Medical Price Transparency Rule Simplifies Data, Excludes Drugs

Price transparency advocates say a recent health insurance proposal from the Trump administration will improve insights into medical rates, even as it punted on implementing delayed rules around drug price transparency.

The departments of Health and Human Services, Labor, and Treasury released the proposed rule in December, following a related final rule to increase transparency in hospital prices in November. The regulations build on those President Donald Trump finalized in his first term and come amid his efforts to address the cost of living ahead of the midterm elections.

Federal agencies require hospitals and insurers to publish prices of medical services like doctor visits and surgeries to help patients shop for care and enable employers to spot high costs in their health plans. The proposed rule is expected to strengthen and streamline the data, which will aid researchers, consultants, and employers in identifying unnecessarily high prices. But the data are still largely unhelpful for the average patient, and large gaps remain.

The path to true price transparency has taken longer than expected when the first rules were finalized in 2019, thanks to complex billing practices, technical hurdles, and efforts by hospitals and insurers to bury the data. Both the Trump and Biden administrations have worked to unwind the knot little by little over the years.

“Everyone by now should have access to these prices,” said Cynthia Fisher, founder and chairman of PatientRightsAdvocate.org. “It shouldn’t just be technology geeks or people within the health-care business sector. It needs to be for everyone, every employer, every business owner—every hairdresser who has 11 employees.”

Ghost Rates

Researchers and advocates said the biggest improvement in the proposed rule is the elimination of “ghost rates”—contracted prices for services that a particular specialist doesn’t typically provide. The departments noted that a September 2024 analysis found that 73% of hematologists’ rates were for 500 billing codes they were unlikely to use.

The rule would instruct insurers and health plans to exclude ghost rates from their data files.
Another provision requires insurers to report rates at the broader network level, rather than the individual plan level.

Taken together, the rule would greatly reduce the size of the files and erase duplicative data. That would solve the massive problem of “useless” terabytes of data flooding the files, Fisher said.

“It was like 52 Pickup, with not only the cards, but books and other things scattered all over the room,” she said.

The proposal also reduces the administrative burden on insurers, said Alexis Boaz, an associate with Epstein Becker & Green PC.

“That’ll make it much easier for issuers who are submitting on behalf of a lot of different types of plans,” she said.

Several other reporting requirements, such as enrollment figures and plan types, aim to build context around the numbers. The rule also would require insurers to explicitly identify new information in data updates, as well as to standardize the location of the files on their websites.

But the rule lacks the attestation requirement for senior insurance executives that the Centers for Medicare & Medicaid Services included for hospital leaders. That would help enforce compliance with insurance leaders under the False Claims Act, Fisher said. Executives already have to sign off on annual financial reports for the Securities and Exchange Commission.

“They have to verify at the executive level that those financial statements are indeed true and accurate to the best of their knowledge,” she said. “They are personally liable.”

Drug Prices

Also missing from the rule are details for pharmacy benefit managers to report drug pricing data. The parameters were never fully implemented after an administrative pause and a lawsuit from the Pharmaceutical Care Management Association.

The Trump administration sought feedback in June on how to shape the drug pricing rules. But the departments declined to include new parameters in the proposed rule, instead saying they are considering the input for “technical implementation guidance or future rulemaking.”

It’s likely the administration needs more time to build out the new schema because it requires components not included elsewhere in hospital and insurance rates, said Carol Skenes, chief of staff at Turquoise Health.

“My hope would be, based on all the information that they received in the summer, that it would be something that could happen much sooner rather than much later,” she said.

The administration might also be waiting to see what Congress does first. Lawmakers are considering codifying the price transparency rules as part of a larger debate around extending enhanced premium subsidies under the Affordable Care Act.

More oversight is on the way for PBMs regardless. A separate rule pending at the Office of Management and Budget would force more disclosures around compensation PBMs receive for employer health plans.

Out-of-Network Rates

If finalized, the rule would increase out-of-network rate data by lowering the threshold for insurers to report claims information. Out-of-network prices are helpful for several reasons, Skenes said, including understanding how the insurers calculate benchmark rates used in arbitration over surprise bills.

But most important, the data give insight into the rarest and most expensive treatments, like specialty drugs or bone marrow transplants.

“That’s where you need to shop most,” Fisher said.

Effective Date

The rule is set to take effect 12 months after it’s finalized. But hospitals were given just five months to comply, between the hospital rule’s finalization in November 2025 and the effective enforcement date in April 2026.

“‘I’d be interested to know more about the difference in that lead time that the hospitals are getting versus the payers,” Skenes said.

The administration doesn’t even have to wait for the final rule to post a standard schema on its GitHub page, Fisher said. That would help advance efforts in the meantime for both medical and drug prices.

“They could do that right now,” she said.