Have you ever paid the price for a hotel room that is listed on the back of the door? Me neither. It’s common knowledge that the market price of a room is typically less than what is posted.

Similarly, most patients and payers don’t pay the price listed on a hospital’s chargemaster. Accordingly, when hospitals were first required to disclose their chargemasters publicly, the data just didn’t mean much.1

The actual cost of health care services is most often determined in negotiations between payers and providers, with providers accepting discounts off their billed charges in exchange for being included as an “in-network” provider. These negotiated rates have long been held as highly confidential.

The Hospital Rule

Then, in 2019, President Trump issued an Executive Order requiring the Department of Health and Human Services (HHS) to propose a regulation that would require hospitals to make public their actual prices, including their negotiated rates.2

Later that year, the Hospital Price Transparency Rule was issued, which became effective in January 2021.3 The rule was challenged vigorously by the American Hospital Association, but the U.S. Court of Appeals for the District of Columbia ruled against the association’s challenges.4

At first, most hospitals simply failed to comply with the new rule, garnering national press coverage, and leading Congress to call for HHS to take action.5 In an effort to address the issue of rampant noncompliance, the penalties for violations were increased and enforcement actions have begun.6

Although examples of noncompliance are still easy to find, a recent nationwide study reports that the majority of hospitals have now made pricing information available online.7

Angela Rust

Angela Rust,
Marquette 2007, is a shareholder in the health law section
von Briesen & Roper, s.c. in Neenah. Her practice includes advising providers and payers on value-based contracting, direct contracting between providers and self-insured health plans, and business models focused on increasing health ​care consumerism.

The Payer Rule

Meanwhile, the effort to make pricing more transparent has also prompted new mandatory disclosures by payers.

The Transparency in Coverage Final Rule requires most group health plans and health insurers in the group and individual markets to disclose in-network negotiated rates, and allowed amounts paid for out-of-network providers, in the format of machine-readable files (MRFs) that are available on a public website.

Although this Final Rule was released in October 2020,8 enforcement was delayed. It was not until July 1, 2022,9 that the requirement to post MRFs containing these pricing datasets became enforceable and most plans began posting them to public websites.

What Data Is Now Available?

As a result of the Hospital Price Transparency Rule (Hospital Rule) and the Transparency in Coverage Final Rule (Payer Rule), large volumes of data are now available to the public online, containing what were once considered highly confidential negotiated rates.

The Hospital Rule requires posting a consumer-friendly list of 300 shoppable services, or a cost-estimator tool that is designed for patients seeking information about the cost of their care.

The Payer Rule will begin requiring a price comparison tool for plan participants in 2023.

Whether these consumer-facing tools create a meaningful opportunity for individuals to understand the cost of their care remains to be seen. Notably, polls about six months after the effective date of the Hospital Rule showed that most adults were unaware of the price transparency requirements, or mistakenly believed there were no such requirements. Most said they and their family members did not go online to research hospital pricing.10 Even if they had tried, some health systems began using codes to prevent online search engines from displaying the webpages with their mandatory price disclosures.11

In any event, these consumer-facing disclosures are not machine-readable, and would be a burdensome way to evaluate pricing at any scale.

The Hospital Machine-readable Files

One of the stated goals of these price transparency efforts is to enable industry stakeholders to access data to conduct detailed research studies and data analysis, and to “offer third party developers and innovators the ability to create private sector solutions to help drive additional price comparison and consumerism in the health care market.”12

These objectives are the aim of the MRFs, which contain most of the data disclosed to date. The Hospital Rule requires a MRF for each item or service for which the hospital has established a “standard charge.” For this purpose, a standard charge includes gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated rates for the applicable item or service.

The MRF must list each item or service for which the hospital has one or more such standard charges, including a description and appropriate billing code, and the applicable standard charges.

The applicable payer is to be identified when listing negotiated rates. This means that, assuming the data is accurate and accurately deciphered, payers and providers alike will be able to see whether a specific hospital’s negotiated rates are higher or lower than another hospital, with respect to each specific payer.

Although the Hospital Rule applies only to that type of health care facility, the pricing disclosed by health plans under the Payer Rule includes rates for outpatient and ambulatory surgery centers, clinics, and other types of providers.

The Payer Machine-readable Files

The Payer Rule requires each health plan to post three files:

  • an “Allowed Amount File” showing historical allowed amounts during a 90 day lookback period for out-of-network providers;
  • an “In-Network Rate File” showing negotiated rates for an item or service, listed by provider, in dollar amounts whenever possible (with limited exceptions requiring disclosure of percentages when a percent-of-billed-charges methodology is used for contracting); and
  • a “Prescription Drug File” regarding negotiated and historical prices for covered prescription drugs.

Currently the requirement for disclosure of the Prescription Drug File has been delayed until further guidance can be issued. The other two files must be publicly available online and updated monthly.

Notably, self-insured health plans are among those required to comply with these disclosures. If an employer offers multiple health plans with different tiers, networks, or coverage options, each such health plan must disclose its own set of files to comply.

Other Requirements​

The disclosures required by both the Hospital Rule and the Payer Rule must be presented in open, not in proprietary formats (e.g., JavaScript Object Notation is acceptable, Microsoft Excel spreadsheets are not.)

The information must be public and free of charge, and cannot be posted in login-protected environments (as may otherwise be common for other plan notices or patient communications).

The MRFs that have become available under these price transparency rules are very large and not intended for consumer use. Some health insurers have tens of thousands of MRFs posted on their websites, with warnings that each may contain millions of lines of data and might be a terabyte each in size.13 To put this in perspective, one terabyte is the equivalent of about 500 hours of movies or 85,899,345 pages of documents in Microsoft Word.14

The integrity of the data and its usefulness remains to be seen as industry stakeholders begin to sort the large volumes of data that recently became available.

Tips: Guiding Clients

As the impact of these new rules and related disclosures continues to unfold, attorneys will be called upon to offer guidance to multiple stakeholders. Here are just a few opportunities to assist clients in responding to these developments:

Make sure your clients understand applicable effective and enforcement dates. Several delays in enforcement could cause confusion, and modest initial compliance rates could lead to a spirit of complacency that is later costly.

Remind clients of antitrust considerations. In the past, clients may have been counseled for purposes of antitrust compliance to avoid sharing confidential pricing information with competitors that is now publicly available.

It is critical for clients to understand that the mere disclosure of this information publicly does not mean they are free to use it in ways that may amount to price-fixing, collusion, or other anti-competitive conduct. How pricing information is obtained may not matter as much as what clients do with this new information.

Health plans may contract with a third-party administrator or carrier to comply with the Payer Rule. However, while fully insured plans may transfer liability for compliance to their carrier by use of a written agreement, a self-insured plan will ultimately bear liability, even if a vendor does not post the required information in accordance with the regulations.

Employers should review their vendor and carrier agreements for appropriate language, and self-funded health plans should implement appropriate oversight measures when outsourcing compliance for which they would ultimately be held liable in the event of an enforcement action.

If a self-funded employer is engaged in direct contracting with providers in arrangements that are not managed by the contracted third-party administrator, special consideration must be given as to how to include the relevant pricing from these arrangements.

This article was originally published on the State Bar of Wisconsin’s
Health Law Blog. Visit the State Bar
sections or the
Health Law Section webpages to learn more about the benefits of section membership.


​See 42 U.S.C. § 300gg-18(e), and Transparency Requirement Under the Affordable Care Act, 79 Fed. Reg. 49,854, 50,146 (Aug. 22, 2014).

“Improving Price and Quality Transparency in American Healthcare to Put Patients First.” Exec. Order No. 13,877, 84 Fed. Reg. 30,849 (June 24, 2019).

Price Transparency Requirements, 84 Fed. Reg. 65,524, 65,540-585 (Nov. 27, 2019).

Am. Hosp. Ass’n v. Azar, 983 F.3d 528, 538 (D.C. Cir. 2020).

Sara Kliff, “How to Look Up Prices at Your Hospital, if They Exist,”
The New York Times, Aug. 22, 2021.
See alsoBipartisan E&C Health Leaders Urge HHS to Enforce Hospital Transparency Rule,” Press Release: House Committee on Energy & Commerce, April 13, 2021.

CMS OPPS/ASC Final Rule Increases Price Transparency, Patient Safety and Access to Quality Care,” Press Release: Centers for Medicare and Medicaid Services, Nov. 2, 2021.

Michael Underwood,
et al., “CareJourney and Turquoise Health Release the Most Up-To-Date Records on Hospital Price Transparency Data for Public Use,” June 24, 2022.

Transparency in Coverage Final Rule Fact Sheet (CMS-9915-F), Centers for Medicare and Medicaid Services, Oct. 29, 2020.

SeeFAQs about Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 49, CMS.gov.

Nisha Kurani,
et al.,
“Few adults are aware of hospital price transparency requirements,” Peterson-KFF Health System Tracker, June 28, 2021.

Tom McGinty,
et al., “Hospitals Hide Pricing Data From Search Results,”
Wall Street Journal, March 22, 2021.

See n. 6.

See, e.g.,​Transparency in Coverage, UHC.com.

“A Terabyte of Storage Space: How Much is Too Much?,” Kelly Brown,
The Information Umbrella​, University of Oregon, July 8, 2014.