Hospitals face renewed pressure on price transparency
A February 2025 executive order, “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information,’’ has ratcheted up federal scrutiny on hospital price transparency. The directive signals a shift in enforcement, leaving some health care providers exposed to penalties for non-compliance.
The Centers for Medicare & Medicaid Services has swiftly updated its guidelines, now requiring hospitals to post actual dollar amounts for all services in machine-readable files, effectively eliminating placeholder codes. This move aims to make pricing truly actionable for consumers. Penalties, which can range from $300 to $5,500 per day, with potential annual fines exceeding $2 million, are now being levied. CMS is actively issuing warning notices, requiring corrective action plans, and publicly identifying non-compliant institutions. The order may open the door for Department of Justice and state attorneys general to pursue civil and potentially criminal investigations under the False Claims Act.
This intensified push follows years of evolving regulations, from the Affordable Care Act’s initial price posting requirements to the recent Lower Costs, More Transparency Act. Economic analyses suggest full implementation could yield up to $80 billion in health care savings, with some reports indicating a 27% reduction in employer health care costs for common services.
The takeaway
Hospitals should not only understand these rigorous new requirements but also leverage transparency data to optimize pricing, negotiate better payer contracts and identify growth opportunities in profitable services.
Learn more about what’s happening in health care in our industry outlook.
