The Price Tag

The problem

American health care is the only market in which the buyer learns the price after the purchase, and often after the appeal. The federal government decided in 2019 to end that, and from January 2021 every hospital has been required to post a machine-readable file of every price it charges, including the rates it has negotiated with each insurer and the price it will accept from a patient paying cash. № 043 made the same demand of the drug supply chain. The hospital rule is the earlier and simpler case, and it shows what a rule without teeth becomes.

Compliance depends on who is counting. A study that checked whether hospitals had posted any file found compliance rising from 70 percent in 2021 to 88 percent in 2022. The audits that check whether the file is complete, usable and honest find something else: Patient Rights Advocate's 2024 review found about one in five hospitals fully compliant, and the Inspector General of Health and Human Services, sampling hospitals in 2024, found that a substantial share of those it examined did not meet the rule's requirements. Files are posted with prices missing, with insurers unnamed, with a price listed as a formula that resolves to nothing, or with the file itself buried where no patient and no search engine will find it.

Enforcement has been a letter. By June 2025 the Centers for Medicare and Medicaid Services had issued 2,291 warning notices and 1,331 requests for corrective action plans, and imposed 27 monetary penalties, most of them appealed. The penalty is $10 a bed a day, capped at about $2 million a year for the largest hospitals; a large system's revenue is measured in billions, and the fine is a rounding error against the value of not being shopped. Twenty-one of the twenty-seven fined hospitals appealed, which tells you the rest concluded correctly that they would never be fined.

The country has, in other words, a law that says the price must be published and no consequence for a hospital that publishes a price it does not honour or no price at all. The fix is not a larger fine. It is to make the published price the only price a hospital may charge.

The proposal

The Price Tag: a hospital may not collect from any patient or insurer more than the price it published, for that service and that payer, on the day of service. A service for which no price was published may not be billed to the patient at all. Files are in one federal format, on one federal site, checked by machine. Penalties for a false or missing file are set as a share of revenue. The same rule applies to insurers' published rates.

How it would work

1. The price is the price. A hospital's published price for a service, for a given insurer or for a cash patient, is a ceiling on what it may collect for that service from that payer. A bill above the published price is reduced to it, by law, and the patient may recover the difference with costs. A hospital that wants to charge more publishes more, in advance, where the patient and the insurer can see it.

1. No price, no bill. A service for which the hospital published no price, or a price that cannot be resolved to a number, may not be billed to the patient. The hospital may still bill the insurer under its contract, but the patient's share is zero. This is the consequence the 2021 rule lacked, and it is the one that makes publishing the file cheaper than not publishing it.

1. One format, one site. The Centers for Medicare and Medicaid Services already prescribes a machine-readable format; the Price Tag requires that every hospital's file be filed to a single federal site in that format, checked automatically for completeness, and published there, so that a patient, a journalist or a competitor can compare every hospital in a state on one screen. A hospital's own website may carry a copy. The federal copy is the one that binds.

1. Emergencies. A patient in an emergency cannot shop, and the rule protects them anyway: the bill for emergency care is capped at the published price for the payer, or, where no price was published, at the Medicare rate. The point of the ceiling is not that the patient compares prices in the ambulance. It is that the hospital cannot invent one afterward.

1. Penalties by revenue. A false, incomplete or missing file carries a penalty of one percent of the hospital's gross revenue for each month of noncompliance, in place of the flat daily fee. For a $2 billion system that is $20 million a month, which is the scale at which a compliance officer is hired.

1. Insurers too. The parallel federal rule requiring insurers to publish their negotiated rates carries the same consequence: an insurer may not pay a hospital less than the rate it published for that hospital, and may not deny a claim on the basis of a rate it did not publish. Both sides of the negotiation become visible, and the patient in the middle stops being the only party who did not know the number.

The numbers

The hospitals. About 6,000, of which perhaps 1,200 fully comply by the strict audit and perhaps 5,000 have posted something.

The enforcement. 2,291 warnings, 1,331 corrective plans, 27 fines, in four and a half years. The fines in 2025 ranged from about $32,000 to about $310,000, against hospital systems with revenues in the billions.

What the prices show where they are published. Studies of the files that exist find the same procedure priced at multiples of three to ten across hospitals in the same city, and cash prices below negotiated insurer rates at a substantial share of hospitals, which means the insured patient is sometimes paying more through insurance than they would have paid without it. That is the fact the hospitals had the least interest in publishing.

What binding prices cost the hospitals. Revenue from bills above the published price, and from services with no published price, is revenue the Price Tag ends. Nobody knows its size, because it was never published. The proposal's estimate is that it is a small share of hospital revenue and a large share of the bills that ruin households.

The honest objections

"Hospital prices are negotiated with hundreds of insurers and cannot be reduced to a list." They already are a list, in the hospital's billing system, for every insurer and every code; the 2021 rule asked only that the list be exported, and the hospitals that comply have shown it can be. What the Price Tag adds is that the exported list is the list that binds, which is the only reason a hospital would keep it accurate.

"Patients in emergencies cannot shop, so the price does them no good." The price does them exactly the good in item 4: it caps what they can be charged afterward. The rule was never mainly about shopping. It is about ending the bill that arrives at a number no one agreed to.

"Hospitals will respond by publishing enormous prices and collecting them." They may publish what they like, in advance, on a federal site beside every competitor, and then they may collect it from patients who chose them knowing it and from insurers who agreed to it. A hospital that publishes a $50,000 appendectomy beside a neighbour's $12,000 has made a choice its patients and its insurers can see. That is what a price is.

"One percent of revenue a month is ruinous for a small rural hospital." It is designed to be ruinous, for the hospital that will not publish; it is nothing for the one that does. A rural hospital with a single billing system and a few hundred codes has the easiest file in the country to produce. The penalty scales with revenue precisely so that it is proportionate at every size.

"This is price regulation by another name." It is the opposite: the Price Tag sets no price and caps no price except the one the hospital itself published. It regulates honesty, not levels. A hospital may charge what it likes, so long as it says so first.

Sources

• Centers for Medicare and Medicaid Services, Hospital Price Transparency final rule (84 Fed. Reg. 65524) and enforcement statistics through June 2025, cms.gov
• Office of Inspector General, Department of Health and Human Services, Not All Selected Hospitals Complied With the Hospital Price Transparency Rule (2024)
• Patient Rights Advocate, Semi-Annual Hospital Price Transparency Compliance Report (2024)
• Jiang, Makary and Bai, "Hospital Price Transparency Compliance," JAMA Network Open (2023), on compliance rates 2021–2022
• Becker's Hospital Review, "Hospital price transparency fine enforcement in 2025: 7 things to know"
• Transparency in Coverage final rule for insurers, 85 Fed. Reg. 72158 (2020)
• Proposals № 004 (CitizenCare); № 027 (The Right to a Human Decision); № 043 (The Formulary)