In an ongoing effort to address the escalating costs of healthcare in the United States, President Donald Trump signed an executive order aimed at enhancing the enforcement of healthcare price transparency rules for hospitals and payers. This initiative seeks to empower patients by providing them with information about the actual prices charged for healthcare services, enabling them to make more informed decisions about their healthcare and shop for high-quality care at the most affordable rates. First implemented in 2019, the regulations require hospitals and insurers to disclose real prices for services and compare prices across different providers, including prescription drugs.
The Challenge of Compliance
Achieving full compliance with healthcare price transparency regulations has been an ongoing challenge since their introduction. Despite the mandate for hospitals to publish payer-negotiated prices and provide online cost-sharing information, widespread noncompliance has persisted. Only about a quarter of hospitals were meeting the requirements two years after the rules came into effect. As of 2023, the Patient Rights Advocate group’s data shows that only 24.5% of hospitals fully complied with the rule to post prices for certain items and services. This staggering lack of adherence underscores the difficulty in enforcing these regulations across the healthcare industry.
Faced with widespread noncompliance, the Biden administration took significant steps to enforce these requirements by increasing penalties for nonadherence. Beginning January 2022, the Department of Health and Human Services (HHS) introduced harsher penalties to compel hospitals to follow the transparency rules. Hospitals with 30 or fewer beds were subjected to a minimum civil monetary penalty of $300 per day, whereas hospitals with more than 30 beds faced fines of $10 per bed per day, with a maximum daily penalty capped at $5,500. These financial penalties aimed to underscore the seriousness of the regulations and incentivize hospitals to comply fully.
Gradual Improvement in Compliance
Despite the initial challenges in compliance, there has been gradual improvement over the past few years. By 2023, approximately 90% of hospitals had posted a machine-readable file containing at least some necessary service rates, a significant increase from the previous year’s compliance rates. Additionally, the American Hospital Association reported that seven in ten hospitals were adhering to the price transparency rules. Commercial payers, in particular, showed even higher compliance rates, with 94% of them adhering to rules that require cost estimates to be available to enrollees, according to a 2023 report by accounting and consulting firm EY.
However, despite these marked improvements, the latest data from the Patient Rights Advocate revealed that complete compliance with federal price transparency rule requirements remained low. Only 21.1% of hospitals fully met the criteria, representing a decrease from the 34.5% compliance rate reported the previous year. The primary reasons for noncompliance included hospitals not clearly associating prices with payer and plan names and not following the mandated formats. These persistent issues highlight the ongoing challenges in achieving full transparency and ensuring all hospitals and payers adhere to the rules consistently.
Enforcement and Penalties
In a continuous effort to tackle the rising healthcare costs in the United States, President Donald Trump signed an executive order to improve the enforcement of healthcare price transparency regulations for hospitals and insurers. This initiative aims to empower patients by providing them with clear information about the actual prices charged for healthcare services, allowing them to make more informed choices about their healthcare options and to seek high-quality care at the most affordable rates. Initially put into effect in 2019, these regulations mandate that hospitals and insurers disclose the true costs of services and facilitate price comparisons among different providers, including those for prescription drugs. The goal is to promote competition and drive down prices, making healthcare more accessible and affordable for all Americans. By fostering transparency, this executive order seeks to create a more consumer-friendly healthcare system where patients can plan and budget for their healthcare needs more effectively.
