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AAMC Joins Hospital Groups in Appealing Court’s Price Disclosure Ruling

June 26, 2020

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CONTACTS
Ivy Baer, Senior Director and Regulatory Counsel

An appeal has been filed after a federal court judge this week issued a summary judgment in favor of the Department of Health and Human Services (HHS) in a lawsuit challenging the agency’s final rule requiring price disclosures.

The AAMC joined the American Hospital Association, the Children’s Hospital Association, the Federation of American Hospitals, and several hospitals in opposing the rule that would require hospitals to post “standard charges” for services and procedures, including charges negotiated with third-party payers [see Washington Highlights, Dec. 5, 2019]. The parties moved for a summary judgment, each asking the court to rule in their favor without additional proceedings. District Judge Carl Nichols heard oral arguments in April 2020.

The AAMC and other plaintiffs filed the appeal and plan to ask for an expedited briefing schedule. Since the Court of Appeals generally does not hear cases during the summer, this would mean that September is the earliest time that a hearing would be scheduled.

The lawsuit challenged a Centers for Medicare and Medicaid Services (CMS) rule that requires hospitals to make public a list of their standard charges for all items and services. This would include rates negotiated between the hospital and a patient’s insurer. The information would have to be displayed for every payer and every plan. The effective date of the rule is Jan. 1, 2021. 


Judge Nichols concluded that the final rule was supported by the Affordable Care Act provision authorizing HHS to require hospitals to post standard charges. The judge rejected the argument that the statutory requirement that hospitals list a standard charge would mean listing the chargemaster since it is the only standard charge that could have been contemplated by Congress.

He indicated that requiring the posting of all charges negotiated with third-party payers involved a significant amount of information and was therefore a “closer call,” but that it was still reasonable given the complex relationships among patients, hospitals, and third-party intermediaries. 

On the statutory question, therefore, Judge Nichols concluded that the final rule — including the imposition of civil monetary penalties for noncompliance — was reasonable given that the goal of the statute is to lower the cost of health care.

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