New CMS Guidance Continues Focus on Price Transparency

On May 22, 2025, CMS issued updated price transparency guidance following the Trump Administration’s February 2025 Executive Order directing federal agencies to require the disclosure of actual prices of items and services instead of estimates and continue efforts to standardize pricing data across hospitals and health plans.

The guidance requires that hospitals display payer-specific standard charges as a dollar amount in Machine Readable Files (“MRFs”) whenever it is possible to calculate the amount.  In circumstances where the negotiated payer-specific standard charge is a percentage of a fee schedule, CMS expects the hospital to calculate and encode a payer-specific negotiated charge as a dollar amount.

In early 2025, CMS conducted a review of a sample of MRFs and determined that hospitals were encoding nine 9s instead of specific dollar amounts much more frequently than expected.  CMS now requires greater detail regarding the estimated allowed amount in the MRF by directing hospitals to cease encoding nine 9s for the estimated allowed amount data element.  Instead, when calculating the estimated allowed amount, hospitals should encode the average dollar amount the hospital has received for an item or service within the twelve months prior to posting the file.  If there is not twelve months of historical data, hospitals should calculate the average dollar amount the hospital has received for the portion of the twelve months that the hospital has this data.  In instances where there is no historical data, hospitals should encode a dollar value based on the hospital’s expectation of what the charge would be for that item or service and include an explanation in the notes that there were zero instances of the item or service in the 12 months prior to posting the file.  

CMS issued a request for information seeking public input on how to improve compliance and enforcement processes related to transparent reporting of pricing data by hospitals.  Comments are due to CMS by July 21, 2025. 

We recommend that hospitals review and update their MRFs to comply with the new guidance and continue to monitor future guidance and regulations issued by CMS related to price transparency.