A CMS price transparency rule imposed requirements on hospitals to publicize their pricing data. The rule lays out how hospitals can achieve price transparency in a regulatory sense, which is important as CMS amps up enforcement of the rule's requirements. However, hospital price transparency also needs to go beyond regulatory compliance so consumers can truly shop for care.
Hospitals have a long journey to price transparency, considering lackluster regulatory compliance rates, according to several reports and trackers. Most hospitals are not fully compliant with the overall CMS price transparency rule, with many missing the part of many of the technical aspects of the rule. Fully complying with the rule's requirements, though, is key to avoiding enforcement actions, such as civil monetary penalties.
Additionally, hospitals have to think about how their patients and potential consumers view their pricing data, whether it is the machine-readable file (MRF) required by law or a more consumer-friendly approach to price transparency.
This article, the last in a two-part series on price transparency in healthcare, identifies ways to achieve regulatory compliance with the CMS rule and ways to go beyond to provide consumers with pricing data they can actually understand and use.
Tips for technical price transparency compliance
The CMS price transparency rule's requirements for hospitals have undergone several iterations since the rule went into effect in 2021. Many of the changes that went into effect at the start of 2025 involved technical aspects of posting pricing data in the MRF. However, these requirements are trickier to comply with than they may seem, according to Joe Wisniewski, assistant vice president of channel partnerships at Turquoise Health.
For example, hospitals must not post estimated allowed amounts, or the average dollar amount a hospital has historically received from a third-party payer. To do this, hospitals will need to parse through their 835 and 837 files to find the prices.
"Now, if that charge is based on a percentage or an algorithm, you still have to have that machine-readable file that specifies the estimated allowed amount for that item or service," Wisniewski said. "There's a lot of confusion on whether or not you do estimate the allowed amount, and it does require a lot of work."
"What that translates to for revenue cycle and another in a leadership role in compliance is that when you're asking your team to do this, you're going to want to put a bit of a buffer time to mine and find that data at scale," he continued.
That level of work to meet this new requirement even applies to hospitals that use a vendor for compliance with the CMS price transparency rule. Vendors will also need all the 835 and 837 file data for at least the last six months, although 12 months may be more helpful, according to Wisniewski.
Hospitals will similarly have to examine their payer contracts and claims data to comply with two other changes to CMS price transparency compliance: drug pricing information and modifiers.
"These requirements have snuck up on folks, especially compared to the [July 1, 2024] requirements, which were more about posting the machine-readable file in a v1 schema format," Wisniewski said.
CMS provides resources on its website to help hospitals comply with some of these more technical requirements, added Ilaria Santangelo, director of research at PatientRightsAdvocate.org. The agency offers webinars explaining how to post MRFs, a standard schema template hospitals can use to create their MRFs and even a validator tool to verify compliance.
However, Santangelo warned that the validator tool is more of a "bare-bones check" to verify that hospitals are posting data in the correct standard format. It is a good first-pass check, but PatientRightsAdvocate.org found that over 500 of the 2,000 hospitals it studied as part of its annual report didn't pass the validator tool.
Don't wait to ensure compliance
"For a hospital leader, this is definitely something that is tempting to wait until the last minute," Wisniewski stated. "It is tempting when you are fighting 15 fires."
Hospitals, after all, have a lot on their compliance plates. Compliance means a lot more than hospital price transparency requirements from CMS. Hospitals must always be diligent about cybersecurity threats and HIPAA, to name just a couple of very high-priority compliance areas.
"But this is one of those slow-growing fires that can sneak up on you," Wisniewski warned.
This is one of those slow-growing fires that can sneak up on you.
Joe WisniewskiAssistant vice president of channel partnerships at Turquoise Health
Hospitals have more to consider as CMS rolls out new requirements. In 2021, a head of compliance or perhaps the chief financial officer, if it is a small hospital, could delegate someone to make the MRF, and they could check off the price transparency compliance box. However, the industry is "shifting to a world where this becomes a part of a hospital's day-to-day workflow," Wisniewski said.
"It's really critical to be focused on bringing in other members of the leadership team, whether it's market analysis for data or contract management, in addition to the person building the MRFs," he advised. "Having those three groups together in one room is going to be really critical now versus 2021 through most of 2023. Then, it wasn't really something most people were thinking about when it came to price transparency."
Just because CMS has not warned or fined a hospital for noncompliance doesn't mean their pricing data is up to snuff. Santangelo has known hospital executives who do not even know what their pricing file looks like.
"They've never looked at it because vendors are creating it for them," she explained. Not that vendors cannot be trusted to create a compliant MRF, but new iterations of hospital price transparency requirements may mean providers have missed new standards.
"It's a completely different ballgame when it comes to what they need to be posting in these files," she continued. "Furthermore, we're four years in and CMS has only fined 17 hospitals for noncompliance when we're finding that only 21% of hospitals are complying."
Beyond technical price transparency compliance
Hospitals should also consider their payer contracts -- how they are organized, where the data lives and how the data can be used for compliance.
"You've got to organize your contracts to a way higher degree than ever before," Wisniewski stated. "Hospitals used to be able to throw the data into the MRF and kind of put it in whatever format as long as it's CSV or JSO and it has certain rates. All done. Now, you've got to dig into your contracts and get all this nuanced data. You should actually think about how your contracts are managed."
Exploring contract management practices within the organization may reveal some gaps hospital leaders may not even know about. For example, contract naming conventions may not be top of mind for hospital leaders, but a breakdown could make it very difficult for them to find the modifiers needed from the new price transparency requirements.
Another common revelation, according to Wisniewski, is outdated contract matrices. Outdated information leads to errors, so hospital leaders should be asking themselves: How do I automate that metric? How do I make it more efficient to track information for contract negotiations?
"So, we're moving out of this world of transparency being a check-the-box exercise and more into a world where it's transforming how you operate internally," he added. "It's why I'd advocate for any healthcare leader who cares about this to create that informal or even formal committee within your healthcare hospital leadership to embrace this change rather than run away from it."
Making price transparency consumer-friendly
Hospitals are stuck in a hard place when it comes to price transparency. Not only is compliance with CMS requirements difficult, but consumers also have a different idea of what price transparency in healthcare is.
"There's a high degree of nuance because you have a lot of hospitals stuck between the court of public opinion and what the public expects from price transparency, then what Uncle Sam and CMS are actually sending warning letters on," Wisniewski said. "They're stuck in a rough place because they have to figure out a way to navigate both."
Wisniewski suggested that hospitals have open lines of communication -- a phone number, an email and a customer service element, specifically -- to ensure a consumer-friendly environment. Consumers should be able to discuss costs with a billing expert before and after an encounter, especially as patient financial responsibility grows.
Having access to actual dollars and cents pricing upfront allows healthcare consumers to make the best decisions for their health and wealth.
Ilaria SantangeloDirector of research at PatientRightsAdvocateorg
Compliance with the No Surprises Act's good faith estimate requirement also helps here. The law requires hospitals to provide this good faith estimate of what they may charge an uninsured or self-pay patient. Hospitals must provide this cost estimate prior to service and patients can challenge the hospital's actual costs if it is substantially over the expected charges.
However, good faith estimates can go beyond compliance to provide more consumer-friendly price transparency.
"I've even had some hospitals go above and beyond with good faith estimates and basically give them out to anyone who asks for it, even if they're paying with insurance, which I thought was interesting, they're not required to do that," Wisniewski explained. "But in some competitive markets, I have health systems just saying their patients love it when they make a receipt ahead of healthcare, even if they're using United or Cigna. That's another example of going above and beyond."
While Santangelo also stressed that MRFs are not consumer-friendly tools for price transparency, she said those files still need to provide actual dollar amounts for items and services despite evolving requirements that allow for pricing percentages and algorithms instead of a numerical value.
"Having access to actual dollars and cents pricing upfront allows healthcare consumers to make the best decisions for their health and wealth," Santangelo stated. "It allows them to shop for the best quality of care at prices they know they can afford."
Many hospitals aren't delivering this level of pricing data, according to a new measure in PatientRightsAdvocate.org's latest report. Only about 17% of hospitals reviewed in the report were found to be sufficient in their disclosure of dollars-and-cents prices. Meanwhile, just about 7% of hospitals in the report were found to be fully complying and posting dollars-and-cents pricing data.
"We're just trying to make this data accessible to everyone, which was the original intent of the hospital price transparency regulation," Santangelo said.
Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.
