Hospital groups to sue HHS to block price transparency rule

Hospital groups are not happy about a new HHS requirement that will force all hospitals to publicly post their prices for services online. A group of hospital associations plan to launch a lawsuit against the agency just days after it finalized the rule, which will take effect Jan. 1, 2021.

“…This rule will introduce widespread confusion, accelerate anticompetitive behavior among health insurers and stymie innovations in value-based care delivery,” reads a joint statement from the American Hospital Association (AHA), Association of American Medical Colleges (AAMC), Children’s Hospital Association (CHA) and Federation of American Hospitals (FAH). The associations commented on the rule just hours after the final version was released on Nov. 15.

The rule specifically requires all hospitals to post their prices online for consumers to view and comparison shop. The goal of HHS is to empower patients and consumers with more information to make better healthcare choices and ultimately lower costs.

Hospitals will be required to post standard charges that include payer-specific negotiated charges so consumers can know what to expect to pay with their insurance. The final rule pushed back the proposed implementation date from 2020 to 2021.

Hospitals that don’t comply will face civil monetary penalties of up to $300 per day.

At the time of the final rule issuance, hospital groups were up in arms, arguing the action wouldn’t actually provide patients with real price transparency.

"Patients should have readily available and easy-to-understand cost-sharing information when they need to make healthcare decisions. Healthcare price transparency ought to be defined by the right information at the right time,” FAH President and CEO Chip Kahn said in a statement on Nov. 15. "This final regulation on hospital transparency fails to meet the definition of price transparency useful for patients. Instead, it will only result in patient overload of useless information while distorting the competitive market for purchasing hospital care."

In addition, he argued HHS was overstepping its authority to implement the rule, something that could appear in upcoming legal action from the hospital.

“Because the final rule does not achieve the goal of providing patients with out-of-pocket cost information, and instead threatens to confuse patients, our four organizations will soon join with member hospitals to file a legal challenge to the rule on grounds including that it exceeds the Administration’s authority,” the joint statement concluded.