Staying ahead of price transparency regulations

Hospitals across the country have worked quickly in recent years to respond to federal price transparency rules requiring payer-specific rates to be publicly posted for all services. Now, new requirements proposed by the Centers for Medicare & Medicaid Services (CMS) could add further complexity to compliance, even as regulators intensify enforcement efforts. 

With expanded data disclosure requirements, stricter attestation standards, and a strategic 35% penalty reduction for hospitals that accept noncompliance determinations, CMS signals a more assertive enforcement strategy—one that could further complicate how hospitals manage compliance, public accountability, and relationships with payers.  

At its core, the proposed rule introduces new reporting requirements for hospitals that disclose estimated rates based on percentage-of-charges or algorithmic pricing arrangements. In these cases, hospitals would be required to publish the 10^th percentile, median, and 90th percentile allowed amounts for each service and payer, calculated using electronic remittance advice (ERA) data. While this approach aims to improve transparency around payment variability, it also adds technical and operational complexity for hospitals navigating compliance.  

Operationally, the proposed changes could impact hospitals unevenly. Providers that have already invested in the infrastructure to generate compliant machine-readable files (MRFs) may find the new requirements relatively straightforward: adding three percentile calculations to existing outputs.   

However, for others, the rule could accelerate the need to upgrade strained legacy data systems and governance frameworks, align revenue cycle and compliance teams, and prepare for more frequent audits. To date, a significant number of the civil monetary penalties issued have targeted smaller hospitals behind the curve on posting basic pricing information. 

Here’s a look at the key aspects of the proposed rule:

1. Percentile-based reporting
Earlier this year, CMS strengthened its requirements for how hospitals must post rates for certain codes. Under older rules, hospitals were allowed to use a placeholder code (nine 9s) for rates with low historical volume for a particular service with a payer. CMS suggested that the practice had been overused and as a result disallowed it.
 
Under the proposed rule, hospitals that disclose estimated rates based on percentage-of-charge or algorithmic pricing arrangements would be required to publish the 10^th percentile, median, and 90^th percentile allowed amounts for each service and payer. 
 
These figures must be derived from ERA data, specifically the electronic data interchange 835 transaction set, and accompanied by the count of allowed amounts used in the calculation. CMS’s intent is to improve transparency in cases where negotiated rates are not fixed dollar amounts, offering a clearer picture of payment variability.  

While the requirement does not apply to all services, it introduces new technical demands for hospitals with algorithm-based contracts, particularly those lacking standardized ERA data infrastructure or consistent methodologies for percentile calculation.  

2. Strengthened attestation requirements 
The proposed rule adds significantly more weight to the attestation requirement for hospitals. While current regulations require hospitals to affirm the accuracy and completeness of their MRFs, CMS now proposes that hospitals must attest to the inclusion of all applicable payer-specific negotiated charges that can be expressed in dollar terms. For rates that are not knowable in advance, hospitals must provide sufficient information for the public to derive the dollar amount.
  
Crucially, the attestation must include the name of a senior official—such as the CEO or a designated executive—who is responsible for overseeing the encoding of accurate and complete data. This shift underscores CMS’s intent to hold hospital leadership directly accountable, promoting price transparency from a compliance task to a full governance issue, and could force hospitals to rethink their current oversight of such publicly-posted rates.  

3. Strategic implications of the 35% penalty reduction 
CMS’s proposal to reduce civil monetary penalties by 35% for hospitals that accept noncompliance determinations and waive their right to a hearing reflects a strategic shift in enforcement posture. Rather than relying solely on prolonged adjudication, CMS appears intent on streamlining resolution and potentially increasing the volume of violation notices. In other words, the change is probably not about leniency—it’s about speed. The agency wants to resolve cases faster, reduce administrative burden, and discourage hospitals from contesting penalties.
 
With the new proposal incentivizing hospitals to settle, CMS could potentially ramp up enforcement without getting bogged down in appeals (in 2025 alone, more than 80 percent of the penalties issued as of August had been appealed). It’s a strategic move designed to reduce appeals and encourage hospitals to take a less defensive posture. 

For hospital executives, this change introduces a new calculus: accepting a penalty may be financially advantageous in the short term, but it also carries reputational and operational risks. Legal and compliance teams should evaluate whether contesting a determination aligns with broader governance priorities, and boards may need to reassess their risk tolerance in light of CMS’s more assertive stance. 

What’s more, this proposal suggests that CMS is preparing to issue more notices of violation. Even before CMS had proposed the new rules, the agency had already significantly ramped up enforcement actions in 2025, signaling a renewed focus on price transparency requirements as a new administration took the reins in Washington. This year, CMS is on track to set new highs on both the number of penalties issued as well as the total dollar amount, with 10 actions against hospitals still pending representing over $1 million. 

Recommendations for hospital leaders 

Organizations that start preparing now will be in a much stronger position if the new rules take effect. 

1. Assess your organization’s compliance: Hospitals that have already invested in the infrastructure to produce robust MRFs can benefit from reviewing those files to identify potential gaps in compliance with both current and proposed regulations. A thorough audit should verify that all required data elements are present, especially for services reimbursed through algorithmic or percentage-based arrangements. Ensuring accuracy and completeness now will reduce the risk of penalties later. Organizations that are still in the early stages of building out their MRFs should accelerate those efforts and deploy compliant files sooner rather than later amid the increasing scrutiny from regulators.

2. Perform a risk-benefit analysis: Faced with the potential choice between lower penalties or contesting violations, hospitals should prepare for the legal and reputational consequences of such decisions. This includes evaluating the potential for operational disruptions and long-term governance impacts.

3. Monitor payer price reporting on a regular basis: It’s now common for hospitals to routinely check payer-posted price transparency files as just one of several data points to help inform their conversations with payers. Leaders want to know how accurate those rates are compared to their own contracts—and how they stack up against competitors. While price transparency data has limitations—for example, it ignores certain contract nuances like stop-loss provisions—payer-posted rates are still essential to understanding rate relativity. Pairing that information with other critical data such as service-mix adjusted claims benchmarking and payer financial performance data is essential for understanding market position, identifying outlier rates, and preparing for payer negotiations. Hospitals that actively monitor payer disclosures are better equipped to spot inconsistencies, flag undervalued services, and confirm that their rates reflect the quality care they deliver. 

Turn compliance into strategy 

Price transparency regulations continue to have broad implications for hospitals, impacting everything from payer relationships to internal accounting and billing data systems. However, the regulations can also be viewed not just as a regulatory obligation, but as a strategic opportunity.  

By approaching compliance as a strategic lever—not just a regulatory requirement—hospital leaders can strengthen payer relationships, improve operational transparency, and position their organizations for long-term success.