Pulling Back the Curtain: How Many California Hospitals Are Complying with Federal Price Transparency Rules?

Stanford Institute for Economic Policy Research


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As of January 1, 2021, a new federal government policy required hospitals to release “clear, accessible pricing information about the items and services they provide” in specific ways. In particular, hospitals must provide information about prices for at least 300 services consumers might comparison shop for, in a consumer-friendly format. Hospitals can meet this requirement by posting a machine-readable file of prices (such as a Microsoft Excel spreadsheet), and by providing a price estimator tool that would allow consumers to enter information and obtain individualized estimates of their out-of-pocket costs. Hospitals not meeting the requirement may be penalized by the Centers for Medicare & Medicaid Services.

A goal of the regulation is to improve price transparency, in the hopes that it will help efforts to manage health care costs. But debate continues about how big an impact the regulation could have, and early reports have shown that compliance with the new regulation is far from complete.

This study was undertaken to see whether California hospitals were complying with the new regulations, as of April 2021. It shows that only 30% of the analyzed hospitals were fully compliant with the federal regulations.

About the Authors

Laurence Baker, PhD, is professor of medicine (health policy) and senior fellow of the Stanford Institute for Economic Policy Research at Stanford University. Bianca Mulaney, MS, MPH, and Shreya A. Shah are Stanford University medical students, and Christine Kim is a predoctoral research fellow at the Stanford Institute for Economic Policy Research.