Pricing Transparency: The Current State of Affairs

Hospital pricing transparency has been an issue for years. Prices for the same medical service can be vastly different. While healthcare pricing is the result of a complex combination of factors, there are many reasons why the call for transparency is loud and clear.

In an effort to make healthcare pricing easier for patients to understand, the U.S.  House of Representatives passed a bipartisan healthcare policy bill requiring hospitals to make their prices more transparent on December 11, 2023. The bill called the Lower Costs, More Transparency Act, requires hospitals, insurers, and imaging providers to disclose prices for services in consumer-friendly formats, and if hospitals do not comply, they will face stiff penalties. If passed by the Senate, the bill would go into effect in 2026. The current legislation,  which went into effect in 2021, requires hospitals to post pricing for their services online. In 2022, while CMS found that most hospitals comply with the regulation, only 18% are fully compliant.

Pricing Information: Claims Data and Pricing Transparency Data

Pricing information comes from several sources, including medical claims (specifically remit data) and pricing transparency data, which are used for many reasons - each type has its strengths and weaknesses. These data types are often used together to complete the picture and provide insights to decision-makers like those in business development, network development and contracting, and finance. This data is also important for those in payer organizations by providing market intelligence to make better decisions about rate negotiations and new market opportunities. 

Claims Data

Claims data is used to reimburse healthcare providers for medical services. Claims data can be accessed and analyzed mere days from the date of service to discover things like utilization trends and patterns of care. Analyses of claims data can deliver insights that inform many strategic and business decisions and include details like the amount charged by the provider, reimbursed amounts, and allowed amounts for negotiated rates. While remit data, which includes data from claims that were resubmitted for various reasons, is a source of pricing information, it often has information gaps.

Pricing Transparency Data

On the other hand, pricing transparency data has longer lag times than claims data, which can delay analysis, and it’s often missing details about services and providers. However, this data can be rich in price information, such as the cost of services, negotiated rates between providers and insurers, and patient out-of-pocket expenses. Compliance with the regulation for hospital providers to publish price transparency data can be spotty, but the compliance rate has been improving since the regulation went into effect. 

Publishing price transparency data can also help hospital providers build trust with patients and consumers about the costs of healthcare services. Some hospitals are adding pricing tools on their websites, including insurance estimators, so consumers know the allowed amounts and can make more informed decisions about where to receive care. Employers can also benefit from pricing information when budgeting for healthcare expenses and deciding which insurance plans to select for their employees. 

Hospitals and other health providers often make complex, strategic decisions about practice acquisitions, like physician practices or physical therapy practices. While there are many factors to consider when making purchasing decisions, pricing data plays a vital role in determining the value of the practice and aiding in negotiation. Claims data are frequently used to assess the market, including understanding area demographics and demand for specific health services. Claims data can also provide insights into patient origin and migration, volume of services, payer strength, and the competitive landscape, like the presence of physician or physical therapy practices, patient volume, specialties, and identification of any service gaps. Pricing information, including reimbursement rates and payer contracts along with patient volume, can help determine the revenue potential of a de novo practice, its long-term value, and help in negotiating payer contracts.


Many providers we speak with are interested in understanding the allowed reimbursement amounts as a percentage of Medicare payment and how they compare to other providers in their specialty or geographic market. This information allows providers to estimate potential revenue for specific services and procedures and helps providers negotiate reimbursement rates with payers. Many times, the Medicare reimbursement rate acts as a benchmark, and thus, knowing the rate for providers in a market can help negotiate competitive reimbursement rates and assess practice and competitive performance. Other reasons for knowing the allowed amount as a percentage of Medicare include:

  • Revenue Diversification
  • Competitive Pricing
  • Market Positioning
  • Medicare participation decisions
  • General resource allocation, like for equipment and staffing
  • Compliance and Regulation


The accuracy and utility of pricing transparency data can be enhanced when combined with claims data. Kythera Labs’ data transforming platform, Wayfinder, built on Databricks, makes this combination possible. Wayfinder empowers provider organizations to rapidly access and analyze claims and pricing transparency data in one place, accelerating their ability to uncover accurate answers for strategic business decisions. Want to learn more about how Kythera Labs’ high-fidelity claims data and Wayfinder help clients get to work faster and more efficiently? Get in touch at or connect with me on LinkedIn.

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Sean Conway

VP, Healthcare Provider Sales

Sean leads Healthcare Provider Sales at Kythera Labs, bringing his extensive knowledge and experience in provider-specific strategic planning and growth initiatives to customers who depend on Healthcare data analytics to deliver reliable insights. A native of Nashville, you can find Sean spending his free time with his wife, Darci, and their two kids (MJ and Jack) and enjoying the best of what Tennessee has to offer (BBQ, sports, music, and the outdoors)!
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