Hospital General Castaner, DAB CR6818 (2026)

DECISION

Respondent, Hospital General Castaner, challenges the Centers for Medicare & Medicaid Services’ (CMS’s) determination of noncompliance with hospital price transparency requirements.  Respondent also challenges the imposition of a civil monetary penalty (CMP) of $300 per day for 338 days from September 19, 2022 through August 22, 2023, totaling $101,400. 

As explained below, CMS had a legal basis to impose a CMP against Respondent due to violations of the Hospital Price Transparency Act.  However, the imposed CMP is not reasonable and has been reduced. 

I. Background and Procedural History

On September 19, 2023, Respondent requested a hearing to contest the CMP imposed by CMS. 

The Acknowledgment and Prehearing Order, along with the Civil Remedies Division (CRD) Procedures, was issued on September 25, 2023. 

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On February 2, 2024, Respondent filed a brief (R. Br.) and 11 exhibits (R. Exs. 1-11)1.  On February 7 and 21, 2024, Respondent re-filed its exhibits to comply with my standing prehearing order. 

CMS timely filed a prehearing exchange with an incorporated motion for summary judgment (CMS Br.), along with six exhibits (CMS Exs. 1-6) on March 18, 2024. 

On May 3, 2024, Respondent submitted a notice, issued by CMS, stating that the deficiencies were abated. 

II. Admission of Exhibits and Decision on the Written Record

Absent objections, R. Exs. 1-11 and CMS Exs. 1-6 are admitted into evidence. 

Respondent identified four witnesses and provided their written direct testimony as R. Exs. 1-4. 

CMS did not identify witnesses, nor did it request to cross-examine Respondent’s witnesses.  Therefore, CMS’s motion for summary judgment is moot and this decision will be issued on the written record. 

III. Issues

1. Whether a basis exists for CMS to assess a CMP against the Respondent pursuant to 45 C.F.R. § 180.90(a); and
2. Whether the CMP imposed by CMS is reasonable pursuant to 45 C.F.R. §§ 180.90(c), 150.317.

IV. Jurisdiction

I have jurisdiction to hear and decide this case.  42 U.S.C. § 300gg-18(b)(3); 45 C.F.R. §§ 150.405, 150.417, 180.1002. 

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V. Legal Authorities

In 2010, as part of the Affordable Care Act, Congress enacted section 2718 of the Public Health Services Act (PHS Act), entitled “Bringing down the cost of health care coverage.”  42 U.S.C. § 300gg-18(e).  Section 2718(e) of the PHS Act, codified in 45 C.F.R. Part 180, requires 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 established under section 1886(d)(4) of the Social Security Act.  45 C.F.R. § 180.10.  The PHS Act provided the U.S. Department of Health and Human Services (HHS) with the authority to codify the “standard charges” that hospitals are required to publish.  45 C.F.R. Part 180. 

A standard charge is the regular rate established by the hospital for an item or service provided to a specific group of paying patients, including:  

1. 1) Gross charge
2. 2) Payer-specific negotiated charge
3. 3) De-identified minimum negotiated charge
4. 4) De-identified maximum negotiated charge
5. 5) Discounted cash price.

45 C.F.R. § 180.20. 

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.] § 180.50.”  45 C.F.R. § 180.40(a).  Hospitals must also make 

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public a “consumer-friendly list of standard charges for a limited set of shoppable services as provided in [45 C.F.R.] § 180.60.”  45 C.F.R. § 180.40(b). 

CMS may monitor and assess hospital compliance through the evaluation of complaints made by individuals or entities to CMS; reviewing individuals’ or entities’ analysis of noncompliance; audit and comprehensive review; requiring submission of certification by an authorized hospital official as to the accuracy and completeness of the standard charge information in the machine-readable filing; and requiring submission of additional documentation as may be necessary to make a determination of hospital compliance.  45 C.F.R. § 180.70(a)(2).  

If CMS concludes that a hospital is noncompliant with price transparency requirements, it may take the following actions:  provide a written warning notice to the hospital with the specific violations, of which the hospital must submit an acknowledgment of receipt; request a corrective action plan (CAP) from the hospital if its noncompliance constitutes a material violation of one or more requirements; and impose a CMP on the hospital and publicize the penalty on a CMS website if the hospital fails to respond to CMS’s request to submit a CAP or comply with the requirements of a CAP.  45 C.F.R. § 180.70(b).  

VI. Findings of Fact

1. Hospital General Castaner is a 10-bed, rural hospital3 located in the central mountainous region of Puerto Rico. Request for Hearing (RFH) at 1; R. Ex. 1 at 1 ¶ 2; CMS Ex. 3 at 6.
2. On September 19, 2022, CMS conducted a review of Respondent’s public website4 and was unable to find a machine-readable file containing a list of standard charges for all items and services provided by the hospital. CMS Ex. 1.  The reviewer noted that there was no search option on the website to search for specific terms.  CMS Ex. 1 at 2.  A reviewer, employed by CMS, conducted a Google search  for the following terms:  Hospital General Castaner; price transparency; machine-readable; machine readable; standard charges; chargemaster; charge master; CDM; price list; pricing; shoppable services; price estimator tool; estimate your costs; cost estimator; price estimate; cost; price; pricing; pricing tool; estimator; estimate; and consumer display.  CMS Ex. 1 at 2.  

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2. No relevant results were found.  The reviewer was unable to locate a shoppable services display or a price estimator tool on Respondent’s website.  CMS Ex. 1 at 2.
3. By notice dated September 29, 2022, CMS notified Respondent of its failure to make public a machine-readable file containing a list of all standard charges and a consumer-friendly list containing a list of all standard charges. CMS Ex. 2.  The letter also informed Respondent that the deficiency should be corrected within 90 days of the date of the notice and failure to comply may result in compliance actions.  CMS Ex. 2 at 4.  The notice was addressed to Robin Russell Orama, CEO of Hospital General Castaner, via certified mail.5  CMS Ex. 2 at 3.  Respondent is not certain of when the letter arrived at the hospital, but the Compliance Department received the letter during the last week of January 2023.  CMS Ex. 3 at 4.
4. CMS conducted another review of Respondent’s website on March 9, 2023. CMS Ex. 4 at 2.  CMS again determined that Respondent failed to make public a machine-readable file and a consumer-friendly list containing a list of all standard charges.  CMS Ex. 4 at 2.
5. CMS issued a Hospital Price Transparency Notice of Violation and Request for Corrective Action Plan on March 10, 2023. CMS Ex. 5.
6. On May 2, 2023, a CMS representative emailed Respondent copies of the September 29, 2022 Initial Warning Notice, and the Notice of Violation and Request for CAP dated March 10, 2023. RFH at 5.
7. Respondent submitted its first CAP on May 12, 2023. Ex. 2; RFH at 9.  The first CAP was not approved, and CMS requested that a new CAP be submitted within three business days.  CMS Ex. 3 at 5.  In response, Respondent submitted a second CAP on May 31, 2023.  R. Br. at 2; RFH at 11; CMS Ex. 3 at 5.  
8. On June 15, 2023, CMS issued a notice via email informing Respondent that the second CAP was not approved and directing Respondent to submit a new CAP within three business days. RFH at 15.
9. CMS sent a follow-up email on July 25, 2023, requesting that Respondent submit a new CAP immediately. CMS warned that this was Respondent’s final notice before it would take action (impose a CMP) pursuant to 45 C.F.R. § 180.90(a).  RFH at 16. 

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10. 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. CMS Ex. 6. However, a machine-readable file was present, albeit with some deficiencies.  CMS Ex. 6 at 6.
11. 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. RFH at 17-22.
12. CMS issued a Closure Notice on April 26, 2024, indicating that Respondent corrected the deficiencies identified in the August 22, 2023 CMP notice. DAB E-file Docket No. 11.

VII. Analysis and Conclusions of Law

1. 1. CMS was authorized to impose a civil monetary penalty.

CMS may impose a CMP on a hospital that is noncompliant and fails to respond to CMS’s request to submit a CAP or comply with the requirements of a CAP.  45 C.F.R. § 180.90(a).  Noncompliance includes a hospital’s failure to respond to CMS’s request to submit a CAP in a timely manner as outlined in the notice of violation issued by CMS and failure to correct violations within specific timeframes.  45 C.F.R. § 180.80(d).  

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.  Additionally, Respondent admitted that the hospital was not fully compliant with price transparency requirements from September 29, 2022 through August 22, 2023.  CMS Ex. 3 at 5.  Therefore, it is 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.  

Respondent notes that the hospital 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.  CMS Ex. 3 at 4.  However, Respondent has not provided evidence of the measures undertaken by the web hosting company.  Respondent also argues that it made honest efforts and intended to fully comply with the regulations, but hospital officials did not fully understand the technical requirements and believed that they complied prior to March 10, 2023, the date of the notice letter that was issued by CMS.  R. Br. at 3; CMS Ex. 3 at 4.  While I do not doubt that Respondent made honest efforts to comply, that does not negate Respondent’s noncompliance. 

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2. 2. The $300 per day CMP is unreasonable and must be reduced based on the facts and circumstances surrounding this case.

Because I have determined that CMS had a basis to impose a CMP, I must now determine if the imposed CMP is reasonable.  A hospital with 30 or fewer beds may incur a maximum CMP of $300 daily.  45 C.F.R. § 180.90(c)(2)(ii)(A).  The effective date for a CMP is the latest of the following dates:  the first day that the hospital is required to meet the Hospital Price Transparency regulations’ requirements; the date 12 months after the date of the hospital’s last annual update of its charges; or, a date determined by CMS, such as one resulting from monitoring activities or a hospital’s development of a CAP.  45 C.F.R. § 180.90(b)(2)(ii)(A)-(C).  Here, CMS imposed a $101,400 CMP, assessing the maximum $300 per day penalty from September 19, 2022, the date when the violation was first observed, through August 22, 2023, the date of the CMP notice letter.  RFH at 17-20. 

An administrative law judge (ALJ) may sustain, reduce, or increase the CMP imposed by CMS.  45 C.F.R. § 150.417(c).  In deciding the reasonableness of a CMP, an ALJ may consider the hospital’s posting(s) of its standard charges (if available); material the hospital timely previously submitted to CMS (including with respect to corrective actions and corrective action plans); and material CMS used to monitor and assess the hospital’s compliance according to section 180.70(a)(2).  45 C.F.R. §§ 180.100(b)(4), 150.417(b), 150.317, 150.323.  In addition, I am authorized to consider evidence of record relating to any factor that CMS did not apply in making its initial determination.  45 C.F.R. § 150.417(b)(2). 

Amount of the CMP

When determining the amount of a penalty CMS should consider the following:  

• (a) The entity's previous record of compliance.  This 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.

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• (4) Such other factors as justice may require.
• (b) The gravity of the violation.  This may include any of the following:
• (1) The frequency of the violation, taking into consideration whether any violation is an isolated occurrence, represents a pattern, or is widespread.
• (2) The level of financial and other impacts on affected individuals.
• (3) Other factors as justice may require.

45 C.F.R. § 150.317.  

In determining the reasonableness of the CMP, I am not bound to defer to CMS’s factual assertions, nor free to make a wholly independent choice of remedies without regard for CMS’s discretion.  See, e.g., Barn Hill Care Ctr., DAB No. 1848 at 21 (2002).  The Board has ruled that “[t]he determination of whether a CMP amount is reasonable is a conclusion of law, not a finding of fact.”  Cedar Lake Nursing Home, DAB No. 2344 at 12 (2010), aff’d, Cedar Lake Nursing Home v. U.S. Dep’t of Health & Hum. Servs., 619 F.3d 453, 457 (5th Cir. 2010).  

CMS argues that Respondent may not have willfully violated the regulations, but that does not provide a basis for relief.  CMS Br. at 13.  CMS has not indicated that it considered any of the above factors in determining that the maximum CMP of $300 per day is appropriate.  However, Respondent makes several arguments regarding the level of financial and other impacts on affected individuals.  Respondent argues that in 2021, approximately 72.2% of its population were Medicaid beneficiaries or uninsured.  R. Ex. 9.  According to Respondent, the noncompliance did not affect or produce a negative impact on affected individuals because it provides services on a sliding scale.  R. Br. at 3, 4.  Despite this, Respondent’s patients and potential patients have the right to know the cost of services upfront.  However, based on Respondent’s evidence, I find that the level of financial and other impacts on affected individuals is minimal.  

Respondent also argues that the Hospital has no history of prior violations or noncompliance with the Hospital Price Transparency Act.  R. Br. at 3.  I have no reason to doubt Respondent’s claim, and CMS has not provided evidence to the contrary.  Per the regulations, CMS should consider the entity’s previous record of compliance and the gravity of the violation when imposing a CMP.  CMS has not addressed either of these factors, nor has it indicated that these factors were considered in its determination to impose the highest possible CMP.  45 C.F.R. § 150.443 (providing that CMS has the burden of coming forward with evidence sufficient to establish a prima facie case and the burden of persuasion regarding facts material to the assessment).  Even if CMS were to 

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argue that these factors were considered, I still find Respondent’s arguments and evidence to be quite persuasive.  Based on Respondent’s previous record of compliance, the low gravity of this offense, and CMS’s silence regarding the consideration given to these factors, I find that the imposed CMP is unreasonable. 

Because I am authorized to consider the material that Respondent submitted timely to CMS, I find it necessary to consider factors that hampered Respondent’s ability to timely respond to CMS’s requests.  There were many delays in Respondent’s response to CMS due to internal matters at the hospital, which warrants the imposition of a CMP.  However, Respondent should not be penalized for the delays that were outside of its control. The most notable delays took place between the time when the Warning Notice and the Notice of Violation were issued and received.  CMS argues that Respondent was not harmed by the non-receipt because no adverse actions were taken at that time.  CMS Br. at 11.  I disagree, and frankly I am puzzled by CMS’s response.  The Warning Notice provided information on the specific deficiencies that Respondent would have had the opportunity to address prior to the Notice of Violation being issued, and it allotted 90 days to correct said deficiencies.  CMS Ex. 2 at 4.  However, Respondent did not get the benefit of those 90 days.  While Respondent does not know when the Warning Notice was delivered to the hospital, it is certain that the notice arrived in its Compliance Department sometime in late January 2023.  CMS Ex. 3 at 4.  Additionally, when CMS sends a Warning Notice, it must require that a hospital submit an acknowledgement of receipt of the warning notice in the form and manner, and by the deadline, specified in the notice of violation issued by CMS to the hospital.  45 C.F.R. § 180.70(b)(1).  In this case, CMS did not include language requiring acknowledgment of receipt in the warning notice sent to Respondent.  CMS Ex. 2.  Had CMS complied with the regulation, then failure to receive a receipt of acknowledgement would have been the first indication that Respondent had not received the correspondence. 

Similarly, Respondent did not receive the March 10, 2023 Notice of Violation until May 2, 2023.  CMS Ex. 3 at 4.  CMS argues “HGC’s claims of non-receipt, even if true, are irrelevant.”  CMS Br. at 10.  This response is again puzzling because we should not have to guess whether the claim of non-receipt is true as CMS allegedly sent the Warning Notice and the Notice of Violation via certified mail, which means that the agency can confirm the date of receipt for both mailings and its compliance with its service requirements, but has chosen not to do so.  See 45 C.F.R. § 180.90(b)(1) (“If CMS imposes a [CMP] . . . CMS provides a written notice . . . to the hospital via certified mail or another form of traceable carrier.”).  

I do not doubt that Respondent experienced delays in receiving both mailings due to its rural location.  Respondent notes that its service area is a “rough and steep mountainous area” where some of Puerto Rico’s highest mountains are located and that landslides are commonplace due to the mountainous terrain and frequent intense rainstorms.  R. Ex. 9 at 

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1.  The delays in receiving the Warning Notice and Notice of Violation directly impacted Respondent’s ability to timely respond to CMS and warrants a reduction in the CMP. 

Based on the facts and circumstances of this case, including the mitigating factors, I find that the imposed CMP is unreasonable, and that a reduction is necessary.  Here, the CMP will be reduced to $100 per day for 338 days for a total imposed CMP of $33,800.  

Respondent argues that the hospital took affirmative steps to understand the requirements and correct deficiencies after receiving each notification of noncompliance but notes that the hospital did not fully understand the requirements of the regulations until new guidelines were published in Summer 2023.  R. Br. at 3.  However, this does not explain why Respondent failed to contact and request guidance from CMS during the process.  This undoubtedly contributed to many of the delays that ensued. 

Respondent argues that the CMP is very burdensome for the size of the hospital’s operation.  R. Ex. 2 at 3 ¶ 26.  Though I sympathize with and understand Respondent’s request, to the extent that Respondent is requesting equitable relief, I do not have the authority to provide such.  It is well-settled that the Board and ALJs are bound by applicable statutes and regulations and are not authorized to provide equitable relief.  US Ultrasound, DAB No. 2302 at 8 (2010). 

It is worth noting that CMS has the authority to settle a case, before or after an ALJ issues a decision.  45 C.F.R. § 150.413.  Though I do not have the authority to direct the parties to settle this case, I would encourage CMS to consider doing so due to the size of the hospital, the delay in Respondent receiving the Warning Notice and Notice of Violation, and the impact of such a sizable fine on the hospital’s operations. 

Lastly, because the CMP has been upheld in part, CMS should issue a modified notice of imposition of the CMP to conform to the adjudicated findings.  45 C.F.R. § 180.90(b)(3), (e)(2)(iii). 

VIII. Conclusion

For the reasons set forth above, I have determined that a basis exists for CMS to impose a CMP against Respondent.  However, the $101,400 CMP is unreasonable based on the facts and circumstances of this case.  Therefore, the CMP has been reduced to $33,800.