CMS Issues New Guidance and Request for Information on Hospital Price Transparency Regulations

Last week, CMS published new guidance and issued a Request for Information on the Hospital Price Transparency Rule in response to President Trump’s February 25, 2025 Executive Order titled, “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information.” (The Executive Order is discussed in greater detail in the March 3, 2025 edition of Health Headlines). CMS’s guidance provides updated instructions to hospitals on how to calculate the “estimated allowed amount,” a newer data element established in the FY 2024 Outpatient Prospective Payment System Final Rule. (The changes to the hospital price transparency regulations stemming from the FY 2024 Final Rule are discussed in greater detail in the November 6, 2023 edition of Health Headlines). The Request for Information seeks to gather feedback on how to boost hospital compliance and enforcement and ensure data shared is accurate and complete.

Updated Guidance

CMS’s guidance reminds hospitals that they must encode a standard charge dollar amount in the machine-readable file if it can be calculated, including the amount negotiated for the item or service, the base rate negotiated for a service package, and a dollar amount if the standard charge is based on a percentage of a known fee schedule. The guidance also refers hospitals to the CMS HPT – Data Dictionary GitHub Repository for examples of how to encode standard charge data.

Additionally, CMS’s guidance provides undated instructions on how to calculate the “estimated allowed amount,” which is the “average dollar amount that the hospital has historically received from a third-party payer for an item or service” when the standard charge is expressed as a percentage or algorithm. Because there are infrequent scenarios where a hospital has limited historical claims to derive the estimated allowed amount, CMS has previously recommended that hospitals facing such scenarios encode “999999999” in the data element value to indicate that the hospital does not have sufficient reimbursement history to derive the estimated allowed amount. CMS’s new guidance, however, informs hospitals to discontinue the use of “999999999.”

In calculating the “estimated allowed amount,” hospitals should instead encode the average dollar amount the hospital has received for an item or service, derived from electronic remittance advice transaction data using data from items or services rendered within the 12 months prior to posting the file. CMS provides the following scenario to illustrate its guidance:

1. If the currently negotiated percentage or algorithm was only used for a portion of the 12- month time period prior to posting the file, the hospital should encode the average dollar amount from the electronic remittance advice transactions for only the portion of time that the percentage or algorithm was used.
2. If an item or service that is negotiated as a percentage or algorithm was used or performed one or more times within the 12-month time period prior to posting the file, the hospital should encode the average of those charges derived from electronic remittance advice transaction data as the “estimated allowed amount,” and remark in the “notes” data element that there was “one or more instances of the item or service in the 12 months prior to posting the file.”
3. If an item or service that is negotiated as a percentage or algorithm was not used within the 12-month time period prior to posting the file, the hospital should encode a value in dollars and cents related to their expectation of what the charge would be for that item or service, and remark in the “notes” data element that there were “zero instances of the item or service in the 12 months prior to posting the file.”

Request for Information

The Request for Information seeks “public input to identify challenges and improve compliance and enforcement processes related to the transparent reporting of complete, accurate, and meaningful pricing data by hospitals.” Specifically, CMS is seeking comments on the following questions:

1. Should CMS specifically define the terms “accuracy of data” and “completeness of data” in the context of HPT requirements, and, if yes, then how?
2. What are your concerns about the accuracy and completeness of the HPT MRF data? Please be as specific as possible.
3. Do concerns about accuracy and completeness of the MRF data affect your ability to use hospital pricing information effectively? For example, are there additional data elements that could be added, or others modified, to improve your ability to use the data? Please provide examples.
4. Are there external sources of information that may be leveraged to evaluate the accuracy and completeness of the data in the MRF? If so, please identify those sources and how they can be used.
5. What specific suggestions do you have for improving the HPT compliance and enforcement processes to ensure that the hospital pricing data is accurate, complete, and meaningful? For example, are there any changes that CMS should consider making to the CMS validator tool, which is available to hospitals to help ensure they are complying with HPT requirements, so as to improve accuracy and completeness?
6. Do you have any other suggestions for CMS to help improve the overall quality of the MRF data?

Responses can only be submitted using CMS’s online form and must be submitted by 11:59 P.M. ET on July 21, 2025.