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HB 6116

Health facilities: hospitals; hospital cost review board act; establish. Creates new act. TIE BAR WITH: HB 6117'26, HB 6118'26

2025-2026 Regular Session Introduced by Jay DeBoyer and 2 co-sponsors

Creates a Hospital Cost Review Board to regulate nonprofit hospital pricing, costs, reporting, and require price reductions, payer uniform increases, and grants for losses.

bill electronically reproduced 06/18/2026
#healthfacilities:hospitals #stateagencies(existing):licensingandregulatoryaffairs #stateagencies(proposed):boardsandcommissions
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Bill Summary · HB 6116

Overview

House Bill 6116 (Michigan, 2025-2026) creates the Hospital Cost Review Board and establishes a framework to regulate nonprofit hospitals’ pricing, costs, and financial reporting. It also authorizes grants and an assessment mechanism funded into a health care cost reduction fund. The act ties in with HB 6117 and HB 6118, and takes effect only if those companion bills are enacted.

Main purpose and intent

  • Establish a codified Hospital Cost Review Board within the Department to oversee nonprofit hospitals’ financial performance, pricing practices, and cost containment.
  • Promote transparency in hospital finances and costs.
  • Provide targeted grants to qualified hospitals facing unsustainable losses.
  • Impose an assessment on nonprofit hospitals to fund the cost reduction initiatives and grants.

Key provisions and changes

Creation and structure

  • Establishes the Hospital Cost Review Board (Sec. 5):
    • 5 members appointed by the Governor and legislative leaders (with both majority and minority party appointments).
    • Qualifications: expertise in health care policy, finance, accounting, or related fields; must be impartial.
    • Terms: initial terms staggered (2-year for some appointees; 4-year for others); then 4-year terms.
    • Meetings, quorums, and open meetings compliance; confidentiality protections for confidential business information.
    • No compensation for board members, but reimbursement for expenses.

Scope and definitions

  • Defines key terms: health facility, health service, nonprofit hospital, third-party payer, prosperity region, qualified hospital, etc.
  • Focuses on nonprofit hospitals that are tax-exempt and operate in Michigan.

Reporting and data submission (Sec. 7, Sec. 9)

  • Beginning January 1, 2027, nonprofit hospitals must annually submit comprehensive information to the board, including:
    • Financials: expenditures, operating costs, revenues, assets, liabilities, payer payments and rates, labor costs, Medicare/Medicaid cost reports, Form 990, and tax exemption details (property, sales/use, income tax exemptions, etc.).
    • Operational data: service scope, volumes, utilization, bed counts, ownership of other facilities, capital investments, and mergers/expenditures.
    • Tax exemption estimates and methodology.
    • An audited financial statement (due within 30 days after finalization, starting 2027).
    • Any explanations for year-over-year changes in costs or rates, including drivers (device/drug costs, labor, etc.).
    • Data must be submitted in a manner and form designated by the board.

Price and rate regulation (Sec. 11, 13, 15)

  • Total price increases for all health services must be uniformly applied to all third-party payers and must be justified by increased costs, with certain exceptions for qualified third-party payers. Inflationary cap: total price increases cannot exceed the rate of inflation (CPI for Detroit area, as determined by the department).
  • Individual price increases for specific services charged to payers must be justified by increased costs, with the same CPI cap.
  • Price increase restrictions do not apply to qualified third-party payers.
  • Section 17 allows existing contracts to temporarily override these requirements until they expire.

Enforcement and remedies (Sec. 12)

  • If the board determines a hospital violated price increase provisions, it must notify the hospital within 30 days and attempt informal resolution first.
  • If unresolved, the board may initiate a hearing (contested case under the Administrative Procedures Act).
  • If violations are confirmed, the board can issue an order imposing an assessment equal to the estimated value of the hospital’s tax exemptions reported to the board.
  • Orders are subject to judicial review.

Price reductions and compliance timeline (Sec. 13)

  • Within 14 days of enactment, nonprofit hospitals must reduce total prices for health services by 10% (uniformly across payers), with adjustments not applying to qualified third-party payers.
  • Within 120 days, hospitals must submit documentation verifying pricing reductions and compliance.

Patient charge limits (Sec. 15)

  • Limits patient charges:
    • If third-party payer does not pay: no more than 150% of Medicare payment for the service.
    • If third-party payer pays: no more than 200% of Medicare payment.
  • This section may be limited by existing Medicare data (Sec. 17).

Grants and incentives (Sec. 21)

  • A Health Care Cost Grant Program is created to support qualified hospitals with unsustainable losses (defined as negative operating profit margin of at least 3% for 3 consecutive years without clear signs of recovery).
  • Grants prioritized by factors including patient volume, service uniqueness and geographic impact, size/duration of losses, likelihood of preventing closure, and likelihood of return to sustainability without a grant.
  • Conditions to receive grants:
    • No transfer of grant to other providers.
    • Enter into a performance improvement agreement with the board (may include benchmarks).
    • Provide information on grant impact on operating losses.

Reporting to the legislature (Sec. 23)

  • Annually by April 1, the board must report:
    • Details of grants, performance agreements, and grant impacts.
    • Violations of price increase provisions by hospital systems.
    • Total price increases and justifications by hospital system.
    • Market share of hospital beds by region and state.
    • Capital expenditures by hospital system.
  • The Department must post the report publicly online.

Rules and implementation (Sec. 25)

  • The board will promulgate rules to implement the act, including submission schedules and uniform criteria.

Who would be affected

  • nonprofit hospitals in Michigan (primary impact: pricing, reporting, and potential assessments).
  • health systems and hospital networks operating multiple facilities (tracking by system-wide data and market share).
  • state departments (Health and Human Services, Insurance and Financial Services) required to cooperate with the board.
  • patients and payers (via price moderation, caps on patient charges, and increased transparency).
  • qualified hospitals in need of grant assistance (potentially rural/critical access hospitals).

Procedural and timeline aspects

  • Effective date contingent on enactment of HB 6117 and HB 6118.
  • First governor-appointed board members to be in place within 90 days of enactment.
  • Initial terms span 2 or 4 years; subsequent terms are 4 years.
  • Data submission begins January 1, 2027; audited statements due 30 days after finalization.
  • Immediate price-reduction requirement (10% cut) within 14 days of enactment, with 120-day documentation deadline for verification.
  • Regular annual reporting to the legislature by April 1 each year.

Potential considerations

  • Financial impact on nonprofit hospitals due to mandated price reductions and uniform rate increases across payers.
  • Administrative burden of extensive annual reporting and audited statements.
  • Mechanisms for disputes and enforcement (informal resolution and contested hearings).
  • Funding adequacy of the Health Care Cost Reduction Fund through hospital assessments.
  • Clarity on interaction with existing state and federal payment programs and contract terms.

Compiled from official sources — confirm details with the bill’s official record.

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