On February 25, 2025, President Trump issued an Executive Order titled “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information” (the 2025 Order). This directive is focused on significantly increasing governmental enforcement of price transparency regulations, creating heightened risks for hospitals and health plans, that fail to comply.[1]
What You Need to Know:
- The new Executive Order pertaining to price transparency in health care costs suggests an uptick in federal enforcement of regulations. The penalties for non-compliance can be substantial.
- Many hospitals and payors are out of compliance.
- Covered organizations should consider immediate and periodic review of compliance posture.
Background: The Evolution of Price Transparency Rules
The 2025 Order builds on and is intended to increase enforcement of a 2019 Executive Order issued during Trump’s prior administration, known as the “Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First” (the Price Transparency Order). According to HHS, the requirement for transparency is also rooted in the Affordable Care Act’s 2010 amendments to the Public Health Act, which required hospitals “to establish, update, and make public (in accordance with guidelines developed by the Secretary of Health and Human Services) a list of their standard charges for the items and services that they provide”.[2] The 2019 Order led to the establishment of the Hospital Price Transparency Rules, which require hospitals to maintain a consumer-friendly display of certain pricing information, publish a file with negotiated rates for all services provided, and require health plans to disclose negotiated rates with providers, out-of-network payments, and actual prices paid for prescription drugs, along with an online tool for consumers to access price information.[3]
It has been widely reported that healthcare pricing has been opaque, with negotiations between providers, insurers, and drug companies taking place behind closed doors. Many parties involved have resisted transparency efforts, arguing that confidentiality is necessary for maintaining competitive pricing. Some economic research suggests that transparency mandates could paradoxically lead to higher prices by reducing competitive leverage in negotiations. Nevertheless, this is a populist issue which has perceived legs given the attention paid to the issue during both Trump administrations and his criticism of the Biden administration’s failure to enforce the transparency requirements.
While there was significant non-compliance during the Biden administration, there was in fact some enforcement of the regulations, including issuance of hundreds of warning notices, Corrective Action Plans (CAPs) and administrative fines.[4] A 2024 Office of Inspector General (OIG) audit revealed significant non-compliance among hospitals, estimating that only 46 percent of the 5,879 hospitals that were required to comply were in fact doing so.[5] Hospitals complained of confusion, lack of resources, the inability to get technical assistance, and inadequate contractor availability and training as contributing impediments. In other cases, some hospitals have even attempted to circumvent compliance by embedding code in their websites to make pricing data difficult to find via search engines.
Civil monetary penalties for non-compliance range from $300 to $5,500 per day, depending on hospital capacity, with Center for Medicare and Medicaid Services (CMS) having fined 18 hospitals to date.
Key Risks of Non-Compliance
The 2025 Order ups the ante for enforcement and directs the Secretaries of the Departments of Treasury, Labor, and Health and Human Services to take "all necessary and appropriate action" to ensure compliance. This escalation in enforcement introduces significant legal and financial risks for healthcare organizations, including:
- Administrative Penalties – The CMS will ramp up enforcement, imposing fines that could escalate with repeated violations. Hospitals and insurers failing to meet transparency requirements can expect more aggressive audits and higher monetary penalties.
- Civil Enforcement Actions – The Department of Justice (DOJ) and state attorneys general could pursue civil litigation against non-compliant organizations, potentially resulting in lawsuits, injunctive relief, and financial settlements. Past enforcement trends suggest that major health systems could be targeted for high-profile legal actions.
- Potential Criminal Liability – While price transparency violations are typically addressed through corrective action or civil and administrative penalties, persistent and deliberate non-compliance, particularly if tied to fraudulent reporting or intent to mislead consumers, could lead to criminal investigations under federal fraud and the False Claims Act (FCA). Executives and compliance officers should be aware of heightened scrutiny regarding data accuracy and disclosure practices.
A notable aspect of the Order is its explicit rejection of price “estimates” in favor of disclosing actual prices, which may create tension with existing laws, such as the No Surprises Act, that rely on estimates for consumer protection. Additionally, the executive order may reinvigorate legislative efforts in Congress to codify price transparency rules into law.
Challenges and Industry Response
Hospital and insurance industry leaders have voiced concerns about the increased regulatory burden. Some groups argue that compliance levels are higher than reported, while others worry that stringent enforcement could divert resources from patient care or revenue-generating activities. Employers and consumer advocates, on the other hand, have welcomed the move, calling for stronger enforcement to ensure price transparency rules achieve their intended goals. However, concerns remain over the accuracy and completeness of pricing data hospitals post online. Some experts suggest better technological solutions, such as automated compliance assessment tools, to streamline enforcement.
A patient rights group called Patient Rights Advocate.org published a report, also in November 2024, which concluded that compliance was even worse and made several recommendations including increasing enforcement, prohibiting estimates in favor of actual prices, expanding the scope of the covered entities and others which appear to have resonated with the current administration.[6]
Despite years of implementation, price transparency has not yet led to the substantial reduction in healthcare costs that policymakers anticipated. Prices continue to rise, and researchers have observed wide variability in charges for the same services. The new executive order instructs federal agencies to explore new ways to expand enforcement, but meaningful reforms may require additional regulatory or legislative action. This is a recipe for aggressive enforcement.
Steps to Mitigate Risk
Given the increasing enforcement efforts, healthcare organizations should take proactive steps to mitigate non-compliance risks and potential liability:
- Conduct Internal Audits – Regularly assess pricing disclosures to ensure they meet federal and state transparency standards.
- Enhance Compliance Programs – Strengthen internal policies, training, and monitoring to identify and address transparency gaps.
- Engage Legal Counsel – Work with healthcare and government enforcement attorneys to stay informed on evolving regulations, enforcement actions, and litigation risks.
- Implement Robust Reporting Mechanisms – Utilize advanced data management tools to ensure pricing data is complete, accurate, and regularly updated.
Conclusion
The 2025 Executive Order represents a significant shift in federal enforcement of price transparency rules, exposing healthcare organizations to substantial administrative, civil, and potentially criminal penalties. Hospitals, insurers, and pan administrators should revisit and prioritize compliance efforts to avoid financial penalties, reputational damage, and legal action. Organizations should take immediate steps to review their compliance status, strengthen internal controls, stay abreast of emerging guidance and prepare for increased regulatory scrutiny.
[1] Executive Order No. 14221, 90 Fed. Reg. 11005 (2025).
[2] Department of Health and Human Services, Office of Audit Services Report A-07-22-06108, “Not All Selected Hospitals Complied With the Hospital Price Transparency Rule” (November 2024) at 2.
[3] Executive Order No. 13877, 84 Fed. Reg. 30849 (2019).
[4] See CMS Hospital Price Transparency Frequently Asked Questions, https://www.cms.gov/files/document/hospital-price-transparency-frequently-asked-questions.pdf , January 2025 (last visited February 28, 2025).
[5] Department of Health and Human Services, Office of Audit Services Report A-07-22-06108, “Not All Selected Hospitals Complied With the Hospital Price Transparency Rule” (November 2024).
