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!