President Donald Trump signed an executive order Tuesday to reinforce rules, put into place during his first term, that push hospitals and payers to make healthcare prices more transparent for patients.
The order directs the Departments of the Treasury, Labor, and Health and Human Services to rapidly implement and enforce the Trump healthcare price transparency regulations, which were first issued in 2019.
These rules were "slow walked" by the Biden administration, the White House said in a fact sheet explaining the executive order.
The executive order directs the Treasury and Labor departments and HHS to ensure hospitals and insurers "disclose actual prices, not estimates" and take action to make prices comparable across hospitals and insurers, including prescription drug prices.
The departments also are directed to update enforcement policies to ensure hospitals and insurers are in compliance with requirements to make prices transparent.
"When healthcare prices are hidden, large corporate entities like hospitals and insurance companies benefit at the expense of American patients. Price transparency will lower healthcare prices and help patients and employers get the best deal on healthcare," the White House wrote in the fact sheet.
According to the Trump administration, prices vary widely from hospital to hospital in the same region. "One patient in Wisconsin saved $1,095 by shopping for two tests between two hospitals located within 30 minutes of one another," the White House wrote.
"Our goal was to give patients the knowledge they need about the real price of healthcare services. They’ll be able to check them, compare them, go to different locations, so they can shop for the highest-quality care at the lowest cost. And this is about high-quality care. You’re also looking at that. You’re looking at comparisons between talents, which is very important. And then, you’re also looking at cost. And, in some cases, you get the best doctor for the lowest cost. That’s a good thing," Trump said in a statement cited in the fact sheet.
In November 2019, the Trump administration released a final rule that requires hospitals to publish payer-negotiated prices and a proposal to mandate insurers post online real-time cost-sharing information.
The price transparency rule went into effect on Jan. 1, 2021, requiring all hospitals to post online a machine-readable standard charges file for all of its items and services for all payers. Hospitals must also display the actual prices or a price estimator tool that offers details on the charges for 300 shoppable services.
Health plan transparency, along with the No Surprises Act, was enforceable beginning July 1, 2022, with plans needing to post a list of 500 shoppable services starting January 2023 and a larger dataset that needed to be published by January 2024.
But one of the major problems with price transparency regulations has been hospitals’ slow adaptation to the changes.
A report found that two years after the rule was implementation only about a quarter of hospitals were meeting the requirements. The group Patient Rights Advocate found that in 2023 only 24.5% out of 2,000 hospitals fully complied with a rule to post prices for certain items and services.
The Biden administration decided to hand out harsher penalties to providers that chose to ignore the requirements. Beginning in January 2022, HHS increased the penalty for certain hospitals that are not in compliance with hospital price transparency requirements with a minimum civil monetary penalty of $300 per day for hospitals with 30 or fewer beds. Hospitals with more than 30 beds will be charged $10 per bed per day, which caps at $5,500 daily.
Updates to the rules went into effect last year requiring hospitals to provide additional pieces of data. CMS also updated its enforcement process to shorten the time a hospital must come into compliance once a deficiency is identified.
Compliance rates have improved in the past four years, according to a state-of-the-industry report from price transparency data startup Turquoise Health. Across a total of 6,357 hospitals, about 90% (5,763 hospitals) posted a machine-readable file (MRF) with at least some necessary service rates in 2023. This was an increase of 562 hospitals over the end of 2022.
About seven in 10 hospitals are compliant with price transparency rules, according to the American Hospital Association.
Commercial payers comply at a rate of 94% to rules requiring cost estimates to be available to enrollees, a 2023 report from accounting and consulting firm EY found.
However, the latest data (PDF) from Patient Rights Advocate revealed that a paltry 21.1% of hospitals are fully compliant with all the requirements of the federal price transparency rule. That's down from 34.5% the previous year.
"The widespread noncompliance of 78.9% of hospitals is due to files not having prices clearly associated with payer and plan names and not following required formats," Patient Rights Advocate wrote in its 2024 report. "All of the hospitals reviewed for this report posted a machine-readable file, though 532 hospitals’ files failed the Centers for Medicare & Medicaid Services (CMS) Validator Tool."
CMS has issued civil monetary penalty notices to 18 hospitals for alleged price transparency violations since it began imposing penalties in 2022. Those penalties have ranged from $44,000 to $979,000.