Federal Court Rejects Hospital Challenge To Price Transparency Rule

June 24, 2020


A federal judge has rejected a lawsuit that challenged a final rule requiring hospitals to publish their pricing information online by January 1, 2021. The American Hospital Association (AHA) and others sued to block the rule, alleging that the Department of Health and Human Services (HHS) had exceeded its legal authority by requiring hospitals to publish privately negotiated rates for every item and service they provide. The AHA alleged that the Affordable Care Act only allowed HHS to require hospitals to post their “standard charges” (i.e., the chargemaster), not privately negotiated third party rates. Judge Carl Nichols ruled that if Congress wanted the law to apply only to “chargemaster” rates, it would have said so explicitly. As a result, the rule remains scheduled go into effect on January 1, 2021. The AHA has indicated it will appeal the decision.

The final rule includes a penalty of $300 per day for non-compliance. Given the significant amount of work involved in gathering and publishing the required data, hospitals are urged to consider their response to the rule in light of the proposed penalties that may be imposed.

For more information, the decision may be accessed at: https://aboutblaw.com/RBl. The final rule can be accessed at: https://www.hhs.gov/sites/default/files/cms-1717-f2.pdf.

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