Trump was never going to tank his own idea. Today we got confirmation.
In 2019, he pushed through the first price transparency Executive Order, which established the Hospital Price Transparency Rule & Transparency in Coverage. It’s no surprise that today he signed a new Executive Order on Pricing Transparency. TL;DR he's doubling down and wants price transparency efforts to dramatically accelerate.
Price transparency is one of the few bipartisan things left in Washington. Whether you are Right or Left on healthcare, we all need to know what it costs. Trump’s Executive Order is a shot across the bow that price transparency’s progress over the last 4 years won’t be lost, but accelerated. Here’s the rundown on what you need to know.
It’s all about Section 3
Here Trump lays out that his administration has 90 days to enforce the following:
What it means to require actual prices, not estimates
This radical transparency has been at the heart of the regulations since 2021. There’s just one problem: real healthcare costs require the bundling of numerous codes to understand how much something will cost. For example, if you get a knee replacement (DRG 470), someone better knock you out (CPT 01402). Behind the scenes, multiple full-time employees, across different organizations, time, and space have to manually and accurately bundle and code that single encounter. To clearly tell a patient how much their knee replacement will cost, you need price transparency data, claims data, and an entirely new, radically simplified healthcare transaction.
While we celebrate this sort of bold transparency, bold ideas require bold execution. We look forward to building the infrastructure for more efficient transactions in healthcare—the kind built entirely around the patient.
What it means to issue updated guidance on standardization
CMS made comparing hospital and payer rates easier by requiring hospitals to post in a standardized format, similar to the payers, on 7/1/24. To make this easier, we created something called a Validated Rate, when a payer and hospital both report the same rate (within 3% margin of error) for a procedure. This is how we can begin to think of healthcare pricing data as a unified source of truth on the cost of care in the US–when rates across datasets match. Further action by CMS to leverage both files to check accuracy is welcomed.
What it means to double down on enforcement policies
Finally, there’s the confusion over CMS’ enforcement of both hospital and payer MRFs. There’s a common misconception that CMS does both, but payer MRFs are enforced by the state. Trump’s Executive Order lays out the groundwork for CMS to potentially assume this responsibility and deliver the first warnings to payers since Transparency in Coverage launched in 2022.
Where’s the proof this works?
There is a persistent hunger to have proof that price transparency is having an impact. We’re no stranger to trying to answer this question ourselves–in fact, we’ve tried many times. So imagine our delight when we realized our findings were cited not once but twice in the Executive Order. Our market analysis on the 10 largest metros, where we found the most expensive provider prices have gone down by 6.3% on average since 2021 and our employer saving study on 27% potential savings were both added to the Executive Order to quantify the impact of price transparency.
Keep an eye on our blog over the coming weeks as we continue to create more resources for federal and state agencies and Congress.