges. The bill would codify those agency-issued regulations and require specific prices, not estimates, and expand them to other care settings like ambulatory service centers.

The proposed legislation would also enhance enforcement mechanisms, requiring the HHS Secretary to conduct annual audits of a sample of hospitals to ensure data is accurate and complete. Hospitals found to be noncompliant would face steep monetary penalties, ranging from $300 per day for hospitals with fewer than 30 beds to more than $10,000 per day for large hospitals.

This could spell trouble for many hospitals. More than a third of hospitals included in an Office of the Inspector General audit were found to be noncompliant with the Hospital Price Transparency rule issued in 2021.

Payers and PBMs Face New Mandates

The proposed legislation would also introduce new rules for payers, including a federal mandate to create and maintain real-time price comparison tools for their health plans. This tool would provide patients’ real-time, out-of-pocket costs for any item or service from any participating provider, after their personal benefits have been applied.

Pharmacy benefit managers (PBMs) and third-party administrators (TPAs) would also face new requirements. These entities would need to provide semi-annual reports to health plan fiduciaries, such as employers, detailing drug costs, fees, and net spending on prescriptions.

A Response to Growing Frustration Over Affordability

The text of the proposed legislation, released shortly before a Senate Health, Labor, Education, and Pensions (HELP) Committee hearing on healthcare affordability, reflects some of the frustrations, including lack of pricing transparency, that expert witnesses shared.

“Price opacity in healthcare is not a bug in the system—it is the system,” said Chris Deacon, a consultant who formerly served as the director of New Jersey’s state employee health plan.

While the proposed legislation would certainly create new challenges for revenue cycle leaders, it could also shift some of the responsibility for explaining healthcare costs and insurance benefits from providers back to payers.

The requirement that payers provide tools for patients to determine real-time, out-of-pocket costs could, for instance, alleviate one significant challenge that health systems encounter in their attempts to comply with pricing transparency regulations: Inconsistent data from payers.

"Every payer is providing us with different information in a different field. There's no standardization," Ryan Klein, Senior Director of Patient Access and Financial Experience at UW Health, explained during a recent HealthLeaders’ The Winning Edge webinar. "It's helping them understand that there has to be some standardization because otherwise we can't provide an accurate estimate to your patient".