Despite attempts by hospital groups to prevent its enforcement, the Centers for Medicare and Medicaid price transparency rule for hospitals will come into effect on January 1st as planned.
On Tuesday, a federal appeals court ruled the hospital groups on the legal action they brought to block the CMS regulation. This rule requires hospitals operating in the United States to make pricing information – including prices negotiated with health insurers – publicly available.
Judge David Tatel, who filed the statement in the US Court of Appeals for the District of Columbia Circuit, wrote that one of the vendor’s key arguments was “off the mark”. Orally in October, the American Hospital Association, which had appealed with several other hospital groups, said many of the tariffs negotiated with payers were “undetectable” because they were set after the patient was treated and therefore not known in advance could be given.
However, Tatel wrote the rule: “Hospitals are not required to disclose all possible cost permutations based on hypothetical supplementary care or some other variable factor. It only requires disclosure of the base rate for an item or service, not the adjusted or final payment that the hospital ultimately receives due to additional payment methods. “
In addition, the groups opposed the requirement of the rule that hospitals must provide price information via both a machine-readable list and a separate, consumer-friendly list of services that can be purchased. Tatel and the other judges also sided with HHS on this point, saying that the secretary “can require hospitals to display the information in various ways”.
The hospital groups appealed after a federal judge ruled against them on a lawsuit they filed in December 2019. In the lawsuit, the Groups alleged that the regulation was outside the jurisdiction of the Department of Health and Human Services and that disclosure of pricing information would result in higher costs. However, US District Judge Carl Nichols ruled in favor of the federal agency and gave the HHS secretary a summary judgment.
Just last week, the American Hospital Association, along with several other organizations, tabled an emergency postponement to prevent the rule from enforcing in January. However, the request was denied.
In a statement posted on its website, the association said US hospitals “support the goal of increasing price transparency” but are “disappointed with today’s decision.”
“In addition, the decision to refuse a respite in enforcement ignores the overwhelming burden of the pandemic on hospitals,” the group said.
The association reiterated its belief that disclosure of privately negotiated rates will not help patients understand how much they are actually paying for treatment and that disclosure “accelerates anti-competitive behavior by commercial health insurers and hampers innovation in value-based care delivery becomes”.
The association also calls on the future administration of President-elect Joe Biden to evaluate the rule and “exercise discretion in enforcement for the duration of the public health emergency.”
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