CMS Provides New Price Transparency Guidance

On May 22^nd, 2025, the Centers for Medicare and Medicaid Services issued guidance [1]to support the Executive Order (EO) “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information,” [2] issued February 25, 2025.  While the guidance is brief, it centers around the use of average charges, which are used to calculate the payer-specific rates. It does not address the use of estimates as discussed in the EO. There may be future updates on the use of estimates in lieu of the shoppable services. The update is also unclear on the timing. It can be interpreted in different ways. This can be seen as a clarification of an existing requirement.  A current Machine-Readable File (MRF) that does not comply with the guidance is out of compliance.  It can also be interpreted as guidance for annual updates or to be put in place at the next annual update.  I tend to think it is the former and not the latter. We shall see.

The “estimated allowed amount” is defined as “the average dollar amount that the hospital has historically received from a third-party payer for an item or service”. The “amount received from a third-party payer” may not represent the value of the service or the total amount that the hospital may receive in remuneration. The total value, or the “allowable,” includes both the payer’s and the patient’s responsibility. Should we assume that the new guidance requires the total allowable rather than the “the average dollar amount that the hospital has historically received from a third-party payer for an item or service”? In the remittance advice (ANSI 835), these would be a total of CLP 04 and CLP 05.  I think this is just a poor description.

The guidance uses the word “scenario” to convey what could be described as specific requirements. In the instances where a negotiated rate is based on an algorithm, such as a percentage of charge, providers were directed to use average charges. In previous guidance, providers used a series of the number 9 in fields in the MRF when no average charges were available. In the new guidance, providers are to use “average dollar amount that the hospital has historically received from a third-party payer for an item or service,” even in instances where there is only one case. Where there is no volume to create an average charge, providers should use the “expectation of what the charge would be for that item or service”. There is no indication as to where the hospital is to get this expected charge. Maybe that will come in the next update to the guidance.

Another issue that is interesting about this guidance is the reliance on the use of ANSI 835 data for creating the “amount received from a third-party payer”. I am concerned that many hospitals will not have adequate analytical tools to use the remit data. This data includes multiple instances related to a single instance of care. When we have analyzed this data, we have found a ratio between two and up to nine of ANSI 835s (remit) to a single original ANAI 837 (claim).

Tips:

1. Review your current MRF for the use of “9”.
2. Look out for future updates as the current updated guidance does not change the annual update requirement. This leaves it unclear as to whether these potential changes are immediate or for future updates.
3. If you have made any changes to your MRF, run the updated file through the Hospital Price Transparency Validator Tool[3] before posting updates.

We are currently reviewing our customers’ MRFs for compliance with this new guidance. If you have any questions, comments, or need assistance reviewing your MRFs, please reach out to me at seth.avery@centaurihs.com.

Seth Avery, J.D., CPA
Sr. Vice President, Business Development
Centauri Health Solutions, Inc.