Health care costs are a source of pain and anguish for many Americans. On January 1st. 2021, the Federal Government implemented a new law that went into effect to force hospitals to be more transparent about their charges. So far less than 20% of all hospitals are in compliance with the new rules.

There are many patient advocacy groups pushing for transparency in hospital pricing. Some of the groups include “Power to the Patient”, and “Patient Rights Advocate group.”

The Hospital Transparency Rule is a step in the right direction to help patients understand and be able to make educated decisions about their healthcare.

To date, neither congress, the federal government, nor the Centers for Medicare and Medicaid services have enforced the new guidelines put in place.

New Medicare Price Transparency Requirements

Hospitals are required to provide easy-to-access and clear pricing information online for the services and items they provide. There are two ways that they must provide this information.

They must provide a comprehensive, machine-readable file outlining all items and services. In addition, they must show a display of shoppable services in a format that is friendly to consumers. More information can be found on

Hospitals are also required to provide an internet-based price comparison tool. This tool should allow patients to get an estimate of what they must pay for a specific item or service.

Upon request, this comparison must be given as a paper disclosure. In addition, they’re responsible for providing a similar tool that allows the patient to see the costs for all items and services.

There was a study done of 1,000 hospitals throughout the United States. There were only 143 hospitals that were compliant with the new pricing rules. Over 94% of the hospitals didn’t comply with the two new regulations.

What Repercussions does a hospital receive if they don’t comply?

The penalty for not adopting the new rules varies based on the hospital’s number of hospital beds. Facilities with less than 30 beds will receive a penalty of $300 per day for noncompliance. Hospital facilities with more than 30 beds will be penalized $10 per day per bed.

Hospital price transparency is not a new concept. For years people have been vocalizing their displeasure with the billing and hidden costs associated with health care prices.

Impacts on Health Insurance

As more transparency occurs, the hope is that it would lower healthcare premiums and lower enrollees’ prices. The transparency of negotiated rates and negotiated price breaks that the insurance companies get should force high costs down as the public sees these disparities.

All forms of insurance should have a positive impact on the consumers enrolled. This includes but doesn’t limit it to the affordable care act, Medicare, Medicare Advantage and Supplements, Part D plans, and all forms of private insurance.

While it’s impossible to predict the actual outcome, we’re all hoping for more affordable insurance coverage as a result.


What is pricing transparency in healthcare?

Pricing transparency is an initiative to help lower healthcare costs and help people make more informed decisions about their healthcare.

What is the CMS price transparency rule?

The Centers for Medicare & Medicaid Services implemented a rule starting January 1st. 2021. This rule requires all hospitals to make pricing information easily accessible to the public.

What are the benefits of price transparency in healthcare?

There are many benefits of price transparency in regard to healthcare. One of the biggest advantages is a more predictable cost of care. It can also cut down on common price disparities in the healthcare system.

Forcing healthcare providers to publish the costs will allow Medicare enrollees to compare prices and look for medical services before choosing where to go. Making this public knowledge, in theory, can help to drive the cost of all insurance, including private health plans down for their enrollees.

How does transparency affect the efficiency cost and quality of health care?

Price transparency initiatives will force healthcare providers to compete with each other openly. This will result in lower costs for patient care and high quality of care.

What is pricing transparency, and why is it important?

Pricing transparency is vital for beneficiaries’ decision-making process. It provides greater transparency for them to consider their options for the costs of their health care services from different inpatient and outpatient services providers.

What are the consequences of healthcare not being transparent?

We have seen the consequences year over year of healthcare costs not being transparent. The total cost of healthcare has increased exponentially due to the lack of transparency in the healthcare industry. The high cost isn’t just relegated to hospital and medical services. Drug costs have increased steadily over the years. Drug pricing is another area in which we need more transparency.

What are the drawbacks of pricing transparency?

For the consumer, there aren’t many drawbacks to more pricing transparency. Most drawbacks fall on the healthcare providers and their shareholders as, for years, they have been using an overcomplicated billing and payment system that results in higher patient costs.

What does the “price of a medical procedure” mean?

The price of a medical procedure is the amount that is being charged for the procedure. It could be in several cost-share formats, such as coinsurance, copays, deductibles, and other out-of-pocket costs.

Is there a downside to price transparency?

There isn’t really a downside to price transparency. It levels the playing field and allows for a more competitive and affordable healthcare system.

How can price transparency be improved?

Price transparency can be improved by applying uniform rules to all aspects of healthcare, including prescription drugs.

How does price transparency affect Medicare beneficiaries?

Price transparency will primarily affect beneficiaries enrolled in Original Medicare only. Those beneficiaries, will be able to make better healthcare decisions that can lower the fee-for-service costs they pay. The impact will be minimal for Medicare Supplement and Medicare Advantage health plans. This is because there is a fixed amount they pay for most services. The biggest impact will be any service that has a coinsurance instead of a copay.

The Final Thought

The pricing transparency laws that our policymakers have implemented should positively impact all people who receive health care, regardless of whether they are enrolled in an insurance plan or not.

From uninsured people to people who have completed enrollment in the Medicare system, pricing transparency allows them to take control of their health care.

Written By:
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Lindsay Malzone, Lindsay Malzone is the Medicare editor for She's been contributing to many well-known publications since 2017. Her passion is educating Medicare beneficiaries on all their supplemental Medicare options so they can make an informed decision on their healthcare coverage.
Reviewed By:
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Rodolfo Marrero, Rodolfo Marrero is one of the co-founders at He has been helping consumers find the right coverage since the site was founded in 2013. Rodolfo is a licensed insurance agent that works hand-in-hand with the team to ensure the accuracy of the content.