Overview
On May 22, 2025, the Centers for Medicare & Medicaid Services (CMS) released new guidance for compliance with the hospital price transparency rule and published a request for information (RFI) seeking ways to bolster hospital compliance with the rule. The guidance and RFI suggest that the second Trump administration remains focused on ensuring that hospitals comprehensively and accurately disclose their prices.
In Depth
BACKGROUND
The rule was first promulgated under the prior Trump administration and remained in place with modifications throughout the Biden administration. It requires hospitals to publicly disclose their “standard charges” in a “machine readable file” (MRF). Negotiated rates with third-party payers are considered one type of “standard charge.”
Effective July 1, 2024, the Biden administration supplemented the Trump regulation to require hospitals to disclose an “estimated allowed amount” in cases where the hospital had negotiated a third-party payer rate based on a percentage or algorithm. The estimated allowed amount was defined as the average dollar amount that the hospital had historically received from the third-party payer. CMS recommended that hospitals encode nine 9s (999999999) in cases where there were insufficient historic claims to derive an estimated allowed amount.
THE EXECUTIVE ORDER
On May 22, 2025, President Trump issued Executive Order 14221, “Making America Healthy Again by Empowering Patients with Clear, Accurate and Actionable Healthcare Pricing Information.” The executive order directed the US Department of Health and Human Services to issue guidance ensuring that pricing information is standardized and easily comparable across hospitals and to update enforcement policies to ensure hospital compliance.
THE GUIDANCE
CMS issued the guidance concurrently with the executive order. The guidance observed that hospitals were encoding nine 9s much more frequently than expected. CMS found that more than 90% of estimated allowed amounts listed by a sample of hospitals encoded nine 9s. The guidance instructed that nine 9s were no longer acceptable for items or services. It also stated that hospitals must calculate the estimated allowed amount based on the average charge over the prior 12-month period as long as there was at least one charge during that period. If an item or service was not charged during the period, the hospital must encode a value of its expectation of what the charge would be for that item or service. The guidance directs hospitals to note that there were zero instances of the item or service in the 12 months prior to posting the file.
THE REQUEST FOR INFORMATION
CMS also issued an RFI concurrently with the executive order and guidance. The RFI noted that CMS had received comments from the public and stakeholders regarding its assessment of the accuracy and completeness of the charge information displayed by hospitals. The RFI solicited public comments responding to the following questions to inform CMS program planning and decision making:
- Should CMS specifically define the terms “accuracy of data” and “completeness of data” in the context of hospital price transparency requirements, and, if yes, then how?
- What are your concerns about the accuracy and completeness of the hospital price transparency MRF data? Please be as specific as possible.
- 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.
- 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.
- What specific suggestions do you have for improving the hospital price transparency 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 hospital price transparency requirements, so as to improve accuracy and completeness?
- Do you have any other suggestions for CMS to help improve the overall quality of the hospital price transparency data?
Comments are due by 11:59 pm EDT on July 21, 2025.
ANALYSIS
The guidance and RFI signal a continued commitment from the Trump administration to enforcing hospital price transparency requirements. The updated guidance emphasizes standardization and data quality in hospital pricing disclosures – two areas likely to be focal points for future compliance monitoring and enforcement. Enforcement penalties can be significant: CMS may impose civil monetary penalties of up to $5,500 per day for noncompliance. CMS publicly lists hospitals that are noncompliant and have received penalty notices, adding reputational pressure to financial consequences. Please see our previous On the Subject for an in-depth discussion of enforcement penalties. Responding to audits and adverse audit findings may prove technical- and resource-heavy for affected hospitals.
Hospitals may find that listing estimated allowed amounts will require significant resources above and beyond the material investments made to date, including new data analytics capabilities and internal process adjustments. Calculating estimated allowed amounts in all cases may prove challenging for institutions with complex service offerings or legacy data systems.
CMS seeks input on how to define key terms, validate data, and structure enforcement. Stakeholders should consider submitting comments by the July 21, 2025, deadline to inform CMS of the potential implications of more expansive or exacting disclosure requirements.
