Agreement allows consumers reviewing the hospital rankings to consider that ranked hospitals provide U.S. News revenue before making important health decisions
SAN FRANCISCO (September 4, 2025) — San Francisco City Attorney David Chiu today announced that his office secured a settlement that requires U.S. News & World Report to disclose on its website that hospitals included in its hospital rankings pay U.S. News and the ways the company receives those funds. U.S. News also published the City Attorney’s op-ed outlining concerns over U.S. News’s ranking methodology. The City Attorney launched an investigation into U.S. News in 2023 after discovering it accepts payments from the entities it endorses without disclosing those financial links.
“Consumers use these hospital rankings to make consequential health care decisions, but at the outset of our investigation the company did not disclose as required by U.S. law that it received payments from the hospitals it ranked, including licensing fees for permission to display a ‘Best Hospitals’ badge,” said City Attorney Chiu. “My office is committed to defending consumers’ best interests, so I’m glad we were able to reach a settlement that ensures greater transparency in U.S. News’s financial disclosures.”
Background
The City Attorney’s Office discovered in 2023 that U.S. News accepts payments from the entities it endorses without disclosing those financial links. In order to prevent the public from being misled, Federal Trade Commission regulations interpreting the Federal Trade Commission Act require disclosure. U.S. News receives revenue from hospitals including through licensing fees to use its “Best Hospitals” badges, subscriptions to access the granular data underpinning the rankings, advertising on U.S. News’s website and in the Best Hospitals Guidebook, and payments for “Featured Hospital” placement. This funding is significant, with at least one hospital acknowledging that it paid U.S. News $42,000 to use the “best hospitals” badge for one year.
U.S. News markets itself as an expert on ranking hospitals. It claims it is “the global authority in hospital rankings” and has been “helping patients and families find the best healthcare for more than 30 years.”
U.S. News’s hospital rankings affect many people’s healthcare decisions, including Californians. The company claims that more than 40 million people visit its website every month, with others buying its annual Best Hospitals Guidebook. Health experts around the country have questioned whether—contrary to the company’s representations of authority—U.S. News’s hospital ranking methodology is misleading patients and warping the health care system to the detriment of poorer, sicker, and more diverse patients.
The impact of U.S. News’s representations about its hospital rankings on Californians, along with the undisclosed financial ties to the hospitals that U.S. News ranks, led City Attorney Chiu to initiate an investigation in June 2023 into potential violations of California law. California’s Unfair Competition Law (UCL) prohibits unlawful, unfair, and fraudulent business practices as well as unfair, deceptive, untrue, or misleading advertising. Certain city attorneys in California, including the San Francisco City Attorney, can send subpoenas or letters of inquiry and file lawsuits on behalf of the People of the State of California to protect consumers and ensure fair competition among businesses.
In response to the City Attorney’s letter sent in June 2023, the company did not respond to the reasonable questions about potentially misleading consumers, and it refused to address the payments it receives from hospitals the company ranks. As a result, City Attorney Chiu sent two subpoenas to U.S. News in January 2024 to obtain the necessary information about the company’s potential violations of California consumer protection laws.
The day before the deadline to respond to the subpoenas, U.S. News preemptively filed a lawsuit and preliminary injunction motion claiming that this legitimate government investigation into potential unlawful business practices violated the company’s First Amendment rights.
In May 2024, the U.S. District Court for the Northern District of California denied U.S. News’s request for a preliminary injunction, dismissed all claims against the City Attorney, and granted the City Attorney’s anti-SLAPP motion to strike.
On April 25, 2025, the parties entered a Settlement Agreement requiring U.S. News, within 30 days, to include a disclaimer on its Best Hospitals home page and the webpages containing lists of hospital rankings that states that it may earn revenue from some hospitals. The disclaimer links to a disclosure webpage which includes a description of the U.S. News revenue model, including ways that hospitals may provide revenue to U.S. News. U.S. News also agreed to publish an op-ed by the City Attorney.
City Attorney’s Office employees Rhonda Andrew, George Cothran, Katie Dunn, Sara Eisenberg, John George, Miguel Gradilla, Sarah Gutierrez, Nancy Harris, Martina Hassett, Christine Hoang, Alexander Holtzman, David Louk, Yvonne Meré, Bianca Rojo, Claire Skogsberg, Tara Steeley, and Karun Tilak worked on this matter to defend consumers’ best interests.
The City Attorney’s op-ed published on August 30, 2025, can be found here.
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