HA 610 Unit 1 policy brief example

Posted but Not Usable: A Policy Brief on Hospital Price Transparency Compliance for the Board of a 180-Bed Community Hospital

Student Name

Health Care Administration, Herzing University

HA 610: Health Policy and Management

Instructor Name

January 16, 2026

Posted but Not Usable: A Policy Brief on Hospital Price Transparency Compliance for the Board of a 180-Bed Community Hospital

Summary

Federal rules require every hospital to publish its standard charges, including the rates it has negotiated with each insurer, in a machine-readable file and to display prices for a set of shoppable services in a form patients can read. Our composite hospital, a 180-bed nonprofit community hospital, posts both. The problem is that the file is incomplete for contracts priced by percentage, the consumer tool covers only the minimum required services, and new requirements in force from January 1, 2026, with enforcement from April 1, 2026, will expose both gaps. This brief recommends Option 2: bring the file into full compliance with the 2026 requirements and expand the consumer estimator to the 100 most-searched services, at an estimated first-year cost of $185,000, well below the potential annual penalty for noncompliance.

Sizing the Problem

Compliance with the federal rule has been uneven since it took effect. In a national study of 3,558 Medicare-certified general acute-care hospitals, 55% had not posted a machine-readable file containing commercial negotiated prices by June 2021, five months after the rule became effective; compliance was higher among large, system-affiliated, and for-profit hospitals and varied widely between markets (Jiang et al., 2022). Even where prices are posted, they may not help patients. A study of 60 hospitals found that online prices and prices quoted by telephone for the same shoppable services, such as an uncomplicated vaginal birth or a brain MRI, often differed, and that many hospitals did not provide both (Thomas et al., 2023).

For our hospital, the gap is concrete. Of our 14 commercial contracts, 5 pay certain services as a percentage of billed charges. For those services the current file lists the percentage, not a dollar amount, which meets the letter of the original rule but tells a patient or employer nothing they can use. Our consumer estimator covers the 300 shoppable services the rule requires, but a review of our website search logs shows that 38 of the 100 services patients most often look for are not among them.

Two further facts sharpen the problem. Our patient financial services team logged 212 calls last year from patients asking for a price before a planned service, and in 61 of them the caller had already looked at our website and could not find the service or could not interpret what was shown. And the largest employer in our county, which buys coverage for about 2,400 workers, has asked for our negotiated rates in a usable form as part of its plan redesign for 2027. The file as it stands would not answer either group.

The Current Policy

The requirements are in 45 CFR Part 180, which the Centers for Medicare & Medicaid Services [CMS] issued as a final rule published in November 2019 and effective January 1, 2021 (CMS, 2019). Every hospital operating in the United States is covered. The rule asks for two public products. The first is one machine-readable file listing, for every item and service, the hospital's list price, its price for self-paying patients, each insurer's negotiated rate, and the lowest and highest of those rates. The second is a display that ordinary readers can use, covering at least 300 shoppable services, 70 of them chosen by CMS, or an online estimator that meets the rule's conditions instead.

The rule has been updated several times. The update finalized in November 2025 for calendar year 2026 requires hospitals whose negotiated charges are based on percentages or algorithms to add the median, 10th percentile, and 90th percentile allowed amounts, and the count of allowed amounts, drawn from remittance data over a look-back period of 12 to 15 months. It also replaces the earlier affirmation statement with an attestation, naming a senior official, that the file is complete and accurate (CMS, 2025).

CMS administers the rule. Enforcement proceeds from warning notices to requests for corrective action plans and then civil monetary penalties, which for a hospital of our size are calculated per bed per day and can exceed $600,000 a year. CMS publishes the names of hospitals that receive penalties.

Options

Option 1: minimum compliance. Add the percentile allowed amounts for the five percentage-based contracts, complete the attestation, and leave the consumer estimator as it is. Estimated cost: $70,000, mainly analyst time to extract remittance data and build the new file. Advantage: meets the April 2026 enforcement date. Disadvantage: patients still cannot find 38 of the 100 services they most often search for, and the attestation places personal accountability on a senior official for a file that relies on manual extraction each year.

Option 2: full compliance plus a usable estimator. Everything in Option 1, plus automate the remittance data extraction, and expand the estimator to cover the 100 most-searched services and to show an out-of-pocket estimate for insured patients. Estimated cost: $185,000 in the first year and $40,000 a year after. Advantage: sustainable compliance and a tool patients can use. Disadvantage: higher cost and a four-month build that must begin in February to meet April.

Option 3: replace percentage-based contract terms at renewal. Renegotiate the five contracts to fixed rates over the next two years, which would make the file simpler and more meaningful. Cost: uncertain; depends on negotiations. Advantage: addresses the root of the problem. Disadvantage: cannot be done before April 2026 and may cost revenue.

Recommendation

Adopt Option 2 now and pursue Option 3 as contracts come up for renewal. Option 2 meets the enforcement date, reduces the risk carried by the attesting official, and addresses the finding that posting prices is not the same as making them usable. The first-year cost is less than a third of the potential annual penalty. The decision requested from the board is approval of the $185,000 first-year budget at the February meeting. If the board prefers Option 1, the file will still be compliant in April, and the estimator expansion can return as a separate request in the next budget cycle. The hospital is composite; the rules cited are current as published.

References

Centers for Medicare & Medicaid Services. (2019). Medicare and Medicaid programs: CY 2020 hospital outpatient PPS policy changes and payment rates and ambulatory surgical center payment system policy changes and payment rates. Price transparency requirements for hospitals to make standard charges public. Federal Register, 84, 65524. https://www.federalregister.gov/d/2019-24931

Centers for Medicare & Medicaid Services. (2025). Medicare program: Hospital outpatient prospective payment and ambulatory surgical center payment systems; quality reporting programs; overall hospital quality star rating; hospital price transparency; and notice of closure of a teaching hospital and opportunity to apply for available slots. Federal Register, 90, 53448. https://www.federalregister.gov/d/2025-20907

Jiang, J. X., Polsky, D., Littlejohn, J., Wang, Y., Zare, H., & Bai, G. (2022). Factors associated with compliance to the hospital price transparency final rule: A national landscape study. Journal of General Internal Medicine, 37(14), 3577-3584. https://doi.org/10.1007/s11606-021-07237-y

Thomas, M., Flaherty, J., Wang, J., Henderson, M., Ho, V., Cuban, M., & Cram, P. (2023). Comparison of hospital online price and telephone price for shoppable services. JAMA Internal Medicine, 183(11), 1214-1219. https://doi.org/10.1001/jamainternmed.2023.4753