Health Care PRICE Transparency Act

Bill Number

H.R. 267

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Health

Status

Introduced

Latest Action

2025-01-09: Referred to the House Committee on Energy and Commerce.

Last Updated

2025-03-07T16:08:49Z

AI-Generated Summary

Purpose of the Legislation

The Health Care Prices Revealed and Information to Consumers Explained Transparency Act (H.R. 267), also known as the Health Care PRICE Transparency Act, aims to increase transparency in health care pricing. It requires hospitals and health insurers to publicly disclose detailed pricing information for services and items in clear, accessible formats. This helps consumers understand costs before receiving care, promotes informed decision-making, and encourages competition among providers and insurers to potentially lower prices.

Key Provisions

The bill amends two existing laws: Section 2718(e) of the Public Health Service Act (for hospitals) and Section 1311(e)(3) of the Patient Protection and Affordable Care Act (for insurers). Key elements include:

Hospital Price Transparency Requirements

• Public Disclosure of Charges: Hospitals must publish a list of "standard charges" (regular rates for items or services) in plain language, free of charge, without requiring a subscription, and in a machine-readable format (e.g., easily downloadable or searchable by computers).
• Required Information in the List:
• Description of each item or service.
• Gross charge (the full price listed in the hospital's internal price list, before discounts).
• Payer-specific negotiated charge (the price agreed with specific insurers or plans, identified by name).
• De-identified minimum and maximum negotiated charges (the lowest and highest prices negotiated with any insurer, without naming them).
• Discounted cash price (the price for patients paying cash directly; if no discount exists, the gross charge can be used).
• Billing codes (e.g., CPT or HCPCS codes, which are standard identifiers used for medical billing).
• Focus on Shoppable Services: Hospitals must disclose prices for at least 300 "shoppable services" (routine services that can be scheduled in advance, like a knee replacement). This includes 70 specific services set by the Centers for Medicare & Medicaid Services (CMS) plus additional ones chosen by the hospital. If a hospital offers fewer than 300, it must disclose all. Pricing must include how often the service is provided and billed.
• Alternative Delivery Method: Hospitals can use an internet-based price estimator tool instead, which must:
• Cover at least 300 shoppable services.
• Provide real-time cost estimates based on the user's insurance.
• Be prominently displayed on the hospital's website, free, no personal information required, and searchable by service, code, or insurer.
• Enforcement: Non-compliant hospitals face civil monetary penalties of up to $300 per day until fixed, enforced like penalties under the Social Security Act. The Secretary of Health and Human Services (HHS) can require additional details to raise public awareness.

Insurer Price Transparency Requirements

• Expanded Data Disclosure: Insurers must share more details on costs, including:
• In-network provider rates (prices for services from approved providers).
• Out-of-network allowed amounts and billed charges (maximum insurer payment and full provider charges for non-approved providers).
• Negotiated rates and historical net prices for prescription drugs (agreed prices and past average payments after rebates/discounts).
• Delivery Methods:
• An internet-based self-service tool providing real-time, plain-language responses in machine-readable format, free and without subscription. Users can search by provider, service, or location; refine results by cost or proximity; and get estimates of their personal out-of-pocket costs.
• Paper copies on request, covering at least 20 providers per request, mailed within 2 business days.
• Information for Health Insurance Exchanges: When users inquire about coverage, insurers must provide:
• Estimated cost-sharing liability (e.g., deductibles, copays) including any reductions.
• Accumulated amounts (year-to-date spending toward deductibles or out-of-pocket limits).
• In-network and out-of-network rates, including underlying fee schedules (base rates used for calculations).
• Details on bundled payments (groups of services billed together).
• Notices about prerequisites for coverage, balance billing risks (extra charges from out-of-network providers), estimate limitations, and how copays or assistance count toward limits.
• Special notes for preventive services (which may have no cost-sharing if billed correctly).
• Broader Application: These rules now apply to all group health plans (self-insured or fully insured) and health insurance coverage, not just plans on health insurance exchanges.
• Definitions: New terms are defined, such as "accumulated amounts" (tracked spending toward limits), "historical net price" (average past drug costs after adjustments), "out-of-network allowed amount" (insurer's max payment for non-approved care), and "underlying fee schedule rates" (base pricing used for user cost calculations).

Significant Changes to Existing Law

• Hospitals: Builds on prior rules by adding payer-specific negotiated charges, de-identified min/max charges, cash prices, and billing codes to disclosures. Increases shoppable services from 300 (previously fewer in some rules) and allows price estimator tools as compliance options. Introduces daily penalties for non-compliance, which were not as explicitly detailed before.
• Insurers: Expands required disclosures beyond basic rates to include out-of-network details, drug net prices, and real-time tools. Mandates searchable self-service websites and paper options, with more consumer notices and disclaimers. Extends rules from exchange plans to all group plans and coverage, a major broadening from the original Affordable Care Act provisions.

Potential Impacts

• On Citizens (Consumers/Patients): Improves access to pricing info, helping people compare costs, avoid surprises (e.g., balance billing), and choose affordable care. Could lead to lower prices through market competition but may overwhelm users if tools are complex.
• On Government Agencies: CMS and HHS gain more enforcement tools (e.g., penalties, standards for formats) and oversight responsibilities, potentially increasing administrative workload to monitor compliance and update guidelines.
• On Hospitals and Insurers: Requires significant updates to websites, data systems, and processes, raising short-term costs but fostering long-term efficiency and trust. Hospitals may need to negotiate more openly; insurers could face pressure to lower rates.
• On International Relations: No direct impact, as the bill focuses on domestic U.S. health care.

Main Stakeholders Affected

• Hospitals: Must update and publish pricing data, facing penalties for delays.
• Health Insurers and Group Health Plans: Required to build tools and disclose rates, affecting operations for fully insured, self-insured, and exchange plans.
• Consumers and Patients: Primary beneficiaries, gaining tools to estimate and compare costs.
• Third-Party Payers (e.g., employers sponsoring plans): Impacted through expanded rules on group coverage.
• Government Entities: CMS (for compliance checks) and HHS Secretary (for enforcement and standards).

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens enforcement under existing health laws by adding specific penalties and definitions, potentially leading to more lawsuits or audits for non-compliance. Clarifies "machine-readable" formats to ensure usability without loopholes.
• Constitutional: No major issues; aligns with federal authority over interstate commerce and public health, without infringing on free speech or privacy (as disclosures are aggregated and de-identified where needed).
• Political: Promotes consumer empowerment and market-based reforms, which could appeal across party lines by addressing "surprise medical bills" indirectly through information. May spark debates on implementation costs versus benefits, but focuses on transparency without mandating price controls.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Davidson, Warren [R-OH-8]

Recent Actions

• 2025-01-09: Referred to the House Committee on Energy and Commerce.
• 2025-01-09: Introduced in House
• 2025-01-09: Introduced in House

Bill Versions

• Health Care Prices Revealed and Information to Consumers Explained Transparency Act — issued 2025-01-09 — PDF (17 pages)