Imagine leaving a hospital with your newborn child only to learn your bill was $24,000 more than what it would have been at another hospital in the same area. This is the reality for some patients in the San Francisco area—and it is not unique. Across the country, identical procedures have wildly different prices depending on where patients receive care, and patients have almost no way of knowing those prices in advance. Federal transparency rules exist, but their penalties are minimal and rarely enforced.
Without meaningful price transparency, patients cannot comparison shop for care in any practical sense. Prices are hidden, inconsistent, and often unknowable until after treatment, forcing patients to make decisions without the most basic market signal: cost. In that environment, providers face little pressure to compete, allowing wide—and often arbitrary—price variation for identical services. Those inflated and opaque prices don’t stay contained; they feed directly into higher insurance premiums and larger out-of-pocket costs, ultimately shifting the burden onto patients.
Presidents Barak Obama, Donald Trump, and Joe Biden have each taken steps to improve hospital price transparency. The Affordable Care Act required hospitals to publish standard charges online, but those disclosures do not reflect the actual prices patients pay. The chargemaster prices required are inflated baseline prices used for billing negotiations, which are rarely paid in full by insurers or patients.
In his first term, Trump issued a 2019 executive order requiring more consumer-friendly price data, followed by rules from the Center for Medicare and Medicaid Services (CMS) that took effect in 2021 and were later updated in 2026. While Biden did not introduce any new rules, his administration increased penalties for noncompliance.
Even so, these actions have done little to improve transparency and competition because compliance remains inconsistent and often ignored. Although penalties were increased, they remain too small to matter. Fines for large hospitals are capped at $5,500 per day, regardless of the number of violations—just over $2 million annually. For hospital systems generating hundreds of millions, or even tens of billions, in revenue, that is negligible. This leaves hospitals with little incentive to follow the rules.
The second problem is enforcement. Although Centers for Medicare & Medicaid Services is responsible for oversight, enforcement has been limited. Centralized enforcement within CMS has created a bottleneck, and the penalties collected do little to change hospital behavior or benefit patients facing inflated prices. A more effective approach is to tie compliance directly to participation in Medicare and Medicaid. Conditioning eligibility for these programs on adherence to transparency requirements would create a strong, immediate incentive for hospitals to comply, ensuring the vast majority of hospitals meet basic standards for price disclosure.
Congress can fix both problems. First, it should codify transparency requirements into statute rather than leaving them vulnerable to executive action. Second, it should impose meaningful penalties tied to hospital revenue or assessed per-violation, per-day. As long as penalties remain capped at insignificant levels, hospitals will continue to ignore them. Finally, CMS should condition eligibility for Medicare and Medicaid funds on demonstrated compliance with transparency rules. Together, these reforms would greatly increase hospitals’ incentives to comply.
Until these gaps are closed, hospital price transparency will remain more promise than reality. Presidents of both parties have pushed for greater transparency; now Congress must make it enforceable. That means codifying the rules and imposing penalties that matter. Without those changes, hospitals will continue to treat transparency as optional—and patients will continue to pay the price.
Justin Leventhal is a senior policy analyst for the American Consumer Institute, a nonprofit education and research organization that advocates for consumers through evidence-based analysis and data. Visit www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.
