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Hospitals take on HHS over price disclosure rule

The United States Department of Health and Human Services (HHS) issued a rule in November that requires hospitals to disclose the rates they negotiate with insurance providers. The rule requires hospitals begin to provide this information to the public in 2021. In response to the rule, the American Hospital Association, Association of American Medical colleges, Children’s Hospital Association and Federation of American Hospitals filed a lawsuit against the HHS, stating the agency did not have the authority to require hospitals to make the disclosure.

Lawmakers state the required disclosure will result in increased information for the public, allowing patients to make better, more informed choices about their care. Hospitals counter, stating the rule results in an unreasonable burden. They also voice concerns about the timing of implementation of the rule, stating the impact of the coronavirus pandemic has already depleted their resources.

How did the government respond to the lawsuit?

When faced with the lawsuit, the HHS filed for summary judgment. The group representing the hospitals did the same. The judge recently ruled in favor of the HHS, stating the rule was not “arbitrary or capricious” and that the government’s response to the hospitals’ concerns was reasonable.

As a result, the rule was deemed legal.

What comes next?

The group representing the hospitals in this case will appeal the decision. If that fails, the rule will likely go into effect and the government will expect hospitals to disclose these rates beginning next year. As currently written, this would include required online postings of standard charges. A failure to do so can result in a fine of up to $300 per day.