Health Law Daily Wrap Up, CIVIL MONEY PENALTIES—DAB DECISIONS: Failure to post machine-readable file listing standard charges lead to imposition of CMP, (May 27, 2026)

By Jeffrey H. Brochin, J.D.

Although Hospital was not in compliance with requirements for making public a list of the hospital’s standard charges for items and services provided, the financial and other impacts on individuals was minimal, leading to a reduction in CMP.

The HHS Departmental Appeals Board, Civil Remedies Division (Board) has ruled that although CMS had a legal basis to impose a CMP against Hospital General Castaner (Respondent or Hospital) due to violations of the Hospital Price Transparency Act, the imposed CMP of $101,400 was not reasonable and was therefore reduced to $33,800 (Hospital General Castaner, DAB No. CR6818, Doc. No. C-23-774 (Jan. 26, 2026)).

Hospital Price Transparency Act. In 2010, as part of the Patient Protection and Affordable Care Act (ACA) (P.L. 111–148), Congress enacted section 2718 of the Public Health Services Act (PHS Act), entitled “Bringing down the cost of health care coverage.” That section required each hospital operating in the United States to establish (and update) and make public a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups. The PHS Act provided HHS with the authority to codify the “standard charges” that hospitals are required to publish.

A standard charge is the regular rate established by the hospital for an item or service provided to a specific group of patients, including: (1) Gross charge, (2) Payer-specific negotiated charge; (3) De-identified minimum negotiated charge; (4) De-identified maximum negotiated charge; and (5) Discounted cash price. To comply with transparency requirements, a hospital must make public a machine-readable file containing a list of all standard charges for all items and services as provided in 45 C.F.R. §180.40(a). Hospitals must also make public a consumer-friendly list of standard charges for a limited set of shoppable services as provided in 45 C.F.R. §180.60.

Repeated searches for compliance. Hospital General Castaner is a 10-bed, rural hospital located in Puerto Rico. On September 19, 2022, CMS conducted a review of Respondent’s public website and was unable to find a machine-readable file containing a list of standard charges as required by the PHS. The reviewer noted that there was no search option on the website to search for specific terms. A more in-depth Google keyword search also found that no such file existed. By notice dated September 29, 2022, CMS notified Respondent of its failure to make public a machine-readable file. The letter also informed Respondent that the deficiency should be corrected within 90 days of the date of the notice and failure to comply could result in compliance actions. There was some uncertainty as to when the letter arrived at the Hospital, but it did not reach their Compliance Department until the last week of January 2023.

Notice of violation and request for CAP. CMS issued a “Hospital Price Transparency Notice of Violation and Request for Corrective Action Plan [CAP]” on March 10, 2023. Respondent submitted its first CAP on May 12, 2023, however that was not approved. Respondent submitted a second CAP on May 31, 2023, but that also was not approved. CMS sent a follow-up email on July 25, 2023, requesting that Respondent submit a new CAP immediately, and warned that this was Respondent’s final notice before it would take action imposing a CMP pursuant to 45 C.F.R. §180.90(a).

Yet again, on August 11, 2023, CMS conducted another review of Respondent’s website and again determined that there was no consumer-friendly list of standard charges. However, a machine-readable file was present, albeit with some deficiencies. On August 22, 2023, CMS issued a Hospital Price Transparency Notice of Imposition of a Civil Monetary Penalty imposing a $101,400 CMP for Respondent’s alleged noncompliance from September 19, 2022 to August 22, 2023. On April 26, 2024, CMS issued a Closure Notice indicating that Respondent corrected the deficiencies identified in the August 22, 2023 CMP notice. Presently before the Board were the issues of whether the imposition of the CMP was justified and whether the amount was reasonable.

CMS authorized to impose CMP. The Board found that CMS conducted several searches of Respondent’s public website and was unable to locate a comprehensive machine-readable file and a limited list of shoppable services. Respondent admitted that it was not fully compliant with price transparency requirements from September 29, 2022, through August 22, 2023, therefore, it was undisputed that Respondent was noncompliant with price transparency requirements by not having a machine-readable file and not making public a list of standard charges for services. Although Respondent noted that it had initially contracted with a web hosting company in 2021 to create the hospital’s webpage, and they increased the services in February 2023 to ensure compliance with the Hospital Price Transparency Act, they provided no evidence of the measures undertaken by the web hosting company. Accordingly, the Board concluded that CMS had a basis to assess a CMP against the Respondent pursuant to 45 C.F.R. §180.90(a).

Reasonableness of CMP amount. The Board next considered whether the amount of CMP imposed was reasonable. Among the factors to be considered when weighing reasonableness are the entity's previous record of compliance which may include any of the following: (1) Any history of prior violations by the responsible entity, including whether, at any time before determination of the current violation or violations, CMS or any state found the responsible entity liable for civil or administrative sanctions in connection with a violation of PHS Act requirements; (2) Documentation that the responsible entity has submitted its policy forms to CMS for compliance review; (3) Evidence that the responsible entity has never had a complaint for noncompliance with PHS Act requirements filed with a state or CMS; and (4) Such other factors as justice may require.

Here, the Board found that the Hospital had no history of prior violations or noncompliance with the Hospital Price Transparency Act. Furthermore, per the regulations, CMS should have considered the entity’s previous record of compliance and the gravity of the violation when imposing a CMP, however, CMS did not address either of those factors, nor did it indicate that those factors were considered in its determination to impose the highest possible CMP of $300 per day.

Minimal negative impact. Respondent made several arguments regarding the level of financial and other impacts on affected individuals, noting that in 2021, approximately 72.2 percent of its population were Medicaid beneficiaries or uninsured. In addition, the noncompliance did not affect or produce a negative impact on affected individuals because it provides services on a sliding scale. The Board agreed, finding that the level of financial and other impacts on affected individuals was minimal.

Based on the foregoing, the Board concluded that the imposition of a CMP was justified, however, the $101,400 CMP was unreasonable based on the facts and circumstances of the case, and the CMP was therefore reduced to $33,800.

AdministrativeDecisions: DABDecisions CMSNews CMPNews ProviderNews RuralNews