President Trump signed an executive order on February 25th on health and human resources directors Robert F. Kennedy Jr. (left) and Commerce Secretary Howard Lutnick (right) to sign an executive order on February 25th on price transparency requirements for the healthcare industry. Alex Wong/Getty Images hides captions
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It is the holy grail of health care. It forces the industry to reveal prices negotiated between health plans and hospitals. And among the gusts of the executive order signed during the first five weeks of President Trump's inauguration, there was a promise to “make America healthy again” by giving patients accurate medical prices.
The goal is to make it easier for hospitals and health insurance companies to compare the actual prices of medical procedures and prescription drugs. Trump has given power through the end of May, coming up with standards and mechanisms to ensure that the healthcare industry is compliant.
But Trump's 2025 order is also a symbol of how much progress the country has not made since issuing a similar order almost six years ago. Consumers find it only partially useful, and the quality of the information is uneven.
The first step in offensive “bold”
Gary Claxton, senior vice president of KFF, a health information nonprofit that includes KFF Health News, said the orders for 2019 were “pretty bold.” “They basically went to the provider and the plan and said, “I think all this data you think is a secret that we won't be confidential anymore.” “
There was a disappointment for consumer advocacy groups after that. Hospitals and insurance companies are listed on their websites and have a huge, complicated and confusing data on prices. This information is a challenge for even medical pricing experts to navigate, let alone consumers. Some members of Congress have submitted laws to put the power of the law behind price transparency requirements. Those bills died. And President Joe Biden's administration has been criticized for not enforcing the regulations more tightly, and one consumer advocacy group even bought a Super Bowl ad featuring rapper Fat Joe, who claims “hospitals and insurance companies are hiding prices.”
Trump's new order, signed in February, said hospitals and health plans were “not well maintained when price transparency data is incomplete or not posted at all.”
The government's Office of Accountability reported in October that the Centers for Medicare and Medicaid Services were unaware that the prices reported by the healthcare industry were correct or complete. However, the CMS, which regulates hospitals, now plans to “systematically monitor compliance” and will help agencies understand the requirements, said Katherine Howden, the agency's spokesman.
Howden did not answer questions about whether CMS staff oversee price transparency compliance.
“Zombie” rates and other contradictions
Meanwhile, independent researchers have discovered many issues with the quality of price data shared by both hospitals and health insurance companies with consumers.
A recent report from the Peterson-KFF Health System Tracker often includes the data reported by four New York City health insurance companies, which say they will pay hospitals for services that these healthcare providers cannot provide or can't provide. These are called “ghosts” or “zombie” rates. For example, according to the Health Plan, dentists, optometrists and auditors reported being paid for knee replacements, gastrointestinal tests and other procedures not related to their specialty.
Otherwise, the data included different prices for the same services paid by the same insurance company in the same hospital. UnitedHealthCare, for example, reported that it would pay three New York Presbyterian/Weill Cornell Medical Center fees ($47,000, $64,000 and $70,000) to treat a heart attack.
Or the insurance company reported that they would pay the same price for very different services. For example, Aetna said he paid just $6,292 to Sinaibes Israel Hospital for treatment of respiratory infections, heart attacks, gastrointestinal cancer, kidney and urinary tract infections, and psychosis.
Neither UnitedHealthcare nor Aetna addressed the data inconsistencies. UnitedHealthcare spokesman Cole Manbeck said the insurers met price transparency requirements and encouraged members to “use cost estimation tools for accurate costs based on a specific health plan.” Aetna spokesman Shelly Bendit introduced the question to Aphe, a lobbying and trade association for insurance companies.
AHIP spokesman Chris Bond said health insurance companies are “strongly supporting” price transparency. The group said it will work with the Trump administration to provide transparency that “promotes competitive private markets in ways that make sense for end users.”
What should consumers do?
David Cutler, a professor of applied economics at Harvard University, said estimates and total prices are less useful for consumers who are primarily interested in what they have to pay for in the end. Depending on your deduction amount, out-of-pocket and other fees, it depends on your health plan.
“Most of the price transparency information doesn't have that,” he said.
It also does not provide consumers with information on the quality of care, Cutler added. “When you go to a restaurant it's like wine,” he said. “People think more expensive wine is better.”
Cutler said he was skeptical that price transparency would reduce costs for patients. However, he said it may provide insight into hospitals and health plans about what competitors are billing and paying for services. Knowledge that incorrectly leads to price increases when hospitals receiving lower fees than their competitors request a higher refund from their health plans.
Trump's recent executive order points out that the top quarter of the most expensive health services prices has fallen 6.3% per year since orders in 2019.
However, the same study mentioned in the executive order showed that analyses by Turquoise Health, a healthcare pricing data company that looked at fees in more than 10 hospitals in the US and more than 200 hospitals, showed that the lowest body of services became more expensive at about 3.4% per year.
Some patients say that research and persistence allowed price transparency to work for them.
Teresa Schmotzer, 50, of Goodyear, Arizona, said she saved nearly $3,000 in outpatient surgery using hospital price data to remove her fibroids last year.
Schmotzer, who has health insurance, said the hospital first told her that she was owing $3,700 for the procedure. But she was skeptical.
She said her health insurance company cannot quote the price of the procedure or specify how much she owe. On the morning of the surgery, Schmotzer said he found a spreadsheet online at PatientRightSadvocate.org, which includes different prices paid by insurance companies, including her. The reported price for the procedure is close to $700, she said.
Schmotzer said she took the printout of the spreadsheet to the hospital and presented it in advance. She paid the $300 deduction and told the hospital to charge her for the rest.
A few months later, she said the bill was delivered by mail for the remaining $400 she paid.
When people go for surgery, it causes fear when they don't make it clear in advance what the cost is, she said. “Because they're blind.”
Next Steps
Hospitals want to work with federal regulators to comply with reporting requirements, according to Ariel Levin, director of coverage policies for the American Hospital Association, which represents around 5,000 agencies. Levin said consumers should give them a “more comprehensive estimate” that describes the price of the service and the entire episode of care and how much they will pay from their pocket based on their health plan.
Since Trump's 2019 order, CMS has developed rules to make it easier to understand price information reported by hospitals and health plans, with agents fines more than 12 hospitals for failing to comply.
Federal regulations allow hospitals to report estimates, price ranges, or historical rates for services, but health plans can adjust prices based on factors such as case severity, duration of treatment, and patient age.
KFF's Claxton said this flexibility doesn't allow “apple-app comparisons” and that the data must be trusted before researchers can use it to better understand medical costs. “It doesn't seem to be that way yet,” he said.
Katie Martin, CEO of the Healthcare Costs Institute, a nonprofit research group, should do a lot, from price transparency to expect competition and cost reductions.
Price transparency alone isn't a silver bullet, Martin said. This is an “important first step” to help employers, lawmakers, regulators and others understand how to flow through the healthcare system and how to make it more efficient. “That's not the whole thing.”
KFF Health News is a national newsroom that produces detailed journalism on health issues and an independent source of health policy research, voting and journalism, one of KFF's core operating programs.
