On Monday, the Trump Administration finalized its latest price transparency rules – a sensible evolution of existing requirements that have generated enormous amounts of pricing data without always making that information easy for patients and others to find, compare, or use. The Centers for Medicare & Medicaid Services (CMS), in conjunction with the Departments of the Treasury and Labor, issued a rule aiming to enhance the clarity and usability of health care pricing data. While it remains to be seen whether these new rules completely correct the imbalances of prior efforts and increase true consumer choice, the initiative is laudable. 

The original Transparency in Coverage (TiC) rules required most group health plans and insurers to publish machine-readable files containing negotiated in-network rates and out-of-network allowed amounts. But subsequent implementation also exposed shortcomings. The files can be enormous, repetitive, and difficult to locate. They may also be filled with negotiated rates for services particular providers would never realistically perform. 

The new final rule attempts to increase the usability of existing data. Insurers will report in-network rates by provider network instead of separately for every plan using the same network, exclude implausible provider-service combinations, and provide taxonomy and utilization information for context. The rule also standardizes file formats, requires attestations from senior company officials regarding completeness and accuracy of the data, and expands usable out-of-network reporting. Meanwhile, in-network and out-of-network files will move from monthly to quarterly publication, reducing compliance costs. 

These are worthwhile reforms that should assuage some longstanding concerns about the impact of the TiC requirements. Transparency is considerably less useful when a person needs enormous computing resources merely to interpret the troves of published data or when patients cannot determine where pricing information is located. Better organized information should make the data more useful to employers, researchers, technology companies, and consumers. 

But the administration’s transparency push is also expanding beyond traditional disclosure rules. Alongside the new regulations, the Federal Trade Commission (FTC) sent warning letters to 24 large health care companies emphasizing that compliance with CMS TiC requirements does not provide a safe harbor from liability under Section 5 of the FTC Act, which deals with unfair or deceptive acts. This re-introduces unhelpful subjectivity to transparency enforcement protocols. 

CMS rules had generally established identifiable obligations: what must be disclosed, how it must be formatted, and when it must be available. Section 5 of the FTC Act is more contextual. The FTC’s letters warn that pricing disclosures may still be deceptive, especially if they omit expected fees, cover only part of a course of care, or arrive too late for a patient to act. Yet concepts such as a “complete” price or “timely” disclosure are harder to pin down in health care, where the ultimate bill can depend on multiple clinicians, coding decisions, ancillary services, illness prognosis, and how treatment courses evolve. 

This more amorphous FTC scrutiny may be difficult to anticipate. A provider could comply with detailed transparency regulations and still face a case-specific FTC complaint over whether its disclosures were sufficiently clear, complete, or timely. The danger is that a legitimate effort to address deceptive pricing becomes a moving compliance target, with its boundaries defined through individual enforcement actions rather than prospective rules. How the FTC exercises its discretion will matter. 

While these new regulations inspire promise, even perfectly accurate prices run into a larger limitation: Transparency does not necessarily create shop-ability. 

Most insured Americans do not purchase medical services in anything resembling a traditional retail market. Their insurer has already negotiated prices, assembled providers into a network, and designed deductibles, copayments, and coinsurance that determine how much of the underlying price a patient bears. That structure is an indelible feature of the way U.S. health care is currently financed, and it constrains what price transparency alone can accomplish. 

Those arrangements can weaken a patient’s incentive to select the cheaper provider. Someone who has not met a large deductible may care considerably whether an MRI costs $600 or $1,200, while a patient facing a fixed $40 copayment may not. Coinsurance preserves more incentives to compare prices, but even then, the patient is generally choosing among providers within a network created through negotiations that occurred long before care was needed. Only a portion of health care spending is realistically shoppable in advance, and studies of consumer-facing transparency tools have generally found limited use and modest changes in where patients receive care. Information matters, but publishing prices does not transform health care into a conventional consumer market. And this is before we even begin to incorporate quality metrics. 

None of this is an argument against price transparency: Markets cannot function particularly well when prices are secret, inaccessible, or misleading. The administration is right to make those prices cleaner, easier to find, and more reliable. But the next real push in health care transparency should focus increasingly on making those prices actionable. A health care market only becomes meaningfully competitive when patients and purchasers can actually do something with the information they have.