President Donald Trump signed an executive order this week that aims to boost enforcement of hospital price transparency, signaling his priority to crack down on requirements that more than half of New York hospitals don’t comply with.
Trump signed an executive order Tuesday that directs three federal agencies – the Departments of Labor, Treasury and Health and Human Services – to “rapidly implement and enforce” the hospital price transparency rule that he greenlit during his first administration. The rule requires hospitals to publish their prices in a way that patients can easily interpret, as well as in a machine-readable format for large-scale automated analysis.
Though the order does not make clear how the federal government will ramp up price transparency enforcement, it reaffirms the administration’s focus on making medical prices public and transparent as hospitals largely flout the requirements.
Nearly all New York hospitals have published machine-readable files explaining their prices, according to the most recent data published by San Diego-based Turquoise Health, a company that tracks price transparency efforts. However, only 44% of local hospitals are in full compliance with the rule, in part because of data errors or formatting mistakes, said Joe Wisniewski, a price transparency expert at Turquoise. The company does not track how many hospitals post consumer-friendly tools, but Wisniewski said that in many cases patients do not use them.
It’s no surprise that Trump is bolstering hospital price transparency enforcement, given that the policy emerged during his first administration, Wisniewski said. But the order raises questions about how the federal government will ensure compliance.
“Trump was never going to tank his own idea,” Wisniewski said. “But there is some concern from hospital administrators of, ‘where is this going to go?’”
One part of the executive order directs agencies to ensure that hospitals post “actual prices,” implying that a patient should be able to access the price they will be charged for a specific procedure. The language is a shift from the current rule, which requires hospitals to publish an estimate based on the average reimbursement they get from insurance companies.
“I think that line, out of all the lines, spooked a lot of hospital leaders,” Wisniewski said.
Publishing actual prices is challenging because purchasing health care is different from other types of transactions, he added. The cost of a procedure often takes into account a patient’s age or weight and includes a series of costs for anesthesia or facility fees – factors that don’t come into play when buying a car or eggs, for example.
A representative from the Greater New York Hospital Association, which represents more than 200 hospitals in New York and surrounding states, did not respond to a question from Crain’s about how it is advising members on the order.
Wisniewski said he views the executive order less as a formal policy and more as the current administration’s “wishlist.” He hopes that the strategy to ensure patients can view actual prices leads the federal government to push insurance companies to give patients a preview of their medical bill in advance, a provision established in the federal No Surprises Act.
Despite uncertainties about enforcement, the federal government has made clear its intent to reduce medical costs. The Trump administration cited an economic analysis stating that complete implementation of the original price transparency rule could save $80 billion for consumers, employers and insurance companies by the end of 2025.
