A recent decision by a United States District Court ruled in favor of hospital pricing transparency in American Hospital Association v. Alex M. Azar II, Secretary of Health and Human Services, No. 1:19-CV-03619 CJN (D.D.C. Jun. 23, 2020); a copy of the Court’s decision can be located here. The Court ruled against the American Hospital Association (AHA) and its lawsuit to block the Department of Health and Human Services (HHS) rule that forces hospitals to disclose their privately negotiated rates with insurers. If the decision stands, hospitals would need to reveal privately negotiated rates with the insurance carriers beginning January 1, 2021.[1]

Briefly, the Affordable Care Act requires each hospital operating within the United States to establish and make public “a list of the hospital’s standard charges for items and services provided by the hospital.”[2] In November 2019, the Centers for Medicare and Medicaid Services (CMS), an agency within HHS, issued a final rule defining “standard charges,” delineating hospitals’ publication requirements and laying out an enforcement scheme. AHA argued that the final rule exceeded the agency’s statutory authority and violates the First Amendment.

The Court disagreed with AHA’s arguments and seemed convinced that the new law will empower patients to make pricing comparisons between hospitals.

The Founder and Chair of patienrightsadvocate.com, Cynthia Fisher, issued a statement immediately following the Court’s decision. Ms. Fisher stated that it was a significant win for patients and that transparency will increase competition, which “will greatly reduce the cost of care and coverage.”[3]

The ruling is a blow for hospitals, which have been adamantly opposed to disclosing their privately negotiated rates since HHS first unveiled its proposal in July 2019. Representatives from AHA stated that the ruling imposes a significant burden on hospitals when the resources are stretched thin during the pandemic.[4]

The AHA filed a notice of appeal of the Court’s decision on June 24, 2020.

At Yoars Law, we focus on being proactive business and legal advisors for our clients, guiding them through the complex legal issues that arise in the medical profession and health industry. This includes being a zealot advocate when needed.

[1] See 45 C.F.R. § 180.50.

[2] 42 U.S.C. § 300gg-18(e) (2018).

[3] https://www.patientrightsadvocate.org/statement-on-aha

[4] See https://www.aha.org/press-releases/2020-06-23-aha-statement-district-court-decision-mandated-disclosure-negotiated

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