WHA and US Chamber of Commerce File Amicus Briefs Challenging CMS Hospital Mandate Rule

March 05, 2020

WHA joined 37 state hospital associations in filing an amicus brief Feb. 28 in a federal lawsuit brought by the American Hospital Association challenging a 2019 Centers for Medicare & Medicaid Services final rule mandating that hospitals disclose their privately negotiated rates with commercial health insurers.

Both the state association amicus brief and AHA’s briefs to the U.S. District Court for the District of Columbia conclude that the rule exceeds CMS’ rulemaking authority, is excessively burdensome, and will not achieve the stated purpose of the rule.

In January, Wisconsin’s own chamber of commerce, WMC, criticized hospitals and health care providers for “pushing back strongly – including taking legal action – to stop (the transparency rule).” However, the U.S. Chamber of Commerce is joining hospitals in the very legal action WMC chastised hospitals for taking. In its own amicus brief, the U.S. Chamber strongly supported hospitals’ argument that the rule exceeded CMS’ rulemaking authority and would not lower health care costs.

“The rule imposes onerous obligations to calculate and to disclose negotiated rates for each of a hospital’s tens of thousands of medical items and services, across each of the dozens, hundreds, or even thousands of plans with which it may contract, calculated in five different ways and then displayed for the public under two different formats,” wrote the U.S. Chamber of Commerce.

“The rule imposes these burdens for no useful reason; the disclosures will neither provide patients with any useful information nor serve CMS’ purpose of lowering heath care costs,” stated the U.S. Chamber of Commerce in its brief to the court. “Rather than imposing these burdens on hospitals, CMS would have better served its interests if it had instead promoted private-sector solutions for the price transparency issue.”

The message of WHA and the 37 state associations’ amicus brief similarly said that far less burdensome options – such as information from WHA’s PricePoint and patients’ insurance plans – are available to provide useful pricing information to consumers, including information about their expected out-of-pocket costs.

“[We] support useful transparency in health care pricing,” the state association brief stated to the federal court. “But transparency can be accomplished through far less burdensome initiatives that are more meaningful to the consumer. Hospital financial navigators, online tools from hospitals and insurers, and other resources would provide consumers the information they actually are looking for: their expected out-of-pocket cost of care for a treatment or procedure. For all the information that the Final Rule requires to be disclosed, it ignores the one thing patients actually want. In that respect, it is as unhelpful as it is unlawful.”

The U.S. Chamber of Commerce not only echoed that the challenged mandate fails to be helpful to consumers, but that it would actually mislead consumers.

“The Chamber and its members have an interest in ensuring that agencies adhere to the limits of their statutory authority, and that agencies do not violate First Amendment principles by compelling speech that would only serve to confuse the public,” wrote the Chamber in its amicus brief. “At best, disclosure of negotiated rates will lead to confusion over a patient’s financial obligation for services. At worst, the disclosure of negotiated reimbursement rates may in fact deter patients from obtaining medical care that they need, if individuals fail to recognize that their own financial exposure is much lower than the negotiated reimbursement rate that the insurer pays the hospital.”

Instead, the U.S. Chamber of Commerce promoted “insurer cost tools that can (unlike CMS’ rule) provide real-time, personalized estimates for patients’ out-of-pocket expenses for the most common medical services,” noting that such private-sector efforts “actually will be of use to the public.”

Insurers also staunchly opposed mandating disclosure of negotiated terms in comments in January on a similar proposed rule that would mandate that health plans disclose their negotiated rates. America’s health insurance plans (AHIP), a trade association of health insurance companies, said that CMS lacks authority to implement such a mandate and that it would increase costs.

“The proposed rule is contrary to statute, effects a taking of health insurance providers’ trade secrets, unconstitutionally compels speech, and is arbitrary and capricious. That is why AHIP strongly urges the departments to withdraw the proposal to implement new machine-readable files,” said AHIP in its comments on the proposed rule.

This story originally appeared in the March 05, 2020 edition of WHA Newsletter