Price Transparency in Health Care: Challenges, Opportunities, and the Path Forward

Price transparency has garnered significant attention across the health care, research, and policy sectors. This concept focuses on making the costs of medical services, procedures, and provider charges clear and accessible to consumers. The push for price transparency is fueled by consumers’ frustration with unexpected medical bills and the opaque nature of pricing in the health care industry. Patients are often unaware of the costs of services until after they receive care, leading to financial strain and dissatisfaction. By implementing transparency rules and requirements, policymakers aim to introduce competitive pricing, improve market inefficiencies, reduce overall health care costs, and empower patients with the information they need to choose services that provide the best value. 

However, there are significant challenges associated with price transparency data, such as the complexity of medical billing, variations in pricing, and inaccuracies in the data, among others. At the recent AcademyHealth Annual Research Meeting, two panels featuring a diverse range of perspectives—including researchers, industry leaders, state representatives, and federal policy experts—discussed the challenges and opportunities in unlocking the full potential of price transparency.

Price Transparency Rules and Regulations 

In 2019, President Trump required hospitals and health insurers to disclose price information of all services and items to patients and employers in two different formats: 1) a consumer-friendly format meant to help consumers see the costs of services upfront before they receive care and 2) machine-readable files/format (MRFs). This directive led to the implementation of two policies to advance the administration’s goals. 

In 2021, as part of the Hospital Price Transparency (HPT) rule, the Centers for Medicare and Medicaid Services (CMS) mandated hospitals to disclose prices, including negotiated rates, gross charges, and discounted-cash prices for all hospital items and services. 

The Transparency in Coverage (TiC) rule went into effect in phases in 2022. The rule mandates that health insurers provide three machine-readable files related to 1) in-network negotiated rates for all covered items and services, 2) out-of-network amounts and charges for all covered items and services, and 3) negotiated rates and historical net prices for covered prescription drugs (yet to be implemented). The rule also requires information to be made publicly available through an online consumer tool, easily discoverable on health insurer websites, and regularly updated. 

Challenges Faced by Intended Users of Transparency in Coverage Data 

The government's primary intent was for consumers to be the main beneficiaries of Transparency in Coverage data, with the goal of enabling them to evaluate the costs of medical services and procedures, compare options, and make informed decisions about care, much like the experience of shopping at a retail store. However, unlike a straightforward retail experience, shopping for health care services is far more complex. 

This raises a broader question about the suitability of TiC data for individual consumers.  During the ARM panel, Lauryn Walker, Chief Strategy Officer at VA Center for Health Innovation and Health Data for Action grantee, noted that consumers often that consumers often don't know the specific services or the ICD codes needed during a check-up, such as lab tests, x-rays, or other procedures. This lack of information makes it difficult for consumers to review the services they need and accurately estimate costs before receiving care using the publicly available tools and data. 

While researchers, another key audience for this data, can analyze the data to help consumers, employers, and policymakers make informed decisions, they also encounter difficulties in accessing and using the TiC data. According to the panelists, the TiC dataset is enormous in both size and volume and sometimes requires a supercomputer or help from skilled computer programmers to access and manage the data. Commercial vendors have addressed usability issues by transforming the MRFs into more user-friendly formats. However, their services come at a steep cost, affordable only to well-resourced researchers and institutions. The TiC data also is rife with inconsistencies and duplicates. Another notable issue is the presence of "ghost" or "zombie" rates, where reported rates correspond to providers that do not or cannot provide the listed services. Researchers also raise concerns about the limitations of the dataset. While the HPT and TiC files include negotiated rate information, interpreting this data is challenging without knowing the provider network and corresponding payer, product, and line of business information. 

These challenges force researchers to spend substantial time and resources cleaning the data. This process includes removing duplicate and irrelevant entries, comparing known rates to providers and claims data, performing quality control checks, and supplementing the raw data with missing information. A recent Georgetown Center on Health Insurance Reforms blog sheds light on additional challenges faced by researchers and other users of this data.

Opportunities and Efforts to Improve Transparency-in-Coverage Data 

Despite these challenges, there is a growing momentum toward achieving transparency, with various measures being explored and implemented to facilitate this paradigm shift in the U.S. health care landscape. The panelists highlighted several opportunities, suggestions, and ongoing efforts to improve the data usability and enhance compliance with requirements.

Opportunities to Improve the TiC Dataset: 

1. Require payors to report complete and accurate organizational National Provider Identifier Numbers (NPIs): Currently, the data requires a combination of Taxpayer Identification Number (TIN) values, TIN types, and NPI. However, identifying a provider network’s name and location based solely on TIN is challenging, as this information is not publicly available. Ensuring complete and accurate NPI data can provide up-to-date information to data users who do not have access to other databases.
2. Expand list of providers that must report TiC data: Currently, only health insurers and hospitals are required to report pricing information. However, most health care services are provided by independent providers. To obtain a comprehensive view of health care pricing, it would be helpful to extend the reporting requirements to include all health care providers, such as physician offices, urgent care centers, clinics, and other smaller organizations.
3. Eliminate unused codes from reporting requirements: To eliminate ghost rates, CMS should require hospitals and insurers to share data only for procedures that providers have actually performed. By ensuring that hospitals and insurers eliminate codes never used by a provider or practice, the data size can be significantly reduced, making it more manageable and accurate.
4. Include volume data: The TiC data currently lacks information on volume (i.e., the number of times a health plan or insurer paid a provider for specific services). By requiring providers to report their total volume and insurers to disclose the total volume they have paid for, data users can more accurately calculate the average prices of each service or item and potentially eliminate the issue of ghost codes. 

Suggestions for Researchers to Access and Analyze the Data:

1. If feasible, partner with a data aggregator to obtain clean and organized TiC files.
2. When analyzing data, start at a local or small market level and concentrate on specific provider types (e.g., primary care), services (e.g., behavioral health services), and regions (e.g., a particular state). This approach will make it easier to access, analyze, and manage the data effectively.
3. Engage with payors and inform them that researchers analyze TiC data. This might be beneficial in motivating payors to enhance the data quality and improve any accompanying FAQ document.

Current Efforts to Enhance Compliance and Avoid Redundancy: 

1. Federal Regulation: Building on prior regulations, the current administration issued an executive order earlier this year mandating actions from the Secretaries of Treasury, Labor, and Health and Human Services (also known as the tri-agency) to 1) require the disclosure of actual prices of items and services, rather than estimates, 2) issue updated guidance on ensuring pricing information is standardized and easily comparable across hospitals and health plans, and 3) issue updated guidance on enforcement policies to ensure compliance with the transparent reporting of complete, accurate, and meaningful data.
2. Feedback to Improve the Data: CMS is currently soliciting public input to identify challenges, and improve price transparency compliance and enforcement processes to ensure accuracy and completeness of data. All data users and relevant stakeholders are encouraged to provide input by July 21, 2025.
3. Schema 2.0: The Tri-Agency recently announced they will release Schema Version 2.0 to address some of the key challenges faced by data users. The Departments expect the updated schema will reduce file size by eliminating duplicative data, reducing unnecessary data fields, reducing data redundancy, and improving the user-interface of the dataset. Data users are encouraged to provide feedback on GitHub and in webinars hosted by the tri-agency. 

As efforts to improve price transparency in health care progress, collaboration among key stakeholders is essential. Although individual consumers might experience benefits downstream, the true power of price data is harnessed by employers, policymakers, and researchers. Employers can utilize this data when selecting health plans/benefits for their employees. State and federal policymakers can rely on this data to make informed decisions regarding Medicaid, workforce investments, and other policy-related matters. At the same time, researchers can analyze data to generate insights related to health pricing. By addressing challenges and improving access to clear pricing information, we move closer to a future where these stakeholders can help patients make informed decisions, and health care becomes more affordable and accessible for everyone.

For more insights on how panelists are utilizing the TiC data to understand health care pricing and shape purchasing and policy decisions, check out this LinkedIn post by David Schleifer, Associate Director of Programs at the Peterson Center on Healthcare, on a related panel at TiC data at ARM.