Healthcare leaders have recentered their focus on meeting federal price transparency regulations–and for good reason. Hospitals face changing regulations, stiff penalties, and data demands that they may not be equipped to handle alone.
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Hospital leaders are renewing their focus on price transparency due to the latest guidance from the Centers for Medicare and Medicaid Services (CMS).
On May 22, 2025, CMS published updated directives:
· Hospitals must encode actual dollar amounts for payer-specific negotiated charges when such values can be calculated.
· Hospitals to discontinue encoding “999999999” in the estimated allowed amount field and instead provide an actual dollar value.
· Estimated amounts must be derived from the past 12 months of 835 remittance data (when available) or populated using a reasonable expected reimbursement (when claims transactions are unavailable).
CMS also seeks public comment on the CMS Hospital Price Transparency Accuracy and Completeness Request for Information, due by July 21, 2025, to identify challenges and improve compliance and enforcement processes. While CMS has not announced an effective date as of this publication, enforcement activity continues to increase.
Meanwhile, hospitals must act—even if they've already posted files.
This latest guidance comes just three months after President Trump signed an Executive Order to "put patients first by requiring hospitals and health plans to deliver meaningful price information to the American people."
Indeed, the Executive Order, Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information, builds on previous price transparency initiatives introduced during the first Trump administration in 2019.
What do these requirements mean for hospitals? More importantly, what does it take to comply?
The latest wave of hospital price transparency rules took effect in January 2025 when hospitals were required to address the following:
Hospitals feel more pressure to comply now than ever before. CMS has ramped up enforcement—introducing steeper non-compliance penalties and fines that accrue until issues are resolved, and more frequent audits.
The most common violations include "Missing or Incorrect TXT File Placement," which must be placed in the root folder of each hospital’s website. Hospitals also commonly fail to include compliant footer links that must connect directly to the MRF download instead of a landing page or website subpage.
In addition, hospitals struggle with data conversions to comply with the price transparency mandates. Massive file sizes, unique template requirements, and inconsistent payer data make it difficult for hospitals to convert and translate pricing data into CMS-required formats.
Meanwhile, health systems are facing numerous challenges hindering their efforts to meet federal regulatory requirements, including:
· Staff are often stretched thin while facing conflicting priorities.
· Budget constraints make it tough to hire staff focused solely on compliance.
· Many hospitals simply cannot support price transparency changes.
To overcome these challenges, hospitals can adopt these Health Catalyst solutions to stay on the right side of federal rules and avoid penalties:
Hospital Price Index: This tool utilizes reimbursement data derived from payer contracts in combination with hospital charges to produce two files: 1) a compliant machine-readable file (MRF) hosted on Vitalware servers and 2) a shoppable file of the top items and services provided at your hospital.
PowerCosting: This solution uses activity-based costing models to deliver precise, actionable insights, such as time spent with a patient and overhead costs. PowerCosting, which leverages the robust capabilities of the Health Catalyst Ignite™ Data & Analytics platform, enables hospitals to determine the actual cost of providing patient care from start to finish.
VitalCDM: To effectively manage charge description master (CDM) data and related files, this all-in-one application manages CDM across the entire healthcare ecosystem. It has an embedded workflow for easy tracking and management.
The solutions also generate a TXT file for the hospital's root directory, validating it through the CMS system and ensuring it is audit-ready. The applications enable customizable options, such as disclaimers or profiles.
Health Catalyst delivers expert services and solutions that transform complicated payer contracts into clean, compliant, machine-readable files that align with CMS standards. Our team in healthcare finance and revenue cycle management can work closely with you to enhance your investment for both short- and long-term improvements.
As regulations around hospital price transparency evolve, our solutions quickly adjust to incorporate these changes, keeping files up to date and compliant.
"While the future of hospital price transparency regulations remains uncertain, our technology ensures hospitals are well-prepared. Our approach aims to eliminate confusion or guesswork surrounding healthcare pricing rules and simplify compliance for hospitals." – Jennifer Bishop, VP of Product Content, Health Catalyst
You're not alone in the hospital price transparency maze. Our dedicated team is standing by to help hospitals navigate federal regulations. Delaying action can lead to regulatory enforcement, including fines. Contact us to schedule a meeting and take the first step toward compliance.
