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2016
Price Transparency 2022
Hospital Perceptions of CMS Regulation
Author
Dustin Cragun
Author
Alex McIntosh
Author
Tyler Sycamore
As of January 1, 2021, all US hospitals must comply with CMS’ price transparency regulation, which stipulates that hospitals must provide clear, accessible pricing estimates online for at least 300 different shoppable services. Many healthcare organizations have expressed that a variety of challenges make this mandate difficult to meet. In this perception report, KLAS interviewed 66 revenue cycle leaders to understand how hospitals are responding to the regulation and their future plans around price transparency. Going forward, KLAS intends to continue to measure and provide insights into the consumerization of healthcare.
Though Respondents See Value in Price Transparency, Most Cite Significant Challenges around Regulation Deployment
Many respondents feel the price transparency regulation is a step in the right direction toward the consumerization of healthcare and helps empower patients to oversee and control their own healthcare costs. However, the majority of survey respondents doubt the efficacy of the regulation as it exists today; of the respondents who anticipate that price transparency will moderately improve patient financial outcomes, over half believe the existing regulation needs additional clarification and federal guidance. There are concerns about cost, data accuracy, and patient adoption of pricing tools; some respondents worry about patients’ ability to understand the displayed pricing data, and today, most patients are unaware online pricing information exists or are unsure of how to interpret it. Additionally, respondents from smaller organizations worry price transparency will drive patients to larger hospitals for elective procedures and other shoppable services due to larger hospitals’ more competitive prices.
Many respondents are highly dissatisfied with two specific aspects of the regulation: the requirement to use machine-readable files containing pricing information and the requirement to broadly publish online a master list of rates. Respondents believe these requirements are onerous, citing difficulties with the software used to publish the pricing information. Some say the published rates mainly benefit payer and provider organizations instead of patients.
“The government’s current methods are not the best way to go about things. . . . The government wasn’t specific enough to make it easy for a market analyst to use the data. And they sure didn’t do something that patients could use. So the rules missed the mark entirely.” —Executive director of revenue cycle (anticipates moderate improvement to patient financial outcomes)
Most Respondents Say Significant Resource Investment Is Needed to Sustain Price Transparency
Though several respondents feel the regulation is well intended, they say it has been poorly executed. Many hospitals comply only because they are required to by law and because they want to avoid monetary penalties. Additionally, organizations struggle to find resources to help with compliance because of the financial burden of investing in a regulation that doesn’t provide a return on investment. This lack of investment can be problematic since knowledgeable and experienced resources are required to keep the pricing information accurate and compliant. Over the next year, respondents expect they will need to continually invest in people, processes, and technology to meet price transparency mandates. Over half of respondents report price transparency will continue to require a significant number of resources, saying the initial system build-out and the creation of individual templates for every service they wish to estimate a price for will be especially burdensome.
“We need a significant number of resources to keep up with the requirements. I think the original rule said that providers would take about 80 hours to meet the regulations. When I read that, I couldn’t stop laughing. Meeting the requirements has taken an enormous number of resources and has added significantly to the cost of healthcare. If we add the No Surprises Act into the nightmare, that increases the cost of healthcare too because of the way the rules are written. The situation doesn’t make any sense, and the rules are almost impossible to comply with.” —VP of revenue cycle
Respondents More Satisfied Overall with Third-Party Solutions, though EMR Vendors Highly Likely to Gain Market Share in the Future
For help with price transparency compliance, hospitals are more likely to turn to third parties rather than their enterprise EMR vendor. Among this report sample, 18 different third-party solutions are in use, with 25% of respondents using either Experian Health, Vitalware, or nThrive. When asked who is best positioned to lead in price transparency, respondents most commonly chose third parties. Additionally, respondents who use third-party technology rate their satisfaction about one point higher (1–9 scale) than respondents who use their EMR vendor’s solution. Of those who use their EMR vendor for price transparency, Epic is the most mentioned; no Cerner EMR customers in this sample report using Cerner for price transparency. When asked which EMR vendor is best positioned to lead in price transparency, nearly half of all respondents (regardless of their current EMR vendor) mentioned Epic, with a few mentioning Cerner. The remaining respondents are unsure or feel Cerner and Epic are equally well positioned. Among this report sample, Epic is the single vendor most commonly used for price transparency. Because of Epic’s position in the market, their development track record, and their highly functional technology, respondents are confident in Epic’s ability to tackle price transparency challenges and provide necessary tools. While respondents are less satisfied overall with the current performance of EMR vendors’ price transparency solutions, some who currently use a third party say they will consider moving to their EMR vendor’s platform in the future to further consolidate systems. For example, some Epic EMR customers who use a third party for price transparency intend to move to Epic’s offering once it becomes more robust.
“Since most hospitals that use the Epic software have invested a lot of money into it, they want to look to Epic as a partner and get as much out of the vendor as possible. Epic is still developing their muscles around price transparency, but ultimately, they are the EMR that is best positioned for it. They learn quickly and partner with customers, and they seem to be pretty skillful. . . . They are still developing, so getting there may take a bit, but based on what I am hearing, Epic is the one. Over half of the market is on their software.” —VP of revenue cycle
Confusion Abounds around Regulation Expectations and Needs
Respondents say the CMS regulation as it is written today is confusing; it is unclear what organizations need to do and where the regulation will go from here. Many organizations are not investing beyond the bare minimum requirements, and they don’t plan to do more until there is further clarity around the regulations and the expectations going forward. The second most-common challenge, cited by one-third of respondents, is lack of sufficient resources to remain compliant. Respondents are uncertain about the number and types of resources required today, much less the resources required in the future as price transparency rules evolve or are interpreted differently. Several respondents say their organization has had to bring in outside consulting groups to help navigate the requirements. Additionally, many have invested a lot of time into educating their employees about price transparency rules via webinars, classes, and resources for self-directed learning.
“Like everybody else, we are reactive, and we do what we can. But we are hesitant to do more than what is expected or written because the price transparency rules may change. We don’t want to invest in technology or third-party vendors that are ill prepared for changes.” —Business office director
About This Report
To better understand how hospitals are thinking about and responding to the federal government’s price transparency regulation, KLAS impartially selected 66 revenue cycle leaders and interviewed them over the last 12 months to ask the following questions:
- How satisfied are you with your current price transparency offering?
- Is your current price transparency solution part of your long-term plans?
- Who is best positioned to lead the price transparency market?
- What effect will price transparency rules have on patients’ financial outcomes?
- What amount of resources does your organization need to meet compliance?
- Will your organization invest in price transparency in the next 12 months?
- What is your long-term strategy for price transparency?
- What are the biggest challenges with achieving compliance?
Writer
Sarah Brown
Designer
Jessica Bonnett
Project Manager
Robert Ellis
This material is copyrighted. Any organization gaining unauthorized access to this report will be liable to compensate KLAS for the full retail price. Please see the KLAS DATA USE POLICY for information regarding use of this report. © 2025 KLAS Research, LLC. All Rights Reserved. NOTE: Performance scores may change significantly when including newly interviewed provider organizations, especially when added to a smaller sample size like in emerging markets with a small number of live clients. The findings presented are not meant to be conclusive data for an entire client base.