Holy Cross Hospital, DAB CR6830 (2026)

DECISION

Respondent, Holy Cross Hospital, 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 $4,230 per day for 77 days from June 21, 2023 through September 5, 2023, totaling $325,710. 

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 amount of the CMP imposed is not reasonable.

I.       Background and Procedural History

On October 5, 2023, Respondent requested a hearing to contest the CMP imposed by CMS. 

The Acknowledgement and Prehearing Order, along with the Civil Remedies Division (CRD) Procedures, was issued on October 12, 2023.

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On December 11, 2023, Respondent filed a brief (R. Br.) and 13 exhibits (R. Exs. 1-13).  CMS timely filed a prehearing exchange (CMS Br.), along with six exhibits (CMS Exs. 1-6) on February 9, 2024.  

On March 8, 2024, Respondent filed a reply brief with an additional exhibit, R. Ex. 14.  Various motions to strike and requests for discovery followed.  Respondent filed an additional exhibit on April 3, 2024, R. Ex. 15.  On April 30, 2024, Administrative Law Judge (ALJ) Tannisha Bell held a prehearing conference.  In her order following the conference, Judge Bell instructed the parties to conduct discovery and denied the motion to strike.  Judge Bell also asked the parties to confirm whether or not a hearing was still necessary.  On July 19, 2024, Respondent filed a supplement to its prehearing brief (R. Supp.).  Discovery was eventually completed, and Respondent filed two additional exhibits (R. Exs. 15-16).1  Respondent also indicated in its filings that it no longer believed an oral hearing was necessary, and CMS did not make an affirmative request to cross-examine any witnesses pursuant to the October 12, 2023 Acknowledgement Order.  Departmental Appeals Board Electronic Filing System (DAB E-File) doc. # 33 at 1.  As a result, I find that this matter can be decided on the written record.2

II.    Admission of Exhibits and Decision on the Written Record

Absent objections, R. Exs. 1-16 and CMS Exs. 1-6 are admitted into evidence. 

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)3; 45 C.F.R. §§ 150.405, 150.417, 180.100.

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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

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U.S. Department of Health and Human Services (HHS) with the authority to codify the “standard charges” that hospitals are required 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)  Gross charge
2)  Payer-specific negotiated charge
3)  De-identified minimum negotiated charge
4)  De-identified maximum negotiated charge
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 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 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. Respondent is a 423-bed hospital4 located in Maryland.  R. Ex. 5; R. Ex. 14 at 7.

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2. On May 11, 2023, CMS conducted a review of Respondent’s public website5 and was unable to find a machine-readable file containing a complete list of standard charges for all items and services provided by the hospital.  CMS Ex. 1.  The reviewer noted that the downloaded machine-readable file of standard charges only listed the codes, description of item / service, and unit charge amount.  CMS Ex. 1 at 6.  The file did not contain the payer-specific negotiated charge, de-identified minimum negotiated charge, de-identified maximum negotiated charge, and discounted cash price.  Id.  The reviewer was unable to find any other machine-readable files on Respondent’s website.  Id. at 7.
3. By notice6 dated June 22, 2023, 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.  R. Ex. 4.  The notice also informed Respondent that it could submit a corrective action plan within 45 days.  Id. at 3.  CMS requested Respondent acknowledge receipt of the notice within five business days.  Id. at 4.
4. CMS had not received any acknowledgement of the notice letter from Respondent by July 10, 2023.  As a result, CMS attempted to contact Respondent via telephone by calling the number on the website.  CMS Ex. 2.  CMS was unable to leave a voice mail or speak with the CEO.  Id.
5. Respondent did not submit a corrective action plan.  As result, CMS conducted another review of Respondent’s website on August 10, 2023.  CMS Ex. 3.  CMS again determined that Respondent failed to make public a machine-readable file containing a list of all standard charges.  Id.  During the review, CMS attempted to confirm the Respondent’s CEO’s email address by calling the hospital but was unsuccessful.  Id.

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6. On September 5, 2023, CMS issued a Hospital Price Transparency Notice of Imposition of a Civil Monetary Penalty imposing a $325,710 CMP for Respondent’s alleged noncompliance from June 21, 2023 to September 5, 2023.  R. Ex. 5.  The letter was sent via FedEx with confirmed delivery received on September 6, 2023.  CMS Ex. 4.  The letter was signed for by the same person who signed for the initial June 22, 2023 notice letter.  Id.; R. Ex. 12.
7. Respondent emailed the Hospital Price Transparency inbox on September 7, 2023 and acknowledged receipt of the CMP letter.  R. Ex. 13.  Respondent indicated in its email that it had not received the June 22, 2023 notice letter and requested a copy.  Id.  CMS responded by providing a copy of the notice letter and a copy of the delivery confirmation.  CMS Ex. 5.
8. On September 12, 2023, Respondent submitted a corrective action plan to CMS.  CMS Ex. 6.  On September 13, 2023, CMS sent a letter to Respondent stating that the deficiencies had been corrected.  R. Ex. 6.  

 VII.  Analysis and Conclusions of Law

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.  Respondent argues that it was compliant with Maryland’s demonstration program where all third parties pay the same rate.  R. Br. at 4.  Respondent states that CMS is fully aware of Maryland’s unique structure, and therefore, a hospital’s machine-readable file should have a null set for a lot of the data elements.  Id. at 5.  However, as CMS points out the hospital services under Maryland law and the items and services under CMS’s HPT regulations are not an exact match.  CMS Br. at 14.  As a result, it is fair to conclude that there are items and services for which the Maryland commission did not set a rate and for which should have been included in Respondent’s machine-readable file.  Further, when Respondent filed its response to CMS’s CMP letter, it stated that the chargemaster file on the website was outdated and that it updated the website to reflect the proper machine-readable file.  CMS Ex. 6 at 2.   Therefore, Respondent was noncompliant with price transparency requirements by having an outdated machine-readable file containing a list of all standard charges for services.

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Respondent next argues that CMS violated its due process rights by not sending the CAP letter and the CMP letter to its authorized agents in the PECOS system.  R. Br. at 9.  However, the PECOS system is a different regulatory process than the HPT process.  As a result, CMS is not required to utilize information from its Medicare enrollment system to send notices under its HPT program.  45 C.F.R. § 180.90(b) states that CMS must provide written notice of a CMP imposition via certified mail or another form of traceable carrier.  In response, Respondent argues that this process is unfair and results in packages lost in mailrooms.  R. Br. at 9-10.  However, CMS sent the CAP notice letter and the CMP notice letter via the same method to the same contact person and the CMP notice letter was received and quickly responded to by Respondent.  As a result,  I find that CMS properly provided written notice under the regulation.  To the extent Respondent is arguing that the regulatory framework is unfair, I have no authority to consider such actions either as a request for equitable relief or as a constitutional due process challenge.  45 C.F.R. § 150.403; see Ilya Kogan, DAB No. 3034 at 6 (2021).  

2. The $4,230 per day CMP is not reasonable.

Because I have determined that CMS had a basis to impose a CMP, I must now determine if the imposed CMP is reasonable.  45 C.F.R. § 150.417(a).  For a hospital with at least 31 beds and up to and including 550 beds, the maximum daily dollar civil money penalty amount is the number of beds times $10.  45 C.F.R. § 180.90(c)(2)(ii)(B).  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 $325,710 CMP, assessing the maximum per day penalty from June 21, 2023, the date when the violation was first observed, through September 5, 2023, the date of the CMP notice letter.  R. Ex. 5.

An 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 so long as that factor is identified in the subpart.  45 C.F.R. § 150.417(b)(2). 

Amount of the CMP

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

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(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.   
(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. Dept. of Health & Hum. Servs., 619 F.3d 453, 457 (5th Cir. 2010).

CMS has not indicated that it considered any of the above factors in determining that the maximum $4,230 CMP per day is appropriate.  Respondent does not make any arguments regarding the financial impacts of the CMP.  Per the regulations, CMS should also 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

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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); but see Coquina Ctr., DAB No. 1860 (2002); Cmty. Nursing Home, DAB No. 1807 (2002) (explaining in the skilled nursing facility (SNF) enforcement context that placing the burden on SNFs to show that a CMP is unreasonable is based on a “careful review of the statute, regulations and the preamble to the regulations at 42 C.F.R. Part 488”).  Based on Respondent’s previous record of compliance, the fact that Respondent had some of the required information posted on its website, Respondent’s quick correction of its error when it received the CMP notice letter, and CMS’s silence regarding the consideration given to these factors, I find that the imposed CMP is unreasonable and a reduction is appropriate.  Based on the facts and evidence provided, I find that a CMP of $5 per bed per day 7 is appropriate in this case.  

Respondent argues that the hospital took affirmative steps to understand the requirements and correct deficiencies while continuing to argue that notice was improper and that it complied with Maryland law.  However, this does not excuse Respondent’s failure to have the proper documents on its website.  CMS has provided proof that both the CAP notice letter and the CMP notice were received by Respondent’s staff.  The record supports CMS’s contention that it attempted to contact Respondent multiple times outside of the notice letters and that nothing additional was required on CMS’s part regarding service.  If Respondent’s staff had responded to the CAP notice letter or the multiple phone calls from CMS, the issue may have been resolved before a CMP was ever imposed. 

Because the CMP has been upheld in part, CMS should “issue a modified notice of imposition of [the CMP] to conform to the adjudicated finding.”  45 C.F.R. § 180.90(b)(3), (e)(2)(iii). 

Lastly, in a supplement to its pre-hearing brief, the Respondent points to two Supreme Court cases – SEC v. Jarkesy, 603 U.S. 109 (2024) and Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024).  Respondent asserts that, based on Jarkesy, I have no authority to hear this appeal; the Seventh Amendment to the Constitution mandates that the respondent hospital is entitled to a trial by jury.  Respondent also claims that, based on Loper Bright, CMS’s regulations exceeded the agency’s statutory authority to require that hospitals publish lists of standard charges for items and services provided.  R. Supp. 

An administrative law judge is bound by the statute and regulations and has no authority to invalidate those provisions based on constitutional challenges.  45 C.F.R. § 150.403; see Ilya Kogan, DAB No. 3034 at 6 (2021); Funmilola Mary Taiwo, DAB No. 2995 at 9-

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10 (2020); Donna Rogers, DAB No. 2381 at 5 (2011); Susan Malady, R.N., DAB No. 1816 at 4 (2002). 

But, even if I could consider the issue, I doubt that either of these cases applies to CMPs imposed under the price transparency statute.  Jarkesy applies only if the CMP imposed is punitive, rather than remedial.  Review of the statute and regulations shows that their purpose is to induce hospitals to publish the required price transparency information.  CMS’s actions underscore its commitment to that purpose.  It delayed imposing CMPs at all to give hospitals ample time to comply, emphasizing that hospitals would “have the opportunity to take corrective action prior to the imposition of a penalty.”  84 Fed. Reg. 65,524, 65,588 (Nov. 27, 2019).  CMS explicitly set a CMP amount that was “reasonable and sufficient to ensure hospitals’ compliance with the proposed requirements to make public standard charges.”  See Id. at 65,587 (emphasis added). 

Nor do I agree that Loper Bright invalidates regulations drafted in response to an express delegation from Congress.  That decision recognized that “when a particular statute delegates authority to an agency consistent with constitutional limits, courts must respect the delegation, while ensuring the agency acts within it.”  Loper, 603 U.S. at 413; see Figueroa v. Sec’y of HHS, No. 8:23-cv-2236-SPF, 2025 WL 2337297 at 4-5 (M.D. Fla. 2025) and cases cited therein. 

But these are issues for another tribunal. 

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 $325,710 CMP is unreasonable based on the facts and circumstances of this case.  Therefore, the amount for the per day CMP has been reduced to $2,115, totaling $162,855.