Stay Ahead of CMS’ 2025 Price Transparency Crackdown: Key Things to Know

As the Centers for Medicare & Medicaid Services (CMS) intensifies its push for greater transparency in healthcare pricing, providers nationwide are facing increased scrutiny and more stringent compliance demands under the guise of “Hospital Price Transparency.” In 2025, CMS introduced a series of updates to the Hospital Price Transparency Rule, building upon the foundational changes implemented in 2024 to standardize data formatting requirements. These latest revisions were coupled with a dramatic increase in agency enforcement activity.
As a result, providers should carefully review their price transparency files to ensure compliance with CMS’ latest data element requirements. Effective Jan. 1, 2025, hospitals are required to include four new data elements in their machine-readable files intended to support more comprehensive, accurate, and accessible reporting of hospital charges. Below is a summary of the new requirements along with practical tips for successful implementation.

Estimated Allowed Amount
Hospitals must now include an “estimated allowed amount” for any standard charge that is expressed as a percentage or calculated via algorithm. This figure should represent the average historical payment received from third-party payers for the specified item or service.

• Estimated Allowed Amount
Hospitals must now include an “estimated allowed amount” for any standard charge that is expressed as a percentage or calculated via algorithm. This figure should represent the average historical payment received from third-party payers for the specified item or service.
o Data Source Guidance: While CMS does not prescribe a single data source, it recommends using electronic remittance advice as a reliable reference point for calculating the estimate.
o Handling Insufficient Data: If a hospital lacks sufficient claims history for a particular item or service, CMS advises entering the placeholder value 999999999 to indicate that an estimate cannot be determined.
o Tip: Hospitals should proactively evaluate their historical claims data now and identify gaps to avoid last-minute estimations or placeholder entries.

• Drug Unit and Type of Measurement
For drugs with a standard charge, providers must now encode:
o Drug Unit of Measurement (e.g., 50)
o Drug Type of Measurement (e.g., ME for milligram equivalents)
Both values are required when reporting drug pricing, and CMS emphasizes adherence to abbreviation standards from the National Drug Code (NDC) or the National Council for Prescription Drug Programs (NCPDP).
o Tip: Conduct a review of all listed drug charges to ensure alignment with NDC/NCPDP standards and confirm that both the unit and type of measurement              are accurately paired.

• Modifiers
Hospitals must also report any modifiers that could influence or adjust the standard charge for an item or service. Modifiers often reflect changes based on circumstances, such as service delivery setting, provider qualifications, or procedural complexities.
o Tip: Coordinate with your billing and coding teams to identify all commonly-used modifiers and ensure they are accurately reflected in the                                          machine-readable file.
The changes reflect CMS’ continued effort to eliminate regulatory ambiguities and ensure consistent, accurate pricing disclosures from providers. Hospitals should carefully review CMS’ guidance and confer with experienced counsel to ensure compliance with the Hospital Price Transparency Rules.

“Stay Ahead of CMS’ 2025 Price Transparency Crackdown: Key Things to Know”

Louisiana Hospital Association Impact Law Brief, Vol. 40, No. 6. June/July 2025

Written by  Heather Arrington