Health Care Transparency 2.0 – What Might We See in Forthcoming Transparency Regulations
Once the results of the 2024 Presidential Election were in, proponents of increasing the transparency of medical and prescription drug prices – including me – saw an opportunity.
What’s the Opportunity?
Right now, efforts are underway to improve and strengthen the existing regulatory requirements set forth under the Hospital Transparency Rule and Transparency in Coverage (TiC) Rule, both released during President Trump’s first Term.
Recent actions taken by this second Trump Administration confirm for us that White House officials see this opportunity too. Case-in-point: On February 25, 2025, President Trump issued an Executive Order (EO) on Price Transparency.
What Did the EO Say?
The EO directs the Federal Departments (i.e., the Departments of Labor, Treasury, and Health and Human Services) to “rapidly implement and enforce” the existing Hospital and TiC Rules, including updating their enforcement policies “to ensure compliance with the transparent reporting of complete, accurate, and meaningful data.”
The EO goes on to say that any regulations developed by the Federal Departments will ensure that hospitals and health care payers disclose “actual prices of medical items and services, not estimates.”
The EO also states that any forthcoming regulations must make prices comparable across hospitals and payers, including prescription drug prices.
Do EOs Have the Force of Law?
No, EOs are “messaging” documents that articulate the policy goals of the White House. These messaging documents direct the Federal Departments to develop regulations effectuating these policy goals.
And, in accordance with the directives, the Federal Departments are expected to issue regulations in due course.
What Might We See in Forthcoming Transparency Regulations?
Increased Monetary Penalties for Hospitals and Health Care Payers: Over the past five years, multiple studies have shown that hospitals are failing to comply with the Hospital Transparency Rule1. And while the Biden Administration issued regulations increasing the monetary penalties for non-compliance, non-compliance continues to be a common theme.2
Hospitals are not the only ones failing to comply with the Transparency requirements. Health care payers (i.e., insurance carriers) are skirting the TiC Rule by purposefully or negligently populating the publicly available Machine-Readable Files (MRFs) with incorrect pricing information.3 In other cases, the insurance carriers are over-loading the MRFs with duplicative pricing information which makes these Files extremely voluminous and difficult to decipher, effectively making the pricing information unusable.4
The Trump Administration is fully aware of such non-compliance on the part of both hospitals and payers, and I expect that forthcoming regulations will call for hefty monetary penalties for non-compliance with the existing rules.
- Increased Audits: I also fully expect that forthcoming regulations will call for increased audits of both hospitals and payers to check in to see if they are complying with the regulatory requirements. The point here is this: If you (i.e., a hospital or carrier) know that you might get audited – and you now know that you might get hit with big monetary penalties for non-compliance – that will be expected to change behavior.
Attestation of Compliance: Self-insured plan sponsors are currently liable for failing to comply with the regulatory requirements. But in many cases, self-insured plan sponsors cannot get accurate information from service providers (like insurance carriers) to comply. As a result, plan sponsors are victims to what the insurance carriers give (or don’t give) to them.
The Trump Administration may flip this liability for non-compliance. That is, forthcoming regulations may impose liability on those service providers (i.e., insurance carriers) that fail to give plan sponsors the appropriate and correct information they need to be in compliance.
One approach the Federal Departments are considering is to require an authorized representative from the insurance carrier to “attest” to the accuracy of the pricing information set forth in the carrier’s MRF. This same attestation requirement could be imposed on hospitals too, requiring a hospital representative to “attest” to the accuracy of the hospital’s MRF.
Standardization of the MRFs: Currently, the MRFs are not easy to read and decipher. This has contributed to much consternation among those data scientists and start-up companies that are culling through the trillions of terabytes of data in the MRFs, and this is arguably the root cause of the inability to effectively consume and make the data actionable.
One way to try to fix this problem: Develop new fields within the MRFs clarifying billing code types, service settings, and the charge class (facility vs. physician). Also, require the disclosure of the methodology for deriving the amounts listed in the MRFs, or develop a formula for deriving the average price for a particular medical item or service that has multiple payment methodologies like a percentage of billed charges, a per diem rate, and other stacked payment formulas. They could also make sure that the National Provider Identifier (NPI) is the same as the Taxpayer Identification Number (TIN) for a particular provider listed in the MRF.
There are many other ideas for standardizing the MRFs, including developing ways to decrease the size of the Files and eliminate duplication and “ghost rates,” and I expect that we will see some or all of these ideas in forthcoming regulations.
- Making Uniform the “Negotiated Rates” In the Hospital and TiC MRFs: An interesting quirk that data scientists and others who have examined both the hospital and payer MRFs have found is that the “negotiated rate” that is listed on a hospital’s MRF for a particular health care payer is NOT the same as the “negotiated rate” listed in this respective payer’s MRF. This lack of uniformity makes it nearly impossible to do an apples-to-apples investigation of the different prices charged for the same medical item or service in a geographic area. The Federal Departments know this is a problem, and it is anticipated they will try to fix it in the forthcoming regulations.
What’s Next?
From my perspective, I see three possibilities.
- Possibility #1: The current Trump Administration – with the help of stakeholders and proponents of increasing price transparency – will improve and strengthen the existing Hospital and TiC Rules, the existing data-sharing requirements, and finally build-out the Prescription Drug File which will require the public disclosure of the prices of prescription drugs.
- Possibility #2: Stakeholders and proponents of increasing price transparency will continue to work with the Trump Administration to develop another set of regulations intended to increase price transparency and the payment practices of hospitals, payers, drug companies, and also PBMs. This Transparency 3.0 will include new ideas ranging from the use of Application Program Interfaces (APIs) and other innovative approaches to increasing access to consumable and usable data.
- Possibility #3: Looking past the Trump Administration, develop ideas on what is possible in 2028 and beyond (irrespective of which political party is in the White House) to continue to transform the industry.
1 National Institutes of Health, Hospital noncompliance with U.S. price transparency regulations, May 21, 2022 at https://pmc.ncbi.nlm.nih.gov/articles/PMC9903964/#:~:text=As%20of%20January%201%2C%202021,2 ; see also, The United States General Accounting Office, CMS Needs More Information on Hospital Pricing Data Completeness and Accuracy, October 2024 at https://www.gao.gov/assets/gao-25-106995.pdf ; 2 Centers for Medicare & Medicaid Services, Enforcement Actions at https://www.cms.gov/priorities/key-initiatives/hospital-price-transparency/enforcement-actions; 3 See, e.g., Georgetown University Center on Health Insurance Reforms, Considerations for Federal Agencies Tasked with Improving Health Plan Price Transparency Data, May 20, 2025 at https://chirblog.org/considerations-for-federal-agencies-tasked-with-improving-health-plan-price-transparency-data/; 4 Id.
The information provided does not, and is not intended to, constitute legal advice; instead, all information and content herein is provided for general informational purposes only and may not constitute the most up-to-date legal or other information. This summary is provided by a consultant to Benefitfocus.com, Inc., and any opinions expressed within do not necessarily reflect those of Benefitfocus.com, Inc. or its affiliates and are not intended to provide specific advice or recommendations for any plan or individual.
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