| The Centers for Medicare & Medicaid Services (CMS) has issued “Updated Hospital Price Transparency Guidance” (May 22, 2025) which outlines new policies pursuant to Executive Order 14221, “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information.” CMS aims to ensure hospitals submit accurate, actionable pricing information as a result of strengthened monitoring and enforcement.
This update enforces more rigorous transparency in hospital pricing by requiring real, calculable dollar amounts instead of placeholders. The goal is to empower consumers and stakeholders with accessible, standardized, and meaningful healthcare cost information, thereby enhancing competition and accountability in the healthcare system.
Key Points of the Update:
- Mandates that the Departments of Treasury, Labor, and HHS require:
- Disclosure of actual prices (not estimates)
- Standardized, comparable pricing across hospitals and health plans
New CMS Guidance Highlights:
- Dollar Amounts Required: Hospitals must encode standard charges as actual dollar amounts wherever possible, especially for:
- Negotiated case rates, per diems, and fee schedules.
- Discontinuation of “999999999” Placeholders:
- Hospitals should no longer use “999999999” for the “estimated allowed amount” field. CMS noted they have observed excessive use of placeholder values in hospital data.
- Instead, they must calculate and provide real average dollar amounts based on claims data.
- Estimated Allowed Amount:
- Defined as the average amount received from payers in the past 12 months.
- Hospitals must:
- Use electronic remittance advice (ERA) data to calculate this.
- Provide estimates even if services weren’t rendered during the past year, with explanatory notes.
We recommend hospitals conduct reviews to validate compliance with the price transparency requirements, including the updated guidance.
Press Release: https://www.cms.gov/newsroom/press-releases/departments-labor-health-and-human-services-treasury-announce-move-strengthen-healthcare-price
Updated Guidance: https://www.cms.gov/files/document/updated-hpt-guidance-encoding-allowed-amounts.pdf
CMS Hospital Price Transparency Resources: https://www.cms.gov/priorities/key-initiatives/hospital-price-transparency
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