Your Hospital’s Rates Changed This Year. Do You Know by How Much?

With three full years of Transparency in Coverage (TiC) filings now available, it’s possible for the first time to track how negotiated commercial rates change over time. These changes are not estimated or modeled but observed directly by comparing the same payer’s published rates from one year to the next.

Using United Healthcare’s machine-readable files for its National POS Choice Plus plan, we compared negotiated inpatient rates across April 2023, July 2024, and August 2025 for a basket of 48 high-utilization MS-DRG codes matched to hospitals nationwide. The approach is straightforward: align the files on all available fields and compare only the negotiated rate. This creates a clean, like-for-like view of how rates change over time, without relying on contracts, formulas, or assumptions about how those rates were derived. For example, if United Healthcare (UHC) reports $130 for a provider’s service in 2024 and $140 under the same terms in 2025, the difference speaks for itself.

What the Data Shows

Nationally, from 2023 to 2024, hospitals received an average rate increase of 4.4 percent across this code basket. The distribution (Exhibit 1) is broadly as expected, centered a few points above zero, with one important exception: the largest spike is at zero percent, meaning more codes went unchanged than received any particular adjustment. We assume most hospitals renegotiate on roughly an annual cycle, but a zero outcome could mean the payer offered no increase, the renegotiation hadn’t happened yet, or the file simply wasn’t updated. The analysis cannot distinguish between these explanations; still, the overall pattern aligns with how these negotiations typically unfold.

Exhibit 1 — Distribution of code-level rate adjustments, 2023 to 2024. United Healthcare National POS Choice Plus Plan.

From 2024 to 2025, the distribution shifted (Exhibit 2). The average rate change dropped to 3.1 percent, and notably, more codes showed rate reductions — something largely absent in the prior year. Who received those reductions, and whether they were concentrated among higher-priced facilities, is an open question worth exploring.

Exhibit 2 — Distribution of code-level rate adjustments, 2024 to 2025. United Healthcare National POS Choice Plus Plan.

When grouped by hospital and averaged across the full code basket, the pattern is similar: hospitals saw an average increase of about 3.3 percent from 2024 to 2025.

Benchmarking the Rates

There is understandable skepticism about whether negotiated rates in these files reflect anything real. One way to test that is to benchmark them against Medicare. Commercial inpatient DRG rates are often structured similarly to Medicare’s, with a formula that includes a base rate multiplied by the DRG weight. If that structure holds, rates should resolve to a consistent percentage of Medicare across codes for a given hospital.

That is exactly what we find. In the below example for one hospital, every code in the 2024 file priced out to 196 percent of the corresponding Medicare rate (Exhibit 3). This consistency across dozens of codes, each with different dollar amounts and DRG weights, provides strong evidence that these rates reflect an actual contractual arrangement, not noise.

Exhibit 3 — Rate adjustments by MS-DRG code for a single hospital, 2023 to 2024

A year later, the same hospital’s rates increase to 201 percent of the 2025 Medicare rate (Exhibit 4), an average gain of 4.7 percent. This shift is notable in the context of Medicare’s own update cycle. Each year, CMS publishes an IPPS final rule that includes a market basket update, effectively an inflation adjustment. For FY 2025, that update was 3.4 percent, meaning Medicare rates themselves increased. If the hospital’s commercial rates had simply tracked that adjustment, they would have remained at 196 percent. Instead, they rose to 201 percent, indicating that the hospital negotiated an increase above the underlying Medicare update. That is a meaningful distinction that this kind of longitudinal view makes visible.

Exhibit 4 — Same hospital, 2024 to 2025

It Varies by Market

National averages tell only part of the story. When we examined rate adjustments by metropolitan area, the variation across markets was substantial (Exhibit 5).

Exhibit 5 — Hospital-level rate adjustments across six major metros, 2024 to 2025. United Healthcare National POS Choice Plus Plan.

Chicago-area hospitals collectively averaged an adjustment near zero from UHC, while New York-area hospitals averaged 6.6 percent. Context may help explain the difference. UHC is not a dominant payer in Chicago, where Blue Cross Blue Shield of Illinois holds that position, so leverage dynamics differ from markets where UHC has a larger footprint or where payer competition is more balanced. Within each market, adjustments are also far from uniform, with some hospitals receiving increases well above the local average and others well below.

The compounding effect of these differences is worth considering. A hospital that consistently receives smaller rate increases than its local peers isn’t just earning less today — it is falling further behind over time in a way that affects everything from provider compensation to capital investment.

What This Opens Up

Decades of health economics research have examined the dynamics of hospital pricing, payer-provider negotiations, and market concentration. This data builds on that foundation by making it possible to observe how rates evolve over time within a single payer’s published files.

The ability to observe rate changes over time opens the door to questions that were previously difficult to answer empirically. Are commercial rates across hospitals converging toward a market mean, as some predicted transparency mandates would encourage? Or are the highest-paid systems maintaining or extending their advantage? How do rate dynamics differ by payer, by market structure, by system size? This analysis begins to provide a framework for that kind of inquiry, and there is considerably more to explore.

For hospitals specifically, the practical implications are worth paying attention to. Understanding how your rates are changing relative to your market — not just where they stand in a single snapshot — is a different kind of intelligence. It is the kind of thing that informs forecasting when you haven’t yet had your annual conversation with a payer, or that provides context when the adjustment you’re offered doesn’t align with what the rest of the market is receiving.

This analysis focuses on one slice, inpatient DRG-based rates, but the same methodology extends to outpatient services, revenue codes, and other rate structures. The data is there. The question is what you do with it.

For more information or to discuss these findings, contact alex@thirdhorizon.com.