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Patient Rights Advocate (PRA) has released its Interim Semi-Annual Hospital Price Transparency Report dated September 2025 which claims hospitals are failing to comply with federal price transparency rules—especially when it comes to posting negotiated rates in dollars and cents. However, the report’s conclusions are based on a fundamental misunderstanding or misrepresentation of both the CMS requirements and the realities of hospital-payer contracts.

Let’s break down where the report goes off track—and what the law, and industry experts, actually say.

1. Hospitals ARE using dollars and cents to post payer-specific negotiated charges

The report criticizes hospitals for not posting negotiated rates in dollars and cents when their contracts are based on algorithms or percentages. But here’s the key: hospitals are doing exactly what they are required to do by describing the algorithm and providing the average historic reimbursement amount – in dollars and cents – for these arrangements. This is spelled out in the 2024 OPPS Final Rule:

If the standard charge is based on a percentage or algorithm, the machine-readable file (MRF) must also describe the percentage or algorithm that determines the dollar amount for the item or service, and, beginning January 1, 2025, calculate and encode an estimated allowed amount in dollars for that item or service.

Regulation Citation: 45 CFR § 180.50 (b)(2)(ii)(C)

This suggests that PRA is only recognizing dollar values from fee schedules, case rates, and per diems as “valid” even though hospitals are disclosing compliant dollar values in another field.  This is interesting in that the dollar amounts in the algorithm/allowed amount field more accurately and completely reflect the payer-specific negotiated charge which is precisely the kind of transparency PRA aims to promote.

2. The “Rollback” Narrative Is Misleading – it’s Actually Progress

The report uses side-by-side examples of hospital files from before and after July 1, 2024, to suggest that hospitals have become less transparent. But this comparison is apples to oranges. On July 1, 2024, CMS required all hospitals to use a new Machine-Readable File (MRF) template—one that introduced new data elements including algorithm-based and allowed amount reporting.

So, when the report shows that hospitals stopped posting dollar values after this date, it’s not evidence of non-compliance – it simply demonstrates that hospitals began complying with the new MRF schema and data elements.  Further, this change isn’t a regulatory “rollback” it’s actually an advancement.

The shift to algorithm methodology was a deliberate move by CMS to improve accuracy and completeness in reporting payer-specific negotiated charges. While per diem, case rate, and fee schedule dollar amounts may be accurate in isolation, they fail to reflect the full complexity of payer contracts. The algorithm and allowed amount fields, by contrast, provide a more complete and realistic representation of what hospitals are actually paid under those contracts.

The PRA report notes that: “1% of hospitals reviewed (18) were able to publish files that expressed 100% of their negotiated charges in dollars-and-cents” (presumably meaning dollars and cents in case rate, fee schedule, and per diem fields).

Rather than suggesting that the other 99% of hospitals are hiding rates, this finding actually supports an assertion that we have made routinely – that hospital reimbursement is based on an algorithm.  For reference, here is how CMS accurately defines an algorithm in the 2024 OPPS Final Rule:

At other times, however, hospitals and payers establish the payer-specific negotiated charge by agreeing to an algorithm that will determine the dollar value of the allowed amount on a case-by-case basis after a pre-defined service package has been provided. This means that the standard charge that applies to the group of patients in a particular payer’s plan can only prospectively be expressed as an algorithm, because the resulting allowed amount in dollars will be individualized on a case-by-case basis for a pre-defined service package, and thus cannot be known in advance or displayed as a rate that applies to each member of the group.

Based on our detailed modeling of thousands of hospital-payer contracts, we believe this IS how hospital reimbursement works and representing dollar amounts through algorithm/allowed-amount reporting is the only way to completely, accurately, and ethically disclose this information for the benefit of the public.

3. “Unquantifiable Algorithms” Are Not Non-Compliance

One of the report’s main complaints is that hospitals are posting “unquantifiable algorithms”—methodologies that don’t allow an individual or third party to calculate the exact payment amount for any type of patient encounter. But here’s the truth: CMS does not require hospitals to do this because of the incredible complexity and administrative burden to convey all algorithm information for millions of unique patient encounters into a single machine readable file.

CMS appropriately concluded in the CY24 OPPS Final Rule that “in the interest of reducing burden and complexity of files, we will allow hospitals provide a description of the algorithm, rather than attempting to insert the specific algorithm itself in the MRF.”

As we noted in our recent blogs on the CMS July 2025 RFI and CY26 OPPS Proposed Rule, while some may contend that all algorithm elements from the contract management system should be provided in the MRF, there are two critical objections to understand:

• The administrative burden to compile this information would be prohibitively high – and potentially illegal where the hospital does not have ownership rights to underlying components. Further, it is difficult to imagine the required effort to create a uniform file schema to account for this complexity of thousands of variables and conditions within a single MRF.
• Most striking, even if the first point could somehow be solved, developers and researchers leveraging this massive database would then also require patient claims data from the hospital to understand how that hospital’s treatment patterns create the final payer specific negotiated charge. This value IS the allowed amount in the current MRF.

Instead of attacking “unquantifiable algorithms”, PRA should recognize that the application of all the algorithm elements have already been applied to patient claims to fully represent the payer-specific negotiated charge to the public within the current allowed amount values.

Conclusion: Transparency Requires Accuracy, Not Misinformation or Oversimplification

In sum, the latest PRA report makes false claims about federal regulations and hospital compliance, misrepresenting what hospitals are required to disclose and how they are doing so. Hospitals are not hiding prices—they are following CMS rules that prioritize accuracy and completeness over oversimplified dollar figures in a limited set of charge method fields. The shift to algorithm and allowed amount reporting is not a rollback; it’s a meaningful advancement that better reflects how reimbursement actually works.

PRA shares the following observation in its CY2026 OPPS Proposed Rule letter to CMS:

Prices posted in hospitals’ machine-readable files (MRF’s) often only reflect a fraction of the actual prices paid, as the rule only requires disclosure of base rates. To truly enable correct price comparisons within and across hospitals, all contract terms and payment exceptions must be disclosed.

Interestingly, the very thing PRA is advocating for in this comment is completely addressed in the current algorithm/allowed amount reporting they are attacking – compliantly disclosed in dollars and cents.

If we want true transparency, we must embrace methodologies that mirror real-world payment structures—not attacking hospitals for complying with them.  We continue to welcome opportunities to discuss advancing meaningful transparency initiatives for our industry.

For more on this topic, see our detailed breakdowns of:

• The CY26 OPPS Proposed Rule
  1. Webinar
  2. Summary & CMS Comment
• July 2025 CMS Accuracy & Completeness RFI Response

If you’d like to discuss these issues further or need help with compliance, Cleverley + Associates is here to help.  Feel free to reach out to us!

CMS has released new price transparency guidelines for hospitals, including guidance specific to the production of the machine-readable file (MRF). We offered a free webinar to go over the proposed changes in detail. You can watch it now!

You can download the slides here.

We help hospitals prepare their machine readable files. If you’d like to discuss how we can help your facilities, you can contact us here!

On July 15, 2025, the Centers for Medicare & Medicaid Services (CMS) released the CY26 Outpatient Prospective Payment System (OPPS) Proposed Rule, which includes significant updates to the Hospital Price Transparency (HPT) requirements. These proposals aim to improve the accuracy, comparability, and usability of pricing data for consumers, payers, and policymakers.

Below is a high-level overview of the key areas that may impact your hospital’s compliance and reporting obligations, as well as our firm’s initial considerations for responses to CMS.  We welcome discussion with interested stakeholders.

1. Strengthened Attestation Requirements

Beginning January 1, 2026, CMS proposes that hospitals include a revised attestation in their machine-readable files (MRFs) confirming that all standard charge data is complete, accurate, and compliant with CMS requirements. This includes a new mandate to name a senior official (e.g., CEO or president) responsible for data integrity. Additionally, if a payer-specific negotiated charge is expressed as a percentage or algorithm, hospitals would be required to disclose all necessary components—such as fee schedules, formulas, or referenced values—so that the public can derive an actual dollar amount from the algorithm.

CLEVERLEY + ASSOCIATES COMMENT

While we understand CMS’s goal of enhancing the context for the payer specific negotiated charge, we are concerned about the immense administrative burden required to encode all algorithm details supporting the allowed amounts in the MRF.  Hospital-payer contracts typically include extensive supporting documentation, conditional pricing logic, and lists of thousands of variables that are not translatable into a machine-readable file format. Attempting to encode these algorithms in the MRF would exceed the capabilities of the current schema and require substantial manual effort.

We note that in the CY24 OPPS Final Rule, CMS acknowledged this complexity and stated:

“In the interest of reducing burden and complexity of files, we will allow hospitals [to] provide a description of the algorithm, rather than attempting to insert the specific algorithm itself in the MRF. We are therefore finalizing that if the standard charge is based on a percentage or algorithm, the MRF must also describe (instead of specify) what percentage or algorithm determines the dollar amount for the item or service. By describing, rather than specifying, what percentage or algorithm determines the dollar amount for the item or service, we believe this will balance the need for exact information versus MRF complexity, hospital burden, and the limitations of data processing.”

We support this previous language and encourage CMS to reaffirm this approach in the CY26 rulemaking.  Importantly, CMS states that the purpose of encoding these values and logic are so that the public could derive an actual dollar amount.  We strongly believe the algorithm logic is not able to be included in the MRF but recognize two important barriers to the public constructing dollar amounts if the data somehow could be encoded.  First, the public would need to then construct claims pricing engines to house the thousands of rates, terms, and conditions equivalent to the contract management and medical billing systems hospitals and health systems have licensed or constructed.  Second, claims data would then need to be infused into these externally developed pricers to arrive at the payer specific negotiated charge.  This extensive process would produce values consistent with the Estimated Allowed Amount (or new Allowed Amount).  In sum, there would be an incredible administrative burden and cost for hospitals and developers that would not yield any additional material benefit beyond what will be available in the Allowed Amount value.

We would also like to emphasize that beyond the immense administrative and technical challenges to this proposal, there are also significant legal challenges as many pricing algorithms rely on proprietary groupers or logic developed and owned by payers or third-party vendors.  Such episodic bundling methodologies or reimbursement structures are often protected under intellectual property agreements or confidentiality clauses in hospital contracts.  Requiring hospitals to encode such logic in the MRF could expose them to contractual breaches or legal liability and may not even be technically possible as some components are completely and wholly managed by the payer and/or third-party vendor.

Further, we would like to address a key assumption underlying the proposed framework—namely, the perception that the current “dollar amount” charge methodologies in the MRF (fee schedule, case rate, and per diem) are inherently simple and self-contained representations of payer-specific negotiated charges.

In our extensive experience evaluating thousands of hospital-payer contracts, we have yet to encounter a case where a fee schedule, case rate, or per diem amount exists in isolation. These values are always embedded within broader contractual algorithms that include:

• Payer specific code categorizations and carveouts with multiple payment methodologies dependent on claim-level conditions defined by custom case categories, HCPCS/CPT® codes and/or ranges, revenue code values/ranges, procedure and diagnosis code values/ranges, etc.
• Surgical case grouping logic dependent on relative weights of thousands of soft-coded CPT®/HCPCS conditions and multiple-procedure discounting rules that exist with corresponding lists of conditions and codes
• MSDRG platform versions and corresponding lists of relative weights, base rates, and markup conditions
• Charge threshold logic for lesser-of and stoploss provisions that is dependent on claim-level criteria
• Packaging and exclusion logic based on claim level criteria based on lists of codes and/or code ranges
• Hierarchy rankings to determine when/how the payment is calculated based on the types of services provided and conditions listed above

These elements are critical to determining the actual allowed amount a hospital receives and are not captured by the “payer-specific negotiated charge: dollar amount” field alone.
We understand that some contend that estimated allowed amounts are less accurate or complete, however, we believe they are in fact more representative of the full contractual payment structure. The allowed amount:

• Reflects the real-world adjudication of claims under all applicable contract terms,
• Incorporates all conditional logic and exceptions, and
• Provides a comparable, dollar-based benchmark across hospitals and payers.

In sum, we recommend that CMS:

• Maintain the current attestation statement without the requirement for hospitals to encode all algorithm components. Implementing the proposed statement would introduce an inconceivable administrative burden, overwhelm the file with conditional logic that cannot conform to the file schema, undermine the goal of machine-readability and comparability, and introduce significant legal challenges where the hospital does not own or manage the algorithm logic.  Further, even if all this logic could somehow be placed in an MRF, developers and researchers would still need to construct systems to ingest and house this information and require additional claims data to determine the payer specific negotiated charge: this result is the current allowed amount so there is no additional gain to the public.

Reconsider the emphasis on the “payer-specific negotiated charge: dollar amount” field for fee schedules, case rates, and per diems, by acknowledging that these values are components of broader algorithms, not standalone charges.  Further, these charge methods are only a fraction of the methodologies employed in payer contracts contributing to confusion and misleading information. Instead, CMS should consider eliminating the “standard charge methodology” field in favor of a unified focus on allowed amount-based reporting, which is the only method that fully reflects the actual payment received and enables meaningful comparisons across hospitals.

2. Replacement of Estimated Allowed Amounts

CMS proposes that hospitals report the median, 10th percentile, and 90th percentile allowed amounts, along with the count of allowed amounts, when negotiated charges are based on percentages or algorithms. These new data elements would replace the “estimated allowed amount” to provide a more accurate and representative view of pricing. Notably, CMS proposes a non-standard calculation method where, if a percentile falls between two observed values, the hospital must report the next highest actual allowed amount rather than averaging the two.  This method is proposed to have MRF values reflect an actual historical payment amount from the dataset.

CLEVERLEY + ASSOCIATES COMMENT

We appreciate CMS’s continued efforts to improve HPT data and understand the intent behind replacing the “estimated allowed amount” with more statistically grounded data elements, including the 10th percentile, median, and 90th percentile allowed amounts. However, we respectfully submit the following concerns regarding the proposed methodology and data reporting requirements:

1. Non-Standard Median & Percentile Calculation Methodology

We appreciate CMS’s commitment to improving the accuracy and usability of hospital pricing data and understand the intent behind requiring hospitals to report the next highest observed value when a percentile falls between two data points. However, we respectfully suggest that this approach may unintentionally mischaracterize standard statistical methods as less “real” or “actual.”

Standard methodologies for calculating percentiles—including medians, 10th, and 90th percentiles—are grounded in real, historical data and are widely accepted across healthcare analytics, actuarial science, and academic research. These methods often interpolate between observed values to more precisely reflect the central tendency or distribution of a dataset. Far from being abstract or theoretical, these interpolated values are statistically valid representations of actual values in the data.

We encourage CMS to recognize that these standard approaches are equally “real” in that they are derived from actual remittance data and may, in fact, provide a more accurate and representative view of pricing variation—particularly in datasets with skewed distributions or outliers. Allowing hospitals to use these established methods would preserve methodological integrity, enhance comparability across institutions, and support more meaningful insights for consumers, researchers, and policymakers.

In addition to our methodological concerns, we are also concerned about the administrative burden the proposed custom calculation method would impose on hospitals. The requirement to report the next highest observed value—rather than using standard percentile formulas—is not readily supported by most common statistical software platforms or data analysis tools. As a result, hospitals would need to develop custom logic or manual workarounds to comply, increasing the complexity, cost, and risk of error in data preparation. This added burden may disproportionately affect smaller hospitals or those with limited data science resources, without delivering a clear benefit over established, statistically valid methods that are already widely used, understood, and representative of actual values.

2. HIPAA Sensitivity and Small Volume Counts

The proposal requires hospitals to report the count of allowed amounts used to calculate each percentile. While we understand the intent to provide context for statistical reliability, we are concerned that reporting exact counts below 11 may conflict with HIPAA de-identification standards and longstanding CMS data suppression policies.

Specifically, CMS and other federal agencies have historically suppressed or masked data when cell sizes are fewer than 11 to protect patient privacy.  Publishing exact counts below this threshold could inadvertently enable re-identification, especially in rural and/or low-volume settings.

3. Encoding “0” in Allowed Amount Fields
   CMS also proposes that hospitals encode a “0” in the allowed amount field within the Machine-Readable File (MRF) when no dollar value can be derived for a payer-specific negotiated charge. While the rule provides examples involving new hospitals or newly established/revised payer-plans—where no historical claims data exists—this principle should logically extend to any instance where a specific payer-plan lacks claims data for a particular item or service during the lookback period.

In sum:

• We encourage CMS to allow the use of standard percentile calculation methods to preserve methodological integrity, reduce burden, and support more accurate and meaningful comparisons across hospitals. This will allow hospitals to utilize standard statistical software to derive MRF values while also best representing the most likely payer specific negotiated charge to the public.
• We urge CMS to consider allowing hospitals to suppress or mask counts below 11. Replacing values below this threshold with an asterisk or “<11” would balance the need for transparency with privacy concerns.  In addition, we suggest only requiring the 10th and 90th percentile values when counts are 11 or greater.  Doing so would better statistically capture true 10th and 90th percentile values and would also address privacy concerns among outlier situations.  Median values, of course, could be statistically calculated with two claims or greater.
• We support the proposed methodology for handling insufficient claim remittance history in the MRF, particularly the use of “0” counts and explanatory notes for new or revised payer contracts. However, we respectfully request clarification and affirmation that, in cases where there is no claim volume for a specific payer-plan for certain services (example, a small payer that had no hip replacement procedures to derive an allowed amount) that hospitals may either: exclude these payer/plan/service combinations from the MRF, or also display “0” in the count field, with the percentile fields left blank, as outlined. The former, would decrease MRF file size.

3. Standardization of Data Sources and Methodology

CMS proposes that hospitals be required to use EDI 835 Electronic Remittance Advice (ERA) data to calculate allowed amounts to ensure consistency and accuracy. The lookback period for data would be limited to no longer than the 12 months preceding the effective date in the MRF, and zero-dollar claims would be excluded to avoid skewed results.

CLEVERLEY + ASSOCIATES COMMENT

We appreciate CMS’s efforts to standardize the methodology and data sources used to calculate allowed amounts in the Hospital Price Transparency (HPT) Machine-Readable Files (MRFs). We support the use of EDI 835 transaction data as the source of truth for allowed amounts, and we offer the following comments and recommendations:

1. Lookback Period: Need for Flexibility to Ensure Data Completeness

While we understand the intent behind limiting the lookback period to no more than 12 months prior to the MRF posting date, we are concerned that this restriction may inadvertently reduce the completeness and reliability of the data.

Hospitals typically experience a claims adjudication lag of several weeks, meaning that the most recent months of data may be incomplete or unavailable.  Further, hospitals require significant time to compile, validate, and publish the MRF in accordance with CMS formatting and attestation requirements. As a result, the effective lookback period may be significantly shorter than 12 months, particularly for hospitals with complex data structures, payer mixes or high volumes of claims.

To address this concern, we recommend that CMS allow hospitals to select a representative lookback period of up to 18 or 24 months from the MRF effective date. This approach would improve data completeness and stability while maintaining transparency and comparability.

2. Future Consideration: Standardized Grouping Logic for Claims-Based Reporting

As CMS continues to refine the HPT framework, we encourage consideration of standardized grouping logic for claims data to enhance consistency and comparability across hospitals and payer plans.

Specifically:

• For inpatient claims, we recommend using the Medicare Severity Diagnosis-Related Group (MS-DRG) as the standard grouping mechanism.
• For outpatient claims, we recommend using the primary HCPCS code and associated Ambulatory Payment Classification (APC).

Since CMS has identified the claim as the authoritative data source for allowed amounts, it would be a natural and logical extension to apply claim-based grouping logic to standardize how services are categorized and reported. This would:

• Improve comparability across hospitals and plans,
• Reduce variation in how services are defined, and
• Align with existing CMS payment methodologies and data structures.

We believe this enhancement would significantly improve the utility of the MRFs for consumers, payers, researchers, and policymakers.

4. National Provider Identifier (NPI) Requirement

CMS proposes that hospitals include their National Provider Identifier(s) in the MRF to improve data alignment with other healthcare datasets, such as those from the Transparency in Coverage initiative.

CLEVERLEY + ASSOCIATES COMMENT

We support CMS’s proposal to require hospitals to report their Type 2 National Provider Identifier (NPI) in the Machine-Readable File (MRF) as a means to improve data comparability and alignment with Transparency in Coverage (TiC) files. The NPI is a valuable identifier for linking to claims data and provider directories, and its inclusion in the MRF will enhance interoperability across datasets.

However, we believe there is also significant value in incorporating the CMS Certification Number (CCN), also commonly known in the industry as the Medicare Provider Number (MPN), into the MRF framework. The CCN is the foundational identifier used in Medicare cost reports, quality reporting programs, Hospital Compare/Care Compare, and Medicare claims and payment systems. Leveraging both the NPI and CCN would strengthen the linkage between hospital pricing data and other CMS datasets, improving the utility of the MRF for researchers, payers, and regulators.

To that end, we recommend that CMS consider requiring the CCN in the MRF file naming convention, in place of the Employer Identification Number (EIN). This change would create clarity and consistency around which facilities are required to produce an MRF and reinforce the expectation that each CCN should have a corresponding MRF. Additionally, we note that some hospitals have expressed sensitivity around the use of the EIN, as it is primarily a tax identifier and may not align with how hospitals are structured or represented in clinical and financial reporting systems. Using the CCN instead would reduce confusion and better reflect the operational identity of the hospital.

Within the file itself, hospitals could then list all associated Type 2 NPIs. This approach would preserve the benefits of NPI-based linkage while providing a valuable crosswalk between the CCN and NPI, supporting more robust data integration and analysis.Importantly, using the CCN as the file identifier is preferable to including it as an additional data element within the file. This is because hospitals may have one-to-many relationships between a CCN and multiple NPIs. Using the CCN as the anchor for the file would align with other federal reporting structures and allow hospitals to list all associated NPIs within the file. This structure would provide a clear and valuable crosswalk between the CCN and NPI, while avoiding the confusion that could arise if multiple CCNs and NPIs were listed under a single EIN. If CMS elects to retain the EIN as the file identifier, we would then recommend against the inclusion of the CCN as a separate data element in addition to NPI as it could introduce ambiguity in cases of one-to-many relationships between all three identifiers. That said, we also recognize that some hospitals may not have a CCN—for example, non-Medicare certified entities—and in those cases, the EIN could continue to serve as the fallback identifier in these limited cases.

In sum, we believe this dual-identifier approach—using the CCN for file naming and the NPI within the file—would enhance transparency, reduce confusion, and improve the interoperability of hospital pricing data across CMS systems.

5. Civil Monetary Penalty (CMP) Adjustments

CMS does not propose any new conditions under which CMPs would be imposed. The existing enforcement framework remains intact, meaning CMPs are only imposed when a hospital:

• Fails to respond to a CMS warning notice, or
• Fails to comply with a Corrective Action Plan (CAP) after receiving a request.

This is consistent with the current enforcement process outlined in prior rules and reaffirmed in this proposal.  The only substantive change CMS proposes is the optional 35% penalty reduction if a hospital:

• Waives its right to an administrative hearing, and
• Accepts responsibility for the violation.

This is intended to streamline enforcement and encourage faster resolution of cases. However, this reduction is not available if the hospital fails to post an MRF or shoppable services file (i.e., core violations) or the hospital does not submit the waiver within 30 days of the CMP notice.

CLEVERLEY + ASSOCIATES COMMENT

We appreciate CMS’s approach in proposing a 35% reduction in civil monetary penalties for hospitals that waive their right to an administrative hearing and acknowledge noncompliance. This policy strikes a fair balance between accountability and administrative efficiency, encouraging timely resolution while reinforcing the importance of transparency. We support this change as a constructive incentive that promotes compliance and helps ensure that patients and stakeholders have access to accurate, actionable pricing information.

6. Timing

CMS proposes that any of the proposed changes would become effective January 1, 2026.

CLEVERLEY + ASSOCIATES COMMENT

Finally, we respectfully urge CMS to delay implementation of any reporting or schema changes related to hospital price transparency under the CY2026 OPPS Proposed Rule until January 1, 2027. While we support efforts to improve data accuracy and accessibility, the proposed effective date of January 1, 2026 presents significant operational challenges:

• Timing of Final Rule: The final rule is likely expected in November 2025, leaving hospitals with minimal time to interpret, test, and implement MRF updates before the January 1, 2026 deadline.
• Production Timelines: Many hospitals begin MRF production 4–6 months in advance of the effective date. By November, files for January 1, 2026 will already be in production or finalized.
• Avoiding Dual File Burden: A mid-year implementation (e.g., July 2026) would require many hospitals to produce two MRFs in one calendar year, increasing administrative burden and cost.

PROPOSED RULE:

The proposed rule (CMS-1834-P) can be downloaded at the Federal Register here: https://www.federalregister.gov/d/2025-13360.

PROVIDING COMMENT:

Stakeholders wishing to provide comment should follow the information below that’s contained within the proposed rule:

DATES: To be assured consideration, comments must be received at one of the addresses provided below, by September 15, 2025.

ADDRESSES: In commenting, please refer to file code CMS-1834-P.

Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):

1. Electronically.

You may submit electronic comments on this regulation to http://www.regulations.gov. Follow the “Submit a comment” instructions.

2. By regular mail.

You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1834-P, P.O. Box 8010, Baltimore, MD 21244-8010. Please allow sufficient time for mailed comments to be received before the close of the comment period.

3. By express or overnight mail.

You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1834-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

RESPONSES PROVIDED BY CLEVERLEY + ASSOCIATES July 21, 2025

Recently, CMS released a Request for Information regarding the accuracy and completeness of hospital machine-readable files (MRFs). According to the request, “To meet the President’s Executive Order to ensure compliance with the transparent reporting of complete, accurate, and meaningful data, CMS seeks public input on whether and how CMS can improve hospital price transparency (HPT) compliance and enforcement processes to ensure that the pricing information in the machine-readable file (MRF) is accurate and complete.” The RFI specifically posed six questions related to the accuracy and completeness of data required in hospital MRFs. You can read the complete RFI here (link).

Cleverley + Associates is a recognized leader in hospital pricing and price transparency. We have helped hundreds of hospitals and health systems understand and comply with federal and state guidelines related to price transparency mandates. We submitted our comments to CMS in response to this RFI and posted these comments here! You can also download the pdf here!

QUESTION ONE RESPONSE

Should CMS specifically define the terms “accuracy of data” and “completeness of data” in the context of HPT requirements, and, if yes, then how?

CLEVERLEY + ASSOCIATES QUESTION ONE COMMENT

First, we appreciate the opportunity to comment on these important questions. We fully support healthcare price transparency and are committed to helping achieve more clarity and simplicity for patients. We thank CMS for continually reviewing and collaborating with stakeholders to achieve these common goals.

To specifically address the first question, we do not believe definitions of “accuracy of data” and “completeness of data” need to be further defined. With the addition of the attestation statement in the file schema released on July 1, 2024, hospital administrators understand that all required data elements must be provided. We do believe, however, that CMS could continue to clarify how these data elements are derived. We will comment in a future question on how industry alignment on the data sources and methods to extract required data elements would address the perception that MRF data is inaccurate and/or incomplete.

QUESTION TWO RESPONSE

What are your concerns about the accuracy and completeness of the HPT MRF data? Please be as specific as possible.

CLEVERLEY + ASSOCIATES QUESTION TWO COMMENT

We believe that a critical reason for MRF data being perceived as inaccurate or incomplete is driven from a lack of alignment on the data sources and methods used to extract the required MRF data elements. Hospital administrators are utilizing data within the hospital billing environment to construct the MRF but can derive the values from different sources.

First, industry stakeholders must agree that standard gross charges and payer specific negotiated charges are separate and derived from different data sources. Standard gross charge information should be defined as information from the hospital’s charge description master (CDM) and any additional drug/supply modules. Payer specific negotiated charges would come from the hospital’s contract management system and claims billing environment.

Perceptions of inaccuracy and incompleteness appear to be focused on the payer specific negotiated charge where the greatest amount of complexity resides. CMS appropriately recognized this complexity in adding the “Charge Method”, “Algorithm”, and “Estimated Allowed Amount” variables in the current MRF schema to provide additional context for the provided values. The challenge hospitals face is how to select the appropriate charge method.

There has been, however, confusion in how to leverage the charge method and associated fields:

We appreciate and agree with the definition CMS provided in the CY24 OPPS Final Rule to appropriately describe these situations where multiple methods and types occur to derive the payer specific negotiated charge: algorithm.

CMS also appropriately concluded “in the interest of reducing burden and complexity of files, we will allow hospitals provide a description of the algorithm, rather than attempting to insert the specific algorithm itself in the MRF” (CY24 OPPS Final Rule). Common algorithm logic is seen below to emphasize the prudency of this conclusion:

CLEVERLEY + ASSOCIATES QUESTION TWO COMMENT, CONTINUED

We provide this context as we believe the main cause for variation within the payer specific negotiated charge is how hospitals are trying to derive a compliant value. The hospital can attempt to derive a portion of the algorithm contents to conform to the limited set of defined charge methods (per diem, case rate, fee schedule, percentage of charge) or it can leverage the estimated allowed amount to completely account for all the algorithm elements.

The challenge with the first method is that these values do not fully account for all charge methods and algorithm contents needed to determine the payer specific negotiated charge. Further, attempting to provide this content isn’t feasible because of the incredible administrative undertaking and inability to conform to the file schema. We understand that some may believe that payment can be simplified in these basic charge method categories, however, in the thousands of hospital-payer contracts we have analyzed and modeled, we have yet to see where one of these methods are used without additional terms and conditions (absent an entirely percentage of charge contract).

In sum, the two primary ways hospitals are deriving the payer specific negotiated charge (illustrated on the following page) are limiting the usefulness of the HPT data and leading to a perception that it is incomplete and/or inaccurate. In reality, both are accurate and compliant as they are leveraging the data elements, definitions, and schema structure. However, only the other/algorithm/estimated allowed amount can truly be considered “accurate” AND “complete” as all payer specific negotiated charge methods and algorithm logic have been accounted for in the MRF values.

QUESTION THREE RESPONSE

Do concerns about accuracy and completeness of the MRF data affect your ability to use hospital pricing information effectively? For example, are there additional data elements that could be added, or others modified, to improve your ability to use the data? Please provide examples.

CLEVERLEY + ASSOCIATES QUESTION THREE COMMENT

Per our response in question two, the utility of the MRF data is limited because the payer specific negotiated charge is not consistently derived among hospitals. We do not believe additional data elements are needed, but contend that the answer to addressing the accuracy, completeness, and utility of the HPT data is found in having all hospitals (and payers) report payer specific negotiated amounts using the existing estimated allowed amount.

Some may contend that another path could be to require all algorithm elements from the contract management system to be provided. There are two key objections to this, though:

1)The administrative burden to compile this information would be prohibitively high. Further, it is difficult to imagine the required effort to create a uniform file schema to account for this complexity of thousands of variables and conditions within a single MRF.

2)Most striking, even if the first point could somehow be solved, developers and researchers leveraging this massive database would then also require patient claims data from the hospital to understand how that hospital’s treatment patterns create the final payer specific negotiated charge. So, why not use the estimated allowed amount where the application of the hospital’s unique contract management database has already been applied to patient claims to create the payer specific negotiated charge?

In sum, exclusively using the Estimated Allowed Amount for the payer specific negotiated charge would:

• Satisfy the “letter” and the “spirit” of the transparency requirements to convey a complete picture of payer specific negotiated charge that also captures the hospital’s typical treatment pathways
• Increase the utility of these values as they could be directly compared Essentially, the estimated allowed amount is indifferent to all the numerous contracting methods and values across hospitals and payers creating an ability to benchmark across disparate rates, methods, and conditions
• Address the concerns of inaccurate or incomplete data by providing a standardized definition and data source for both hospitals and payers.

Several final comments regarding the use of the estimated allowed amount:

1)First, defined this way, hospitals and payers could then leverage a straight-forward grouping logic to report payer specific negotiated charges by a single inpatient and outpatient code type (MSDRG for inpatient and primary APC/HCPCS for outpatient, as example). This would permit consistency across HPT and TIC files, dramatically reduce file size, and permit seamless comparison across hospitals and payers regardless of differing contract structures, rates, conditions, and methods.

2)Second, this definition would also permit the elimination of the “Charge Method” variables as these values do not “completely” describe any payer specific negotiated charge (percentage of charge could be the only exception where there are still some contracts that can be entirely POC).

3)While not a new field, we would support the creation of a national payer code database to be able to provide more comparability for the payer variable.

4)Finally, we offer a suggestion to change the name from “estimated allowed amount” to simply “allowed amount.” Because the values are derived using billed claims the results are not based on “estimates” but “actual” patient encounters. We believe the use of the term “estimate” could cause confusion among the public that the results are somehow inaccurate.

QUESTION FOUR RESPONSE

Are there external sources of information that may be leveraged to evaluate the accuracy and completeness of the data in the MRF? If so, please identify those sources and how they can be used.

Per our responses in questions two and three, if estimated allowed amount (or simply, “allowed amount”) became the definition for the payer specific negotiated charge then average historic reimbursement could become the single source of truth for this variable.

CMS could then define how to derive average historic reimbursement from a claims source – 837/835 claims data, as primary example – for a given time period and under certain conditions to permit appropriate and accurate reporting. We do express concern over recent guidance on May 22, 2025, to instruct hospitals to create this average from as little as one claim (not technically an average) or in the absence of claims data (not feasible to create historic reimbursement where no historic claims exist). We do understand the reason for the guidance to reduce the number of reported nine 9s in hospital MRFs which may have resulted from hospitals implementing previous CMS guidance to restrict values where HIPAA thresholds of less than eleven claims were present. We believe CMS could amend that guidance to using at least two claims in order to maintain an average (minimum for an arithmetic mean) and thereby creating more values in the MRF. Null or single claim volume instances should not be viewed as problematic as their exclusion in the file would not dramatically impact the vast majority of services that patients at that hospital would be interested in seeing. In fact, excluded cases could help inform patients that the treatment is not common at that hospital.

In sum, using 837/835 claims data to derive the payer specific negotiated charge could create alignment between hospital and payer MRF files to permit accuracy, completeness, consistency, and comparability.

QUESTION FIVE RESPONSE

What specific suggestions do you have for improving the HPT compliance and enforcement processes to ensure that the hospital pricing data is accurate, complete, and meaningful? For example, are there any changes that CMS should consider making to the CMS validator tool, which is available to hospitals to help ensure they are complying with HPT requirements, so as to improve accuracy and completeness?

CLEVERLEY + ASSOCIATES QUESTION FIVE COMMENT

We commend CMS for releasing the online validator tool to help hospitals and interested stakeholders understand a hospital’s adherence to the compliant file schema. As mentioned in previous responses, solidifying a data source and methodology to derive all elements for the payer specific negotiated charge would improve the accuracy, completeness, and meaningfulness of the data. We believe that the estimated allowed amount (or simply “allowed amount”) remains the most viable option to accomplish these goals.

QUESTION SIX RESPONSE

Do you have any other suggestions for CMS to help improve the overall quality of the MRF data?

CLEVERLEY + ASSOCIATES QUESTION SIX COMMENT

We appreciate the opportunity to share our responses to the previous questions and would welcome an opportunity to discuss further. Thank you for creating this RFI as a means to promote dialogue on this important topic.