On February 25, President Trump released an Executive Order, reinforcing hospital price transparency rules from his first term, which require health systems to disclose the cost of their services to the public. While no new regulations have been introduced, hospitals must prepare for compliance if they haven’t already. This article explores effective solutions that have helped 500 hospitals achieve compliance to these crucial rules.
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In case you missed it, President Trump signed an Executive Order on February 25, 2025, mandating the Departments of Treasury, Labor, and Health and Human Services to swiftly roll out and enforce existing hospital price transparency rules.
But here's the twist: hospitals must now reveal actual prices for services and prescription drugs instead of just showing estimated costs. So, what's the impact on hospitals?
Hospitals are in for a major shake-up that could hit them from various angles. First, there is pressure on hospitals to explain their pricing, allowing patients to compare basic costs between different facilities and providers. Speculatively, this newfound transparency could spark serious competition, pushing hospitals to cut prices or offer better deals to attract patients.
Second, if they haven’t already, they'll have to pump money into new systems and processes to track and share their pricing for services and medications. This could mean updating billing software, upgrading IT infrastructure, training teams, and improving reporting capabilities.
If that’s not enough, this could also change the game for insurance companies. As prices become clearer, private insurers might start challenging inflated rates and negotiating harder for payment rates. This could shrink hospital revenues, especially for those with confusing pricing practices.
According to the latest regulations, which took effect in January, hospitals must make their specific standard charge information available on their website in a machine-readable format (MRF). In addition, hospitals must display a separate list of at least 300 “shoppable” services with plain language descriptions of each service and provide standard charge information, including pricing for commonly-reported ancillary services.
It's no secret that providing accurate prices (or estimates, for that matter) upfront is no easy feat for hospitals. Calculating the cost of services is labor-intensive and requires careful coordination and data-sharing among hospital staff, departments, and external partners. Moreover, the complexity of medical procedures, labor costs, and administrative factors creates hurdles for hospitals trying to meet these new hospital price standards.
Variability in charging practices from hospital to hospital complicates the process further. This inconsistency makes it challenging to compare similar services.
According to the Executive Order, hospitals must now display the exact prices for their shoppable services, not estimates, as previously stated. The order also directs the agencies to "update their enforcement policies." But it's still unclear how they will move forward at the time of this publishing.
To be sure, the administration did not unveil new regulations. However, it appears that the Trump administration is doubling down on efforts to make healthcare prices and quality of care more apparent—an initiative introduced in 2019 during his first administration.
Fortunately, hospitals can turn to advanced software that organizes and displays chargemaster data alongside a comprehensive list of shoppable services to tackle these stringent healthcare price transparency requirements while easing staff workloads. Health systems will also need to provide a solid, defensible pricing strategy (DPS) to justify their treatment costs.
Here’s what hospitals need in their wheelhouse to stay on the right side of federal rules and avoid penalties:
1. Align Payer Pricing and Contracts: Gather precise pricing for standard services from all payer agreements.
2. Implement Price Transparency Solutions and Other Technology: Upgrade your tech tools to centralize pricing data for shoppable services while meeting MRF standards.
3. Assess Compliance Resource Needs: Identify gaps in essential resources for the MRF template. Ensure it's patient-friendly and compliant with the enforcement deadlines.
4. Leverage Strategic Partners: Team up with a technology partner for support in compliance, technical guidance, and solutions that can seamlessly and quickly scale across new contracts and facilities.
5. Engage Patients: Proactively inform patients about costs for planned procedures and provide accessible customer service for billing inquiries.
Our dedicated team is standing by to help hospitals navigate hospital price transparency regulations. Delaying action can lead to regulatory enforcement, including fines. Contact us to schedule a meeting and take the first step toward compliance.
Would you like to learn more about this topic? Here are three articles we suggest:
5 Reasons Why Home-Grown Hospital Price Transparency Solutions Fail
Cost Management in Healthcare: Keys to Better Margins
Ready or Not: Hospital Price Transparency Rules Are Here
