FTC warns hospitals on price disclosures

Twenty-four of the country’s largest healthcare services companies have received a warning from the Federal Trade Commission (FTC) that failing to provide accurate, complete, and timely pricing information could violate federal consumer protection laws. This alert specifically targets nonemergency care scheduled in advance.

FTC Chairman’s Letter Emphasizes Compliance

On October 5, FTC Chairman Andrew N. Ferguson issued letters urging these companies to review their pricing disclosures and promptly correct any practices that do not meet their obligations under the FTC Act. Ferguson clarified, “the CMS rules do not provide a safe harbor from liability under the FTC Act.”

Healthcare costs often represent a significant financial burden for consumers, making price transparency essential. Patients frequently invest considerable time and effort traveling for in-person visits, showing the importance of understanding costs upfront before committing to care.

The FTC highlighted that pricing disclosures may mislead patients if they omit physician or facility fees or only cover part of the expected treatment. Patients could reasonably assume the provided information reflects the total cost of care.

Under Section 5 of the FTC Act, unfair or deceptive practices are prohibited. A pricing omission may be considered deceptive if it is likely to mislead consumers acting reasonably. Additionally, a practice may be deemed unfair if it causes substantial, unavoidable harm to consumers, outweighing any benefits to consumers or competition.

Incomplete, inaccurate, or delayed pricing information, according to the FTC, hinders patients’ ability to compare providers before scheduled services. The agency also noted that a lack of transparency places providers who disclose prices honestly at a competitive disadvantage.

These warnings coincide with federal agencies tightening insurer price transparency rules. On October 5, the Centers for Medicare and Medicaid Services (CMS) finalized changes requiring health insurers and employer health plans to publish more accessible pricing data and provide personalized cost estimates by phone.

These measures follow President Donald Trump’s February 2025 executive order on healthcare price transparency. The order directed federal agencies to strengthen disclosure requirements and enforcement, calling for actual prices instead of estimates and comparable pricing information across hospitals and insurers.

The FTC stated it will continue monitoring the healthcare marketplace and “take enforcement action as warranted.” CMS’s existing hospital disclosure requirements include a public, machine-readable file of standard charges, such as prices negotiated with insurers and discounted cash prices.