Proposed Rule Would Increase Penalty for Hospitals That Don’t Post Prices

August 6, 2021


Craig Wilson, JD, MPA
Director, Health Policy

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The maximum penalty for large hospitals that fail to post their prices online as required under a federal transparency rule would increase from $109,500 to $2 million per year under a proposed rule issued July 19 by the Biden administration.

The proposed rule comes after a patient advocate group found that only 5.6% of hospitals were fully compliant with the transparency rule and a March assessment found that 83 of 100 hospitals sampled were noncompliant with at least one of the rule’s major requirements.

The requirement for hospitals to post the rates that they negotiate with insurers went into effect at the beginning of this year but was finalized in 2019 by the Trump administration. We have previously written about the evolution of healthcare price transparency efforts at the federal level, which have withstood legal challenges by hospital groups. We also wrote about a companion rule that will require almost all health insurance companies and self-insured plans to disclose pricing and cost-sharing information over several years beginning at the start of next year.

A number of states have been well ahead of the federal government on healthcare price transparency efforts, including Arkansas, where lawmakers enacted the Arkansas Healthcare Transparency Initiative Act in 2015. In the five years since its inception, data from the initiative – including eight years of healthcare claims and enrollment data in the Arkansas All-Payer Claims Database – have been used to support research, healthcare system evaluation, policy development, regulatory oversight, and transparency tool development. Data from the initiative have been valuable during the COVID-19 pandemic, enabling state officials to better understand health outcomes for those with pre-existing conditions who contract the virus.

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