Hospital Payment Cap Simulator
Center for Advancing Health Policy through Research, Brown University School of Public Health – Updated December 2024
Overview
This payment cap simulator can help estimate projected savings for price caps applied to state employee health plans.
The tool enables state-specific savings estimates based on payment cap levels ranging from 100% to 300% of Medicare and includes filters to customize the estimate to include or exclude large and/or urban and small and/or rural hospitals. The tool also shows the estimated impact on commercial hospital operating margins under different modeling scenarios.
Prices Paid to Hospitals by Private Health Plans: Findings from Round 5.1 of an Employer-Led Transparency Initiative
Christopher Whaley, Rose Kerber, Daniel Wang, Aaron Kofner, and Brian Briscombe
RAND – December 10, 2024
Overview
The RAND Hospital Price Transparency Study enables states to compare commercial hospital prices as a percentage of Medicare and model potential savings from price caps.
The study uses 2020–2022 medical claims data from a large population of privately insured individuals, including paid claims for hospitals and other facilities from across the United States, to allow an easy comparison of hospital prices. In addition to a report with findings, the study includes an accompanying dataset comparing hospital prices, including as a percentage of simulated Medicare payments (“relative price”). States can use these data to model potential savings from price caps by multiplying the simulated facility-specific Medicare allowed amounts for applicable hospitals by the proposed price cap amount; subtracting the result from the original facility-specific allowed amounts for inpatient and outpatient facility services gives a rough estimate of savings.
National Academy for State Health Policy (NASHP) Hospital Cost Tool
NASHP – 2022, updated 2025
Overview
The NASHP Hospital Cost Tool empowers states to better understand the financial metrics of their hospitals and the degree to which a hospital might be able to financially withstand state action on hospital commercial prices.
Details
The tool ingests data from Medicare Cost Reports, forms annually completed by all hospitals and other institutional providers that participate in the Medicare program, to produce easily understandable summaries of select cost report data. The Hospital Cost Tool couples these data with RAND relative price and NASHP-developed measures of hospital finances. States can use the NASHP Hospital Cost Tool to compare a hospital’s commercial break-even point – a value-added measure calculated by NASHP – to the most recent RAND relative price to understand the extent to which hospitals could cover their expenses with lower commercial prices.
States should note that the NASHP Hospital Cost Tool relies on data from the Medicare Cost Reports, which are a valuable source of standardized national hospital cost report data, but with limitations. For example, cost reporting is done at the facility level, not the health system level. For health system-owned facilities, therefore, revenue and costs that are associated with the parent corporation may or may not be represented on individual facility Medicare Cost Reports depending on corporate structures. The finances of hospital-owned practices are also not consistently represented in Medicare Cost Reports.
Hospital Audited Financial Statement Analysis Template
Peterson-Milbank Program for Sustainable Health Care Costs – April 3, 2024
This template supports state analysts in standardizing and analyzing hospital audited financial statements and calculating key financial metrics.
Details
The tool is a companion to Guide to Understanding Hospital Spending through Financial Analysis, developed by Manatt Health Strategies and Bailit Health with support from the Peterson-Milbank Program for Sustainable Health Care Costs.
The Hospital Financial Analysis Template includes step-by-step instructions for users working with tables extracted from hospital audited financial statements, including how to add raw data tables to the analysis template and how to standardize raw data using the categories provided. Once data are entered, the template automatically calculates key financial metrics. Support for interpreting results can be found in the Guide to Understanding Hospital Spending through Financial Analysis.
Hospital Price Cap and Price Growth Cap Modeling Template
Bailit Health – February 2026
This tool can be used to estimate potential savings from the implementation of price caps and/or price growth caps within a state or with a specific set of hospitals.
Details
Two versions of the tool – one pre-loaded with data from the RAND Hospital Price Transparency Study (Version 5.1; 2020-2022), the second with a template for adding state- or payer-specific Medicare repricing analyses – allow users to model a hospital price cap with cap levels defined by percentages of the amount Medicare would have paid the same facility. Additionally, the tool allows for modeling the impact of price growth caps, exemptions for some hospitals (e.g., critical access hospitals), and a glide path that gives hospitals multiple years to come into compliance.
The tool applies price caps at an aggregate level, comparing each facility’s total commercial payments (allowed amounts) included in the data sources and total simulated Medicare allowed amounts for the same set of services. As such, facilities with relative prices below the level of the cap are not impacted; a price cap implemented at the claim-level would impact all claims above the cap level, regardless of the facility’s aggregate relative price. All analyses for savings assume utilization is unchanged.