LUGPA Policy Brief - Executive Order on Healthcare Price Transparency

March 2025

In February, President Donald Trump signed an executive order reinforcing federal healthcare price transparency regulations. These regulations, first issued in 2019, aim to make pricing information more accessible to patients by requiring hospitals and insurers to disclose actual prices, rather than estimates, for healthcare services and prescription drugs. The executive order directs the Departments of the Treasury, Labor, and Health and Human Services (HHS) to accelerate the implementation and enforcement of these rules, ensuring that price transparency is effectively applied across the healthcare system.

LUGPA has long advocated for policies that increase transparency, reduce costs, and support independent physician practices. Clear, publicly available pricing data is essential to empowering patients to make informed decisions about their care while promoting fair competition across healthcare providers. This policy brief outlines the key provisions of the executive order, the challenges associated with enforcement, and LUGPA’s ongoing advocacy to enhance price transparency.

The executive order directs federal agencies to take immediate action to enforce and strengthen healthcare price transparency regulations. The main components include:

1. Hospital Price Transparency

Hospitals must publish a machine-readable file containing standard charges for all items and services, ensuring that pricing data is accessible for all payers.
Hospitals are required to display actual prices or offer a price estimator tool for at least 300 shoppable services, enabling patients to compare costs before receiving care.
Enforcement policies will be updated to ensure compliance and penalize hospitals that fail to meet these requirements.

2. Insurer Price Transparency (Transparency in Coverage Rule)

Health insurers must disclose real-time, consumer-friendly cost-sharing information for at least 500 shoppable services, with an expanded dataset requirement by January 2024.
This allows patients to understand out-of-pocket costs before receiving medical care.

3. Prescription Drug Pricing Transparency

The order requires insurers and hospitals to provide greater transparency around prescription drug prices, allowing patients to compare medication costs more easily.

4. Stronger Enforcement Mechanisms

HHS will increase penalties on non-compliant hospitals, insurers, and healthcare organizations to improve adherence to the transparency rules.
The agencies will assess whether hospitals are disclosing clear, accurate pricing data and will take enforcement actions against those failing to comply.

The Ongoing Compliance Challenge

Despite these efforts, hospital compliance with price transparency rules remains inconsistent:

Low Compliance Rates: A 2023 report from Patient Rights Advocate found that only 24.5% of 2,000 hospitals fully complied with the price transparency rule.
Inconsistent Data Reporting: Many hospitals post incomplete or hard-to-interpret pricing data, making comparisons difficult for patients.
Financial Penalties: Since 2022, CMS has issued over 1,287 enforcement actions and imposed more than $4 million in penalties against hospitals failing to meet requirements.

While compliance rates have improved, with 70% of hospitals now meeting some level of transparency requirements, recent findings indicate that only 21.1% of hospitals are fully compliant with all federal price transparency requirements—down from 34.5% in the previous year.

The Government Accountability Office (GAO) has raised concerns about the usability of hospital price data and recommended stronger enforcement strategies, including randomized audits and risk-based assessments to ensure compliance.

LUGPA’s Advocacy for Healthcare Price Transparency

LUGPA remains committed to advocating for meaningful healthcare price transparency to improve patient decision-making and strengthen independent physician practices.

LUGPA’s Policy Priorities on Transparency Include:

Enforce Hospital Transparency Rules: Stronger enforcement ensures hospitals provide clear, accurate, and accessible price data to patients.

Support Independent Physician Practices: LUGPA advocates for site-neutral payments, ensuring that independent physicians are fairly reimbursed compared to hospital-owned practices.

Require Minimum Charity Care Levels: LUGPA supports policies that require nonprofit hospitals to provide a minimum level of charity care (e.g., 3.8%, the average provided by for-profit hospitals) to maintain their tax-exempt status and 340B drug program eligibility.

Repeal the Inpatient-Only List: Eliminating this outdated list will allow patients greater access to lower-cost outpatient services and expand options for independent practices.

Reform the Stark Law: LUGPA supports eliminating restrictions on physician ownership of hospitals and simplifying existing value-based care regulations to foster competition and lower costs.

In March 2023, LUGPA submitted testimony to the House Energy & Commerce Health Subcommittee on “Lowering Unaffordable Costs: Examining Transparency and Competition in Healthcare.” Our testimony emphasized the need for continued enforcement of price transparency rules, fair competition between hospitals and independent practices, and site-neutral payment reforms.

LUGPA will continue to monitor price transparency developments, advocate for fair policies, and support independent physicians in delivering high-quality, affordable care.

The Executive Order on Price Transparency represents a crucial step toward empowering patients and lowering healthcare costs by ensuring they have access to clear, accurate pricing data. However, enforcement challenges remain, and LUGPA will continue to push for stronger compliance measures, site-neutral payment policies, and increased competition in the healthcare marketplace.