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AAMC, Hospital Groups File Lawsuit Regarding CMS Price Disclosure Rule

December 5, 2019

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Ivy Baer, Senior Director and Regulatory Counsel

The AAMC, American Hospital Association, Children’s Hospital Association, Federation of American Hospitals, along with a group of hospital plaintiffs, Dec. 4 filed a lawsuit on challenging the price disclosure rule recently finalized by the Centers for Medicare and Medicaid Services (CMS) [see Washington Highlights, Nov. 15]. The rule is effective January 1, 2021.

The complaint filed by the AAMC and others states that the Department of Health and Human Services (HHS) lacks the statutory authority to require hospitals to make public individual negotiated rates. Furthermore, the rule violates the First Amendment because it compels hospitals’ speech in a manner that will confuse patients and unduly burden hospitals.

The final rule requires hospitals to make public discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges for at least 300 “shoppable” services (i.e., a health care service that can be scheduled by patients in advance), 70 of which are specified by CMS and 230 are hospital-selected. The hospital will have to update the information at least annually and must include a description of each item or service and any code used by the hospital for purposes of accounting or billing. The information must be displayed and packed in a consumer-friendly manner.

Compliance with the rule will be extremely burdensome to hospitals and will divert resources from patient-care activities. It also will not provide consumers with information about anticipated out-of-pocket costs, which is the information most sought after. Instead, the rule will introduce widespread confusion and accelerate anticompetitive behavior from commercial health insurers.

The AAMC remains willing to work with CMS and other stakeholders to find the optimal way to provide consumers with health care pricing information that will be useful to them.

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