AHA to Appeal Decision Upholding Hospital Price Disclosure Rulemaking

June 25, 2020

A federal judge in the U.S. District Court for the District of Columbia on June 23 dismissed a lawsuit brought by the American Hospital Association (AHA) seeking to overturn an HHS rule mandating that hospitals publish their privately negotiated prices with commercial health insurers beginning on January 1, 2021. AHA plans to appeal the judge’s decision on an expedited basis.

AHA’s lawsuit was supported by amicus briefs from 37 state hospital associations, including WHA, as well as the U.S. Chamber of Commerce (see March 5, 2020 The Valued Voice). Together, all argued to the District Court that the rule exceeds CMS’ rulemaking authority, is excessively onerous and burdensome, and will not achieve the stated purpose of the rule.

“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.”

“We are disappointed in today’s decision in favor of the administration’s flawed proposal to mandate disclosure of privately negotiated rates," AHA General Counsel Melinda Hatton said. "The proposal does nothing to help patients understand their out-of-pocket costs. It also imposes significant burdens on hospitals at a time when resources are stretched thin and need to be devoted to patient care. Hospitals and health systems have consistently supported efforts to provide patients with information about the costs of their medical care. This is not the right way to achieve this important goal.

“Today’s decision was also premised on the erroneous conclusion that the ‘standard charges’ referenced in current [statute] can be interpreted to include rates negotiated with third-party payers," Hatton said. "While the Court ruled that this was a close call, that conclusion clearly does not reflect the experience of hospitals and health care systems.”

As a result of the judge’s ruling, the effective date of the rule requiring hospitals to publish their negotiated prices currently remains January 1, 2021. AHA has said it will appeal the decision to the D.C. Circuit Court of Appeals and is expected to seek a temporary injunction delaying the January 2021 effective date pending the appeal.

Contact WHA General Counsel Matthew Stanford if you have any questions regarding this litigation and the rule.


This story originally appeared in the June 25, 2020 edition of WHA Newsletter