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Transparency in Coverage data reveals stark rate variations
A report analyzing Transparency in Coverage data reveals stark differences in negotiated rates for care across geography, payers, care settings and facilities.
A new report is shining a light on the black box that is healthcare pricing thanks to newly available data under CMS' Transparency in Coverage rule.
The Transparency in Coverage (TiC) rule requires health plans and insurers to publicly disclose pricing information, including negotiated rates with in-network providers and historical billed charges for out-of-network providers, as well as cost-sharing information. With access to pricing information, CMS intends to empower patients to shop for and make more informed decisions about healthcare.
However, the way plans and issuers must disclose pricing information has kept consumers in the dark. CMS requires TiC data in machine-readable formats, but these tend to be too large and complex for the typical healthcare consumer to use for price comparisons. Even researchers have experienced difficulties comprehending the information.
As a result, previous studies of TiC data have not been widely useful for those who can benefit from healthcare price transparency the most -- consumers and employers.
To determine real dollar amounts and glean actionable insights on commercial prices for hospital and non-hospital procedures, Trilliant Health recently analyzed TiC files of two major payers from February 2025 to April 2025, representing 50 million commercial lives and 27% of insurer market share, as well as over 20 terabytes of data. The firm then combined the raw data with its health plan price transparency dataset to identify rates for over 2,600 hospitals and nearly 3,500 ambulatory surgery centers across the country.
They found significant and largely unexplainable variations in negotiated rates across geography, payers, care settings and facilities.
"The report reveals a startling spread in prices that begs for explanation, not rationalization or justification," Allison Oakes, Ph.D., chief research officer at Trilliant Health, said in a press release. "Employers finally have the information they need to understand the value of the healthcare services they purchase and that their employees receive, while hospitals and payers can be held accountable for value for money."
Wide variations in negotiated rates
The report found significant variation in commercial prices for hospital and non-hospital care. For example, negotiated rates varied by a factor of nine across the country for most of the studied inpatient procedures, which included coronary bypass, major small and large bowel procedures and major hip and knee joint replacements.
To highlight the price variations, researchers pointed to a coronary bypass without cardiac catheterization without major complications or comorbidities (MS-DRG 236). The median rate for MS-DRG 236 was $68,194. However, negotiated rates ranged from $27,683 to $247,902, creating an absolute price difference of $220,219.
Even within the same state, prices varied substantially. For instance, the average ratio for the most to least expensive negotiated rate for MS-DRG 236 was 3.4 for the same procedure. Even within the same hospital, the average absolute difference in negotiated rates was $19,818, equivalent to 29.1% of the median rate ($68,194).
The report found similar differences in negotiated rates across five outpatient procedures, including joint replacement of the hip, joint replacement of the knee, esophagogastroduodenoscopy, colonoscopy and hernia repair.
Where you go matters
The report also found that the national median ambulatory surgery center rate was always lower than the median rate for hospital outpatient departments across all five outpatient procedures studied. Where patients go makes a difference in costs, the report suggested.
For example, a colonoscopy (CPT 45378) performed at a surgery center costs an average of $2,454 less than the median rate at a hospital outpatient department. In other words, a colonoscopy at an ambulatory surgery center costs 67.5% less.
The report identified $4.5 billion in potential savings in a year just on colonoscopies alone if the procedures are performed in ambulatory surgery centers versus hospital outpatient departments.
Price variations by hospital and non-hospital setting are notable, the report highlighted, because most healthcare spending and utilization is in the non-hospital setting.
Unexplainable differences in cost
Why do negotiated rates differ so significantly across geography, payers, care settings and facilities? That is a question the report asked, as no link between quality and cost could be observed.
Trilliant Health explored the relationship between negotiated rates and quality of care, considering that the value of healthcare is often defined as the intersection between these two factors. However, it showed no correlation between aggregate measures of cost and quality among a sample of 10 hospitals that have been featured on various "best hospital" lists.
"If healthcare value is defined as the relationship between the health outcomes achieved and the cost of delivering those outcomes, then logically the extreme variation in healthcare prices for the same service, whether across the country, within the same state or within the same hospital is an example of waste," the report stated.
Stamping out healthcare waste is a top priority for the Trump Administration, which has propelled price transparency rules and enforcement to provide a clearer understanding of value in healthcare.
The tip of the iceberg
Trilliant Health sees this report as "the tip of the iceberg," as it demonstrates the "power of health plan price transparency."
"When data on price is available, real discussions related to healthcare value become possible," the report stated.
Pricing data access and corresponding analyses, like the Trilliant Health report, can enable data-driven decisions across stakeholders.
Self-funded employers, which shoulder the cost of most care among commercially insured patients, can use the report to meet fiduciary duties under the Employee Retirement Income Security Act of 1974, or ERISA. They can also use the data to determine whether the prices they pay are reasonable.
Meanwhile, health systems can get real-time insight into negotiated rates across settings of care to benchmark value and compete on cost and quality. Policymakers can also use the information to understand healthcare pricing instead of estimating costs based on what Medicare would have paid.
"It is axiomatic that bad facts make bad policy, and lazy heuristics like 'percentage of Medicare' are useless to the American public," said Hal Andrews, president and CEO of Trilliant Health. "In a world with Google alerts for $10 changes in airfares, employers and everyday Americans deserve to know about $1,000 differences in the cost of the same surgical procedure."
Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.