The Trump administration has overhauled the rules requiring health insurers to disclose the prices they negotiate with hospitals, doctor’s offices and other providers, with the goal of making those costs clearer and more usable for the public.
Most insurance companies and employer health plans have been publicly posting their negotiated rates each month since 2022, when the “Transparency in Coverage” (TiC) rules went into effect. But the disclosures — comprised of gargantuan data files often filled with cluttered and ambiguous information — have been near-impossible to navigate or understand, even for experienced researchers, experts say.
On Monday, the HHS and Labor and Treasury Departments issued a final rule patching up gaps in the price transparency requirements, stripping out junk in the data, standardizing file formats and increasing accountability for insuers.
“Greater transparency drives competition, reduces price disparities, and helps lower healthcare costs, a key priority for the Trump Administration,” CMS Administrator Dr. Mehmet Oz said in a statement. “At the heart of this rule is a simple idea: People should know what their health insurance will cover and what they will need to pay before receiving medical care, not after the bill arrives.”
Stakeholders cheered the changes, saying they would make it easier for employers and other plan fiduciaries to lower unnecessary spending, and for consumers to select cheaper sites of care. However, the administration did not finalize certain proposals that would have made price disclosures even more robust.
Revamping TiC
The new final rule allows insurers to stop reporting “ghost” rates, or negotiated rates for services a provider would never perform, like the price for a heart surgery done by a psychiatrist.
Under the regulation, insurers are allowed to use their own internal rules to decide what prices to exclude, though they have to explain why they left out the provider-service combinations in an attached file.
It also requires insurers to report in-network rates as a dollar figure, instead of a vague percentage or some other estimate — though, there’s an exception for contracts that pay providers based on a proportion of billed charges.
Insurers will have to certify that their published information is accurate and complete, and include the name of a specific person — the CEO or a senior executive, for example — responsible for ensuring that’s the case. They also have to make TiC files easier to find on their websites.
The Trump administration also expanded reporting for prices when a provider isn’t in network, by lowering the threshold for disclosing how much an insurer pays for out-of-network care to from 20 claims to 11 claims. The 20-claim threshold was too high, resulting in many insurers issuing little or no data about allowed amounts for out-of-network providers, the CMS said.
The rule also requires insurers to aggregate data on out-of-network prices by insurance market, whether large group, small group, individual or self-insured, which should make it easier to directly compare costs, according to the CMS.
“Taken together, the Departments expect these amendments will significantly increase the amount of out-of-network data disclosed to the public,” regulators wrote in a fact sheet accompanying the regulation.
The rule also includes a number of changes to lower the burden of compliance for insurers, including moving from monthly to quarterly reporting. Federal regulators also reformed how plans report negotiated rates, requiring them to report prices by provider network. Previously, insurers reported prices by an individual plan or policy.
The change should reduce the amount of files insurers have to publish, given multiple plans often use the same networks and rates, the CMS said. It also aligns with how hospitals report their own price transparency data.
The final rule will make it easier for employers to keep health spending down, including by making it more straightforward to spot when one hospital charges more than another for the same procedure, according to James Gelfand, the president and CEO of the ERISA Industry Committee, which lobbies on health benefits issues for companies. Employers can then aggressive negotiate costs or cut those high-cost providers out of network.
“The first round of price data opened the books. This rule makes the data usable by a general audience,” Gelfand said in a statement Monday.
“We believe that these new rules are going to make a really significant difference,” Elizabeth Mitchell, the CEO of the Purchaser Business Group on Health, which represents large employers, said during a press call Monday afternoon. “This has the potential to meaningfully address the affordability crisis in the commercial market.”
However, the final rule wasn’t as aggressive as some pro-transparency groups wanted, including instituting an 11-claim threshold for publishing out-of-network allowed amounts instead of making that information public when there’s a single claim.
The CMS also didn’t finalize some of the changes proposed in the rule’s original draft, including highlighting specific rate changes in updated disclosures that would have made it easier for users to identify shifting prices without manually comparing two files. Insurers had opposed the change, saying it would have amounted to a massive operational lift for their industry.
Still, the rule is a mixed bag for insurers, which are seeing administrative burden ease up in some areas but increase in others. The departments said they expect the final rule will generate almost $175 million in net cost savings each year for plans and issuers, mostly due to the reduced reporting cadence. But that’s after the first year of implementation. According to an economic analysis in the rule, insurers will face almost $400 million in one-time costs to comply.
AHIP, the U.S.’ dominant insurance lobby, did not respond to a request for comment.
Changes to existing in- and out-of-network rate files will kick in five months after the final rule is published in the Federal Register, while new files created by the update have 11 months before they need to go live.
Improving price transparency has been central to the healthcare agendas of both the first and second Trump administrations. Top health officials have said that making information about prices more accessible will enable consumers to shop between services and create other pro-competitive effects that’ll eventually bring down healthcare spending.
Though it’s shown some localized benefits, increased price transparency has yet to move the needle on the U.S.’ health spending writ large. Some researchers are concerned that greater disclosure could actually increase costs, if providers see their competitors are charging more and raise their own prices accordingly.
In addition, the industry is still waiting on regulators to create a schema for disclosing prescription drug prices, which are a major driver of spending. The CMS said Monday it plans to promulgate those rules separately, and they should be finalized this coming spring.
