Federal judges signal support for hospital price disclosure rule

Judges for the U.S. Court of Appeals for the District of Columbia Circuit seemed likely Oct. 15 to uphold CMS’ rule that forces hospitals to disclose prices they negotiate with insurance companies, according to Bloomberg Law

Under a final rule issued in November, hospitals are required to disclose the standard charges, including payer-specific negotiated rates, for all services beginning next year. 

The American Hospital Association, Association of American Medical Colleges, Children’s Hospital Association and the Federation of American Hospitals sued HHS in December, arguing the department lacks statutory authority to require public disclosure of individually negotiated rates between commercial insurers and hospitals. HHS argued its definition of standard charges is permissible under a 2010 law enacted to lower the cost of healthcare coverage.

Both sides filed motions for summary judgment, and Judge Carl Nichols with the U.S. District Court for the District of Columbia granted HHS’ motion and denied the hospital groups’ motion on June 23. 

The AHA announced June 27 that it was appealing the decision. On appeal, the trade groups argue that CMS unlawfully expanded the definition of “standard charges” that hospitals must disclose under a provision in the ACA to include negotiated rates.

On Oct. 15, Judge David Tatel questioned why the plain language of the ACA doesn’t allow for the price disclosure rule. 

“Isn’t it perfectly reasonable for the government to interpret this statute so it promotes the maximum amount of disclosure?” he asked. 

Lisa Blatt, a lawyer representing the trade groups, argued that hospitals don’t know what patients will actually pay. 

“They don’t even know what insurance companies will actually pay, which the government concedes, because the actual payment at the end of the day is going to turn on variables about patient care,” Ms. Blatt said, according to Bloomberg Law

Ms. Blatt said hospitals don’t want to lie to patients about what they’ll owe. Judge Harry Edwards took issue with that argument. 

“But you’re lying to patients in suggesting the charge master rate is a rate,” Mr. Edwards said. “It’s not and there’s nothing that alerts the consumer when they see that charge master rate beware because any and everything below is possible.” 

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