The Federal Push for Transparency
Since the Affordable Care Act (ACA) was enacted in 2010, there has been a push for comprehensive healthcare reform, including early efforts to create price transparency. The ACA requires health plans to provide a summary of benefits and coverage, along with a list of definitions to facilitate consumer comprehension.
In 2019, President Trump issued Executive Order (EO) 13877, which directed federal agencies to give patients access to real prices rather than estimates and to make pricing information comparable across health plans. Following that Executive Order, the Centers for Medicare & Medicaid Services (CMS) issued the Hospital Price Transparency (HPT) rule, which requires hospitals to publish their standard charges—including gross charges and payer-specific negotiated rates—and the Transparency in Coverage (TiC) rule, which requires group health plans and insurers to post negotiated rates in machine-readable files (MRFs). Then, in 2021, to address enforcement issues, President Biden’s Competition EO led to CMS increasing the penalty for some hospitals that do not comply with the HPT final rule.
More recently, in February of 2025, Trump signed the “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information” Executive Order. This EO requires the disclosure of actual prices of items and services, not estimates; updated guidance on standardizing pricing information making it comparable across health plans, and proposed regulatory action updating any enforcement policies regarding “compliance with the transparent reporting of complete, accurate, and meaningful data.” While still too early to see what consequences may come from the 2025 EO, the 2019 EO was met with litigation from various healthcare associations asserting that it exceeds CMS’s authority. Ultimately, the U.S. District Court and the United States Court of Appeals for the D.C. Circuit ruled in favor of the government.
In May of 2025, CMS released new guidance documents and requests on price transparency. CMS notes that hospitals had been allowed to use “999999999” as a placeholder when they lacked sufficient historical claims data to calculate an estimated allowed amount. However, CMS found that hospitals were using this placeholder far more often than intended—sometimes for many listed services, undermining the purpose of price transparency. The new guidance instructs hospitals to stop using nine-9s and instead calculate and report actual dollar amounts using electronic remittance data from the prior 12 months, ensuring that machine-readable files contain meaningful, comparable pricing information.
State APCDs as Cornerstones of Price and Quality Transparency Tools
All payer claims databases (APCDs) are comprehensive health databases that include medical, pharmacy, and dental claims, as well as enrollment and provider files collected from private and public payers by state. Maryland was the first state to collect data for an APCD in 1998 and, as of 2025, 24 states have APCDs currently in operation. A 2016 Supreme Court ruling in Gobeille v. Liberty Mutual Insurance Co. hampered state efforts to collect robust data in their APCDs. In Gobeille, the Supreme Court held that employer-sponsored insurance (ESI) was regulated under ERISA and states cannot compel employers to report data to APCDs. Since then, state APCDs have had to rely on voluntary participation from self-insured employers and third-party administrators, and few states provide systematic information on the extent of that participation. In some states, the share of lives covered by ESIs reported to APCDs may be as low as 25 percent. Given that 67 percent of American workers with ESI in 2020 were enrolled in self-insured plans (though not all those plans fall under ERISA), this constraint has significantly limited the completeness and reliability of many state APCD data.
There is an important example from the 2025 legislative session of state APCD changes. In Washington state, HB 1382 was signed in May to modernize the APCD by updating reporting requirements. This bill aligns the Washington APCD with the current federal policy on healthcare price transparency. It also removes the statutory language “Propriety financial information” that previously defined contract terms, discounts, and reimbursement arrangements as proprietary financial information, which allows the APCD to release more complete pricing data. HB 1382 also authorizes the state’s Health Care Authority to serve directly as the lead organization responsible for operating the APCD, eliminating the requirement for a competitive procurement process. The bill retains the requirement that the HCA report to the Legislature every two years on the cost, performance, and effectiveness of the APCD and of the lead organization. It also clarifies that state agencies may use APCD data when purchasing health benefits for their employees.
Recent State Responses to the Need for Transparency
Outside of APCDs, states remain at the forefront of price transparency reform. In recent years, state legislatures have adopted a wide range of strategies to strengthen transparency, close loopholes left by federal policy, and respond to persistent gaps in data collection and reporting. Within the 2025 legislative session, states have armed themselves with new tools to increase hospital, insurer, and prescription drug pricing transparency.
Hospital and Healthcare Pricing Transparency Bills
- Oklahoma SB 889 will take effect in November 2025. This bill will require hospitals in Oklahoma to publicly disclose consumer-friendly and comprehensive machine-readable price lists for 300 common services. Price lists must include “gross charges, negotiated rates with different insurance payors, discounted cash prices, and specific billing codes,” and must also be freely available online. Further, Oklahoma encourages hospitals to comply with the law by imposing penalties: during any period of noncompliance, hospitals are barred from initiating debt collection for services provided in that time frame and the hospital must submit a corrective action plan to the Health Department.
- Washington SB 5493 increases hospital pricing transparency by aligning state law with federal 45 C.F.R. Part 180 which, broadly, requires hospitals to publicly post a machine-readable file of all standard charges and a consumer-friendly display of shoppable services, including gross charges, payer-specific negotiated rates, de-identified minimum and maximum rates, and discounted cash prices. The new law requires hospitals to submit the machine-readable files and the consumer-friendly list of standard charges to the Washington state Department of Health.
Prescription Drug Price Transparency
- Virginia HB 2375 strengthens prescription drug price transparency by requiring Pharmacy Services Administrative Organizations to disclose reimbursement terms and fees to the pharmacies they represent. By improving visibility into these arrangements, the bill aims to increase accountability within the drug supply chain and support more transparent pricing practices.
- Virginia HB 1724, although ultimately vetoed, proposed the Prescription Drug Affordability Board, signaling growing momentum within the state toward stronger oversight of drug pricing. The bill would have given the Board the authority to identify drugs that represent an affordability challenge, and to potentially establish upper payment limits for prescription, generic, and other drugs offered for sale.
Other Transparency
- Indiana HB 1003 is a comprehensive healthcare reform bill that includes pricing disclosures, good faith estimates of healthcare costs, insurer claim rules, and data security requirements. This bill was passed to increase healthcare transparency and improve patient protections.
Conclusion
National health expenditures have been growing in the past decade, with the health share percentage of the Gross Domestic Product (GDP) at 18.0% in 2024. Policymakers at both the federal and state levels, and within both political parties, have recognized that meaningful healthcare cost reform depends on price transparency. While federal regulatory changes may be implemented more slowly and are often harder to enforce, the state-level reforms enacted during the 2025 legislative session show states filling in the gaps with a growing trend toward greater price transparency, increased accountability, and more comprehensive reporting across hospitals, insurers, and prescription drug markets.
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