Four national medical organizations joined three hospital plaintiffs in filing a lawsuit against the United States Department of Health & Human Services (HHS). The lawsuit challenges a recent Centers for Medicare & Medicaid Services (CMS) rule that requires hospitals to publicly disclose the rates they negotiate with insurers.
On November 15, 2019, the CMS announced a final rule which requires hospitals to publicly disclose the rates they negotiate with insurers. The ruling goes into effect on January 1, 2021.
The final rule requires hospitals to post their standard charges online in a machine-readable file. Hospitals will be required to disclose the standard charges for all items and services, including professional charges for physicians and other practitioners. Under the rule, hospitals must publicize online 300 payer-specific negotiated rates for services that patients are likely to shop around for. Hospitals that fail to publish the negotiated rates online can face penalties, including a fine of up to $300 per day.
On December 4, 2019, four national medical organizations joined three hospital plaintiffs in a lawsuit against HHS challenging this final rule in the United States District Court for the District of Columbia.
The four national organizations filing suit against HHS are the American Hospital Association (AHA), the Association of American Medical Colleges (AAMC), the Federation of American Hospitals (FAH), and the National Association of Children’s Hospitals, Inc. (CHA). Joining the national organizations are the Memorial Community Hospital and Health System, the Providence Health System–Southern California d/b/a Providence Holy Cross Medical Center, and Bothwell Regional Health Center.
The healthcare and hospital organizations argue that HHS lacks statutory authority to require and enforce this provision.
The organizations also argue that the rule violates the First Amendment because it is not narrowly tailored and mandates speech in a manner that fails to directly advance a substantial government interest and because it compels public disclosure of individual rates negotiated between hospitals and insurers.
Finally, the rule would be, according to the AHA, AACM, FAH and CHA, confusing to patients and unduly burdensome to hospitals.
