Hospital Price Transparency Rule Upheld

June 24, 2020 | Eric D. Fader | Affordable Care Act | Hospitals | Legislation and Public Policy | Litigation | Private Insurers

On June 23, the U.S. District Court for the District of Columbia ruled against the American Hospital Association and other associations and individual hospitals that had sued the U.S. Department of Health and Human Services (HHS) to block a new price transparency rule that will take effect on January 1, 2021. The rule, which was finalized last November and previously discussed here, will require hospitals to make available online all standard charges for items and services, including discounted rates negotiated with third-party payers. Hospitals that fail to comply will face possible financial penalties.

The plaintiffs had argued that the rule is arbitrary and capricious, violates their free speech rights, and exceeded HHS’s statutory authority under the Administrative Procedure Act. However, the Court determined that the rule and the imposition of penalties for non-compliance are authorized by the Affordable Care Act. The Court also rejected the plaintiffs’ argument that disclosing prices could affect hospitals’ negotiations with insurance companies and noted the importance of giving patients information that allows them to make informed decisions about their healthcare options.

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