The topic of health care price transparency has gained significant bipartisan support in the U.S., with recent developments making strides toward empowering patients and consumers. An executive order issued by President Trump on February 25, 2025, has reemphasized the administration’s commitment to this initiative. The objective is to review the status of certain transparency regulations that were initiated during the first Trump Administration.
Key Transparency Regulations
Hospital Price Transparency Rule
Three major rules form the foundation of federal transparency efforts: the Hospital Price Transparency rule, the Transparency in Coverage rule, and the No Surprises Act rule. The Hospital Price Transparency rule mandates that hospitals publish machine-readable files and consumer-friendly price lists. These lists allow patients and payers to analyze shoppable services and find the most cost-effective options. Despite these goals, compliance with this rule has been inconsistent. Reports from different sources show compliance rates ranging from as low as 36 percent to as high as 66 percent.
The HHS Office of the Inspector General conducted a small but telling survey, finding that a considerable number of hospitals were not in full compliance with either of the rule’s requirements. This inconsistency can significantly limit the rule’s intended impact, leading to potential disparities in the data available to patients and subsequently affecting their ability to make informed decisions. Additionally, incomplete compliance impedes the overall goal of creating a more consumer-friendly and cost-effective health care market.
Transparency in Coverage Rule
The Transparency in Coverage rule requires group health plans and health insurance issuers in both the group and individual markets to publicly disclose price and cost-sharing information. This rule is designed to empower participants, beneficiaries, and enrollees with accurate pricing data. Despite the difficulty in precisely measuring compliance, available information suggests that the rule has succeeded in advancing the overall mission of transparency within the health care sector.
Effective implementation of this rule has showcased how critical transparent pricing can be in helping individuals navigate their health care choices. Price estimates within the same metropolitan statistical area can vary widely, highlighting the importance of accessible and accurate cost information. The Transparency in Coverage rule has made considerable strides in ensuring that participants are better informed and more capable of making economical decisions. This rule’s impact underscores the necessity of making compliance a more standardized practice across all concerned entities.
No Surprises Act and Consumer Protections
Addressing Surprise Out-of-Network Charges
The No Surprises Act (NSA) aims to protect patients from unexpected and often exorbitant out-of-network charges—a commonly reported issue in the health care system. Even though some health plans are not covered by the NSA, the majority of Americans benefit from its comprehensive protections. Despite the significant impact of the NSA, its implementation has faced challenges, largely due to legal hurdles and differing interpretations.
Over the past few years, the NSA has proven to be operationally effective, reflected by the fact that over 10 million claims fell under its protections according to recent surveys. This widespread impact indicates that the NSA can serve as a vital tool for patients who seek to avoid surprise medical bills, thereby fostering an environment where medical costs become more predictable and manageable. However, continuous efforts are necessary to refine and enforce these rules to maintain and expand their reach.
Employers and Payers Utilize Transparency Data
Strong real-world examples demonstrate that transparency works effectively when applied rigorously. Employers leverage transparency data not only to offer better benefits to their employees but also to control rising health care costs. Insurers and other payers have also found this data valuable, as it allows them to provide accurate cost information to their clients. Such practices show the advantages of transparency in creating a more equitable health care system.
Studies reveal significant potential savings from price transparency at the beginning of a patient’s care journey. A 2023 analysis highlighted that optimizing shoppable services could result in savings of $17–$81 billion annually. For instance, a manufacturer in Wisconsin was able to use price transparency to refer an employee to a more affordable, less invasive elbow procedure, drastically cutting costs from $50,000 to $16,000. These examples underline the necessity of full compliance and the effective use of transparency data to achieve comprehensive cost-saving outcomes.
Compliance Challenges and Success Stories
Ongoing Compliance Issues
Compliance with existing transparency rules remains sporadic across the health care industry, which hampers the realization of full benefits that these rules are designed to produce. Ensuring that hospitals, insurers, and employers adhere to transparency rules is crucial for meeting transparency goals and for effectively reducing health care costs. Strides have been made, but enforcing compliance should be a priority before introducing additional regulations, which might be inefficient or duplicative.
The application of transparency in some sectors has demonstrated substantial cost savings, but these successes have yet to become universal. Employers and payers who make use of current data emphasize the potential gains, showing that when rigorously applied, transparency strategies can yield significant benefits. Nonetheless, the overall effectiveness is limited by the varying degrees of adherence to these rules. A concentrated effort to ensure uniform compliance could help in overcoming these barriers.
Medicare Payment Integrity
The issue of compliance extends to federal programs like Medicare, which has long struggled with improper payments. The HHS’s Payment Error Rate Measurement program has reported decreasing error rates in recent years, but documentation issues persist, contributing to high numbers of improper payments. As of 2024, HHS estimated that Medicare made $54 billion in improper payments, a figure that indicates ongoing challenges.
Most of these improper payments in Medicare’s fee-for-service (FFS) and Medicare Advantage (MA) programs are attributed to insufficient documentation and medical record discrepancies. These errors suggest that they are more likely due to reporting issues rather than fraudulent activities. Efforts to mitigate these improper payments have seen some success, and ongoing strategies are necessary to sustain these gains and address potential sources of inaccuracies. Current efforts have markedly improved payment integrity, but there remains ample room for further progress.
Legislative and Administrative Focus
The issue of healthcare price transparency has garnered considerable bipartisan support in the United States, marked by recent strides aimed at empowering patients and consumers. On February 25, 2025, President Trump signed an executive order that reaffirmed the administration’s dedication to this cause. This executive order specifically aims to review the current status of certain transparency regulations that were originally implemented during Trump’s first term in office. These regulations are designed to make healthcare costs more clear and accessible to the public, with the goal of allowing individuals to make better-informed decisions about their healthcare options. The initiative reflects a growing recognition of the importance of transparency in the healthcare sector, as well as the belief that greater openness can lead to more competition, lower prices, and ultimately, better care. By revisiting and possibly revising these regulations, the administration hopes to continue pushing toward a more transparent and consumer-friendly healthcare system.
