CMS’s latest transparency rule aims to make price estimates more specific

Hospitals face additional and potentially more demanding price transparency reporting requirements in 2026, as finalized in new CMS regulations.

The final rule for hospital outpatient departments and ambulatory surgical centers includes provisions building off the current transparency regulations. The new language is intended to ensure that hospitals “provide meaningful, accurate information about the amount they charge for healthcare items and services,” CMS wrote in a fact sheet.

Relative to the proposed rule issued in July, a notable change is that hospitals will receive a grace period to implement the new requirements. While compliance technically is mandatory by Jan. 1, CMS will delay enforcing the changes until April 1.

More specificity required in MRFs

Key 2026 changes to machine-readable files (MRFs) include replacing estimated allowed amounts as the listed element when payer-specific negotiated charges are expressed as a percentage or an algorithm. Instead, the hospital must convey the median allowed amount and the 10^th and 90^th percentile allowed amounts.

The rule thus phases out estimated allowed amounts only one year after CMS added them as an MRF component.

“Maybe previously we as an industry looked at these machine-readable files kind of in a separate universe than we looked at our ability to create accurate upfront estimates for patients,” said Carol Skenes, chief of staff with Turquoise Health. “I think what a lot of this is saying, high-level, is CMS is wanting us to converge towards the ability to do both using the data from machine-readable files to power these upfront patient estimates.”

CMS thinks hospitals should be able to express prices as a dollar amount whenever they are based on case rates, per diems or known fee schedules. Some negotiated charges may require the hospital to encode the base rate as a dollar amount while also:

• Listing the percentage or algorithm that modifies the rate
• Filling in the new fields for the allowed amounts

In addition, “Should the calculated median fall between two observed allowed amounts, the median allowed amount is the next highest observed value,” CMS clarified in the final rule.

Some hospitals expressed concern about that detail, saying it’s a “deviation from the standard way of calculating a percentile when it falls between two observed values” and “would require hospitals to implement custom formulas for these calculations rather than the ‘out-of-the-box’ formulas, increasing hospital burden.”

Mechanics of the new mandates

A new element that could take some work is the requirement to include a count of the number of claims that factored into a hospital’s median allowed amount and the two percentile amounts for an item or service.

CMS is expected to provide additional information on that requirement through the agency’s dedicated GitHub platform and other resources. The claims count won’t be required whenever the price can be listed as simply a dollar figure.

The burden “will vary from hospital to hospital based on the way their contracts are structured,” Skenes said.

In computing the relevant allowed amounts, the lookback period now is 12 to 15 months. CMS said timely-filing restrictions vary by state and payer but typically do not extend past 12 months.

The mandatory data source for determining the values is 835 electronic remittance advice (ERA) files or an equivalent set of remittance data. The allowance of equivalent sources is an adjustment for scenarios where ERAs are derived manually, but the leeway also can come in handy for technologically advanced hospitals, Skenes said.

“Oftentimes there will be some sort of a claims feed into the hospital’s EHR, and it may be easier to just pull the data from the report off of that feed,” she said. “So then you’re not directly pulling from that source 835 data, you’re pulling from a system that’s already processing that data.”

Requiring stronger verification processes

Stricter attestation requirements for the MRF include stating that prices are expressed as dollars wherever possible, and that in instances when such expression is not possible, the MRF contains “all necessary information available to the hospital for the public to be able to derive a dollar amount, including, but not limited to, the specific fee schedule or components referenced in such percentage, algorithm or formula.”

One change from the proposed rule is the decision to retain the phrase “to the best of its [the hospital’s] knowledge and belief” as a qualifier in the attestation. CMS had planned to excise that language but was persuaded by stakeholder comments that aspects of providing price information are outside the control of hospitals.

The qualifier represents an acknowledgement that “hospitals cannot be held responsible for information they did not and could not reasonably know at the time of attestation or thereafter,” said Shawn Stack, director of perspectives and analysis with HFMA.

The MRF also must indicate the name of the hospital’s CEO or other senior official responsible for overseeing the accuracy and completeness of the data. That element was one HFMA had “strongly opposed given the rise in threats and violence targeting healthcare leaders,” Stack said.

Starting Jan. 1, hospitals that violate the price transparency requirements can reduce the amount of their penalty by 35% by waiving their right to a hearing before an administrative law judge. CMS can withhold that option if the violation is for failing to make public either the MRF or prices for shoppable services.

Getting transparency rules in sync

As part of an effort to improve the comparability of data across hospital and health plan price transparency files, CMS is requiring hospital MRFs to include Type 2 national provider identifiers (NPIs), specifically any active code associated with primary tax codes 27 (indicating hospital unit) and 28 (indicating hospital). Hospitals will not be compliant if they use other identifiers such as employer identification numbers.

The new requirement indicates CMS’s intent to make price comparisons more seamless among the hospital MRFs and the health plan transparency files. In the latter set, payer rates are linked to organizational NPIs.

At a time when CMS also is expected to make a push to implement advanced explanations of benefits for insured patients as stipulated in the No Surprises Act (NSA), the effort to improve cohesiveness between hospital and health plan MRFs speaks to a broader transparency vision.

“We are moving out of the world of where each of these rules and laws kind of exists in a vacuum and more [to] where we are better equipped to utilize the best data that’s coming from all of these different data sources — to broaden [NSA] good-faith estimates to include co-providers alongside convening providers and then ultimately take them all the way to understanding patient cost-sharing and being able to fulfill an advanced explanation of benefits,” Skenes said.