New Executive Order Outlines Next Steps For Health Care Price Transparency
The Trump administration issued an executive order on February 25, 2025 to signal its ongoing interest in enhancing health care price transparency and outline steps federal agencies should take to further implement and enforce existing federal price transparency rules. These rules, established during the first Trump administration and strengthened under the Biden administration, aim to spur competition and drive down costs by arming patients, employers, and policymakers with long-hidden health care prices.
Although hospitals and health plans have posted a massive amount of health care price data, actionable information on prices is still not readily and widely available, partly due to ongoing issues with the usability and quality of the data. The executive order sets up the next steps in an iterative process to improve the usability of health care price data and compliance among hospitals and health plans.
Background On Price Transparency Rules
The first Trump administration established federal rules that require hospitals and health plans to post their prices, including previously proprietary rates negotiated between payers and providers. They must post prices in two different formats: 1) a consumer-friendly format meant to help patients see costs upfront and shop for care, and 2) machine-readable files (MRFs). MRF requirements are meant to give researchers, analysts, and app developers ready access to raw data, allowing them to translate it into actionable insights for consumers, employers, regulators, and policymakers.
The Hospital Price Transparency (HPT) rules took effect in January 2021. They require hospitals to post “standard charges,” including payer-specific negotiated rates, gross charges, discounted cash prices, and minimum and maximum negotiated rates for each item or service provided. The Transparency in Coverage (TiC) rules, which apply to health insurers and group health plans, took effect in July 2022. They require health plans to post MRFs that contain 1) in-network negotiated rates for all covered items and services, 2) out-of-network allowed amounts and billed charges for all covered items and services, and 3) negotiated rates and historical net prices for covered prescription drugs.
Status Of Hospital Price Transparency
Hospitals unsuccessfully sued to block HPT rules days after they were adopted. Rule updates in subsequent years require hospitals to post price data in a more uniform way, include additional context on price data, and make online price files easy to find.
The Centers for Medicare and Medicaid Services (CMS) also stepped up enforcement actions and increased the maximum civil monetary penalty for non-compliance from roughly $110,000 per year to $2 million per year. Hospital compliance improved after CMS increased penalties. CMS has assessed financial penalties on 18 hospitals to date. In addition, from 2021-2023, CMS took nearly 1,300 enforcement actions against hospitals, such as sending warning letters or requiring a corrective action plan.
Both data quality and hospital compliance remain ongoing issues. A 2024 Government Accountability report found that hospital data quality issues have prevented large-scale, systematic use of the data, though analysts anticipated some improvements in light of new CMS requirements for more standardized reporting formats and additional data elements phased in on July 1, 2024, and January 1, 2025. Furthermore, based on a data audit of a sample of hospitals, the Department of Health and Human Services Office of Inspector General estimated that 46 percent of hospitals were not fully compliant with requirements for MRFs, consumer-friendly shoppable service displays, or both.
Status Of Health Plan Price Transparency
The prescription drug MRF requirement from the TiC rules has not been implemented. After industry groups sued to block prescription drug price transparency, CMS deferred enforcement of this provision in August 2021, citing potential overlap with similar prescription drug reporting requirements that Congress enacted after the TiC rules were adopted but before they took effect. More than a year later, a conservative think tank sued CMS to jump-start implementation, and in September 2023, CMS rescinded its deferred enforcement approach, though it has not yet released technical specifications for the prescription drug price data.
TiC rules have followed a different trajectory than the HPT rules; CMS has not refined and strengthened them over time. At the outset, TiC rules required more standardization and were subject to higher penalties for noncompliance, compared to HPT rules. In addition, health plans appear to have complied more readily, though oversight is challenging. Oversight responsibility for health plan data is spread across multiple state and federal agencies. In addition, there is no publicly available list of all the self-insured employer health plans required to post price data, much less an accounting of whether they actually do so. Federal agencies have not released information on audits or enforcement of health plan price transparency data, as CMS has for hospital data.
TiC data are especially hard to access and use, limiting their reach. The TiC rules have made a staggering volume of health care pricing data available. Collectively, monthly health plan MRFs exceed a petabyte in size and contain more than 1 trillion prices, limiting access to entities with substantial computing resources. Unwieldy MRFs are inflated by redundant and irrelevant data, including implausible “ghost rates” for providers who do not perform a specific health care service (e.g. the rate for a cardiology code billed by a podiatrist, or vice versa). A range of other well-documented data issues make it challenging to analyze the data, make comparisons, and draw meaningful conclusions.
Researchers and stakeholders who want access to these complex data often rely on commercial data vendors that specialize in ingesting and parsing massive TiC MRFs. These vendors reportedly charge hefty fees and can place limits on how the data are displayed or shared. Accordingly, while the best-resourced stakeholders can access these data, actionable information from the data isn’t widely and readily available to consumers, employers, and policymakers.
Executive Order Directives
The order broadly signals the Trump Administration’s ongoing commitment to increasing health care price transparency and directs specific actions to further implement and enforce existing TiC and HPT rules. Specifically, the order directs that by May 26, 2025, the Departments of Health and Human Services, Labor, and Treasury (collectively, the “tri-agencies”) take action with respect to the TiC and HPT rules to:
Require that “actual prices of items and services, not estimates” are posted;
Issue guidance or proposed rules to ensure price data are “standardized and easily comparable across hospitals and health plans;” and
Issue guidance or proposed rules to increase enforcement and improve compliance with the rules.
The order does not explain what exactly is meant by actual prices versus estimates, and it will be up to the tri-agencies to interpret it. HPT rules point to price estimates in at least two places. First, the rule, as adopted in 2019, allows CMS to deem a hospital compliant with posting prices of shoppable services in a consumer-friendly manner if it has a “price estimator tool” on its website. Second, the most recent update to the rule requires a new data element—an “estimated allowed amount”—as of January 1, 2025. This element is required when a hospital’s negotiated rate is determined by an algorithm that results in variable dollar amounts as opposed to a simple or static dollar price. The estimated allowed amount must be expressed in dollars and cents using historical data to estimate what the hospital has been reimbursed on average for a service, and it must be included along with a description of the algorithm itself.
The order explicitly directs further data standardization and more enforcement. The tri-agencies have an opportunity to make the TiC data more accessible and useable—needed precursors for the data to have the desired impact—and further standardization is a starting point. The tri-agencies could act by updating TiC technical specifications, regulations, or both.
CMS has tools and processes in place for hospital-focused enforcement and could step up its oversight efforts. This groundwork could inform any subsequent tri-agency effort to enforce TiC requirements, though that would be an inherently more challenging task with more reporting entities, more regulatory agencies, and more complex data.
Beyond the three specific directives above, the order broadly instructs the tri-agencies to “rapidly implement and enforce” existing price transparency rules. Although not specifically enumerated, this may prompt CMS to produce stalled TiC technical guidance outlining how payers must post negotiated rates and historical net prices of covered prescription drugs.
Looking Forward
Increasing price transparency is expected to have a minimal impact on making health care more affordable overall, but it is nonetheless important to give patients needed information and help employers, regulators, and policymakers better target cost-containment efforts. The impact of the rules thus far is hard to measure. An initial analysis from a commercial vendor of price transparency data found signs that the significant variation in prices for hospital services is converging, with some of the highest prices dropping and some of the lowest prices climbing.
This executive order does not break any new ground on price transparency. Rather, it refocuses federal agency attention on making already-required price data easier to get and use, which is a needed precursor to making meaningful and actionable price information readily available to consumers, employers, and policymakers. Congress has also shown interest in improving and expanding health care price transparency and could take the lead on any needed steps that would exceed existing statutory authority.
The tri-agencies tasked with carrying out the order have an opportunity to address the many known issues that limit the usability of price transparency data. The inherent scale and complexity of the price transparency data, particularly the TiC data, limit direct access to researchers and commercial data vendors with specialized knowledge and technology. Today, the best-resourced stakeholders can buy data extracts and insights. Tri-agency efforts to reduce irrelevant and redundant data, increase standardization, and improve data quality could ultimately help open up access to price transparency data and insights from it.
Ramping up oversight and enforcement of price transparency requires sufficient staff capacity at federal agencies where the Trump administration is purging workers. Fifteen percent of the workforce within the Center for Consumer Information and Insurance Oversight – the division within CMS responsible for enforcing price transparency rules – were laid off in February alone, and additional large-scale layoffs may be on the horizon. Squaring the directives in the executive order with the federal employees left to implement them may hinder envisioned progress on price transparency.
Stacey Pogue “New Executive Order Outlines Next Steps For Health Care Price Transparency” March 19, 2025, https://www.healthaffairs.org/content/forefront/new-executive-order-outlines-next-steps-health-care-price-transparency. Copyright © 2025 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.
