Hospital groups file lawsuit to block price transparency rule

A group of prominent hospital associations have filed a lawsuit against HHS to stop the implementation of a rule that requires hospitals to post their prices for services online and update it regularly.

The four hospital groups––the American Hospital Association (AHA), the Association of American Medical Colleges (AAMC), the Children’s Hospital Association (CHA) and the Federation of American Hospitals (FAH)––previously announced their plan to sue the agency when the rule was finalized in November. They officially filed suit on Dec. 4.

The rule, which takes effect Jan. 2021, requires all hospitals, not just those that provide Medicare or Medicaid services, to publish their prices, including prices for services negotiated with specific health insurers. The goal of the rule is to help consumers make better choices about their healthcare and give them a better idea of how much they can expect to pay for a hospital visit or specific service.

However, the rule is not without costs to providers. CMS anticipates implementing the rule will cost individual hospitals 150 hours and $12,000 in the first year alone. Collectively, across more than 6,000 hospitals, the cost will total 900,3000 hours and $71.4 million.

The lawsuit specifically takes aim at the part of the rule that requires hospitals to publish their negotiated rates with health insurers, with the hospital groups arguing HHS lacks the authority to require and enforce this provision. They also argued the requirement violates the first amendment and will confuse patients.

“America’s hospitals and health systems stand with patients and are dedicated to ensuring they have the information needed to make informed health care decisions, including what their expected out-of-pocket costs will be,” Rick Pollack, president and CEO of the AHA, said in a statement. “Instead of giving patients relevant information about costs, this rule will lead to widespread confusion and even more consolidation in the commercial health insurance industry. We stand ready to work with CMS and other stakeholders to advance real solutions for patients.”