Hospital groups sue HHS to block price transparency rule

Four organizations representing hospitals and health systems across the nation sued HHS Dec. 4, challenging a final rule that requires hospitals to disclose the rates they negotiate with insurers beginning in 2021.

The American Hospital Association, the Association of American Medical Colleges, the Children's Hospital Association, and the Federation of American Hospitals filed the lawsuit in the U.S. District Court for the District of Columbia. The groups argue that HHS lacks statutory authority to require public disclosure of individually negotiated rates between commercial insurers and hospitals. The lawsuit further alleges that the rule violates the First Amendment because it requires "highly confidential" negotiated rates to be disclosed.

"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 press release. "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."

Under the final rule, issued Nov. 15, hospitals will be required to disclose the standard charges, including payer-specific negotiated rates, for all items and services. Hospitals that fail to publish the negotiated rates online could be fined up to $300 a day.

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