Background
Price and Coverage Transparency Reform
Over the past few years, a number of federal transparency initiatives have been implemented with the stated objectives being to empower consumers and bring down the cost of health care. For example, in addition to the Hospital Price Transparency and Transparency in Coverage (TiC) requirements discussed further below, the Consolidated Appropriations Act, 2021 (CAA) included the following transparency/consumer empowerment provisions:
- The No Surprises Act;
- Prescription Drug and Health Care Spending Data Collection (RxDC);
- Gag Clause Prohibition Compliance Attestation;
- Air Ambulance Data Collection (AADC); and
- Fee Disclosure Requirements for Plan Service Providers (e.g., Brokers and Consultants).
In this post, we focus on the current state of the Hospital Price Transparency and TiC requirements and President Trump’s February 25, 2025 Executive Order, “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information” (EO 13877).
Recent History
Several recent developments inform, at least in part, the issuance of EO 13877.
First, with respect to the hospital price transparency requirements, at least one agency has raised concerns regarding their implementation. Specifically, a November 2024 HHS-OIG report concluded that while 63 of the 100 hospitals included in the agency’s audit sample were in compliance with these requirements, 37 of the hospitals were not in compliance with the requirements to (i) publish comprehensive machine-readable files or (ii) display shoppable services in a consumer-friendly manner, or both.
Second, with respect to the TiC requirements, on February 25, 2025, the Peterson Center for Healthcare and the KFF issued a brief summarizing some of the challenges users were encountering with the data being reported by payers pursuant to these requirements. According to the brief, “the complexity and extremely large size of many of the data files have made it difficult for researchers and many others to effectively gain access to the information.” Other concerns raised in the brief include, for example (i) rates being reported for services the provider does not furnish; (ii) multiple rates being reported for the same service; (iii) identical rates being reported for multiple services; (iv) varying approaches to summarizing rates; and (v) reporting structures materially changing over short periods of time.
Finally, according to the most recent KFF Health Tracking Poll, 61 percent of the public say that enhancing health care price transparency rules should be a “top priority” for the incoming administration and Congress.
Executive Order 13877
President Trump issued EO 13877 in response to what it refers to as “stalled” progress on the transparency front. The EO directs the Departments of the Treasury, Labor, and Health and Human Services (“HHS”) to “rapidly implement and enforce” the transparency regulations by:
- requiring the disclosure of “actual prices of items and services, not estimates”;
- issuing updated guidance or proposed regulatory action that ensures “pricing information is standardized and easily comparable across hospitals and health plans”; and
- issuing guidance or proposed regulatory action updating enforcement policies designed to ensure compliance with “the transparent reporting of complete, accurate, and meaningful data.”
In the wake of EO 13877, several actions can be expected. As a threshold matter, implementing the EO will likely require amendments to the current Hospital Price Transparency and TiC regulations. Next, the EO specifically refers to “increase[ing] enforcement of price transparency requirements.” In January 2022, HHS increased the minimum civil monetary penalty (“CMP”) for violations of the price transparency requirements to: (i) $300 per day for hospitals with 30 or fewer beds and (ii) $10 per bed per day, capped at $5,500 daily, for other hospitals. Since then, CMS has issued CMP notices to 18 hospitals, with proposed penalties ranging from $44,000 to $979,000. Based on the new EO, enforcement activity may increase, including more frequent requests for Corrective Action Plans.
Further, we respect to the costs of non-compliance, Congress may enact increased fines for violations of the transparency laws. The Lower Costs, More Transparency Act (H.R. 5378), which passed the House in the 118th Congress by a 320 to 71 vote margin, provided for an escalating set of fines and authorized HHS to penalize hospitals that were “knowingly and willfully noncompliant . . . two or more times during a 1-year period” up to $10 million per year for the largest hospitals and health systems. Similar legislation is expected to be introduced in the 119th Congress.
What is not clear from the EO is how HHS will define standardization with respect to pricing information. As illustrated in the Peterson-KFF brief, standardizing pricing information such that it is “easily comparable across hospitals and health plans” is a challenge that both the public and private sector have been trying to solve for decades. To the extent that HHS proposes new regulations, the public comment period during the rulemaking process should be enlightening given payor, provider, and other stakeholder experience to date.
Action is required under the terms of the EO by May 26, 2025. We will continue to watch this space closely.
