Court of Appeals rules against hospitals in price transparency case

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On December 29, 2020, the U.S. Court of Appeals for the District of Columbia Circuit upheld the Trump Administration’s hospital price transparency rule in a 2-0 decision. As a result, hospitals must comply with the rule and publicly disclose a variety of “standard charges” on January 1, 2021.

The Centers for Medicare and Medicaid Services (CMS) finalized the price transparency rule in November 2019. It requires hospitals to publish two lists of prices:

  1. A comprehensive, “machine-readable” list of various charges for all items and services.
  2. A consumer-friendly list of prices for a smaller set of “shoppable” services.

Most concerning for many hospitals, both lists must include payer-specific negotiated charges which are typically kept confidential by hospitals and payers alike.

The American Hospital Association (AHA) and other hospital groups challenged the rule, seeking to block its implementation. The U.S. District Court for the District of Columbia dismissed the case earlier this year, and the AHA and other plaintiffs appealed. This most recent ruling was widely expected based upon the nature of the judges’ questions during oral arguments held in October.

In the decision, the Court of Appeals rejected the hospitals’ contention that the rule is overly burdensome, stating that CMS “weighed the rule’s costs and benefits and made a reasonable judgment that the benefits of easing the burden for consumers justified the added burdens imposed on hospitals.”

AHA’s counsel expressed disappointment with the decision and expressed hope that the Biden administration will consider revising the rule or exercising enforcement discretion at least until the end of the COVID-19 pandemic. In the meantime, hospitals must comply with the rule by this Friday, January 1.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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