What information was available before the rules?
Negotiated rates were generally held in contracts between insurers and providers. Employers could review their spending, and patients received bills, but comparing those payments with other insurers’ rates was difficult. Public information about charges offered only a limited substitute.
A 2013 peer-reviewed study by David Muhlestein and colleagues in the Journal of Medical Internet Research illustrates how little pricing information hospitals made available. Among 474 hospital websites surveyed, 1.3% advertised any price. Simple Healthcare’s work builds on research into pricing access that began in 2012.
What do the federal price transparency rules require?
| Rule | Who must publish | What is published | In effect |
|---|---|---|---|
| Hospital Price Transparency | Every hospital | A machine-readable file of standard charges, including the rate negotiated with each payer, plus a consumer-friendly display of shoppable services | January 2021 |
| Transparency in Coverage | Most health insurers and non-grandfathered group health plans | Machine-readable files of in-network negotiated rates and out-of-network allowed amounts, plus a member price-comparison tool | July 2022 for files; 2023 and 2024 for the member tool |
Insurer files cover rates across providers and services, while hospital files report each hospital’s standard charges and payer-specific negotiated charges. Public reporting does not guarantee that every record is complete or relevant. Studies show that ghost rates are widespread and identify meaningful gaps in the completeness of payer disclosures. The research page includes the findings and methods.
What does the published data actually look like?
Public access is the starting point. Three features of the data affect what employers and analysts can conclude from them.
- Scale. Insurer releases can contain hundreds of gigabytes of data. They require a processing system before an analyst can select the relevant rates.
- Ghost rates. Files can list payments for services a provider does not perform, such as cardiac surgery at a dermatology practice. Including those records can distort comparisons.
- Service-level pricing. The files generally report billing codes. Comparing a knee replacement requires connecting the facility, surgeon, anesthesia and other included services into a consistently defined episode.
Cleaning, matching and validation must be repeated as new files are published. Insurer files are updated monthly, while hospitals update at least annually.
What can an employer do with price transparency data?
Employers can use the data at three levels, depending on the decision and the information available.
- Compare the market. Review published rates for a consistent set of services across carriers in the same metro. This can be done without the employer’s claims. We offer a free market read for that initial comparison.
- Assess the plan. Match the employer’s anonymized claims with the published rates to compare payments for the services and providers members use.
- Evaluate a change. Estimate the effect of renegotiation, a network change, direct contracting, reference payments or an alternative site of care. Include implementation costs and effects on provider access.
A market comparison describes published rates for the selected services. A plan-specific projection also requires the employer’s claims and assumptions about how care would change.
What about price transparency for patients?
Negotiated-rate data can help explain what a provider is paid, but a patient’s expected bill also depends on benefits, cost sharing and the services delivered. Our study using a national West Health–Gallup survey on public awareness and use of price transparency examines public awareness and use of this information. Publishing a rate and helping a patient make a care decision require different work.
How did healthcare price transparency come about?
The main milestones explain how the current disclosures developed.
- 2012 to 2013. Research underlying the company’s later work examines hospital pricing access. The 2013 Journal of Medical Internet Research study reports that 1.3% of 474 hospital websites advertised a price.
- 2019. A federal executive order directs the Departments of Health and Human Services, Labor and the Treasury to require disclosure of negotiated prices. The Hospital Price Transparency rule is finalized in November.
- 2020. The Transparency in Coverage rule is finalized in October, covering insurers and self-insured group plans. The Consolidated Appropriations Act, passed in December, adds a prohibition on gag clauses that had kept plans from seeing their own claims and price data.
- 2021. Hospitals begin publishing standard charge files on January 1. Compliance is uneven, and enforcement begins with warning letters and later penalties.
- 2022. Enforcement of insurer in-network and out-of-network machine-readable file requirements begins July 1, making commercial negotiated rates available on a much broader scale.
- 2023 to 2024. The member-facing price comparison tool requirement phases in, first for 500 shoppable services, then for all covered items and services.
Studies of ghost rates, payer file completeness and hospital compliance document limitations in the disclosures. Simple Healthcare has also submitted comments on proposed rule changes. The research page brings those publications and submissions together.
Employers can use the disclosures to examine questions that previously required access to other parties’ contracts. Before acting, identify which rates are relevant to the plan, what remains missing and how those gaps affect the comparison.
How Simple Healthcare helps
Our work examines the quality and usefulness of published pricing data, including ghost rates and payer completeness. Landscape gives analysts access to processed rate tables, while Roadmap combines those rates with a plan’s claims. Simple Healthcare Search, our consumer-facing tool, is coming soon. We publish the methodology and data sources so readers can review how the comparisons are made.