AHA, Others File Lawsuit to Block HHS Mandate Requiring Hospitals to Post Negotiated Rates

December 05, 2019

The American Hospital Association (AHA) was joined by the Association of American Medical Colleges, Children’s Hospital Association, and Federation of Hospitals in filing a lawsuit Dec. 4 to block a new federal requirement that hospitals post their proprietary rates negotiated with insurance companies. The requirement stemmed from a final rule published by the U.S. Department of Health & Human Services (HHS) on Nov. 15 that would require hospitals to post all negotiated rates for all health care services by Jan. 1, 2021. AHA’s suit asks for an immediate injunction stopping the reporting requirement while the suit is ongoing, arguing that the requirement is so extensive that hospitals would have to begin planning for implementation immediately to meet the deadline. The lawsuit challenges HHS’ authority to define a standard charge as a negotiated rate and raises the claim that such compelled disclosure is a violation of the First Amendment due to the requirement’s mandate of specific speech.

In the filing, the AHA notes that “America’s hospitals and health systems are committed to providing patients with the financial information they need to make informed decisions about their health care,” pointing out that HHS’ requirements could lead to patient confusion when out-of-pocket expenses differ from amounts disclosed under the rule due to coinsurance and deductible requirements. Additionally, the suit cites prior statements from the Federal Trade Commission suggesting that making proprietary rates public “would offer little benefit but could pose substantial risk of reducing competition in health care markets.” Instead, hospitals have called on HHS to bring together providers and insurers in a cooperative, voluntary fashion to help encourage how to best get patients the type of health care cost information that would be most meaningful.

While the lawsuit makes many of the provisions of the final rule uncertain, WHA is already exploring how it can assist Wisconsin hospitals in fulfilling whatever requirements eventually become law. For example, Wisconsin hospitals have posted price transparency information for more than 15 years on Wisconsin’s PricePoint website. The website already includes standard charges for many of the most-utilized health care services and allows consumers to compare all hospitals across the state. WHA is exploring what opportunities might exist in utilizing PricePoint to provide consumers even more meaningful information to better enable them to compare costs across hospitals. WHA is also finalizing its Transparency Task Force report, which will include best practices many Wisconsin hospitals already use voluntarily to provide consumers with meaningful cost information, including up-front cost estimates in advance of receiving planned health care services.

For more information, contact WHA Director of Federal & State Relations Jon Hoelter.

This story originally appeared in the December 05, 2019 edition of WHA Newsletter