Hospitals lose another attempt to stave off price transparency

Dive Brief:

  • A federal appeals court ruled against hospitals’ efforts to stop regulators from forcing them to reveal the secret negotiated prices they reach with insurers, according to an opinion filed Tuesday. 
  • Hospitals were hoping for intervention from the D.C. Circuit Court of Appeals as the rule requires hospitals to reveal these rates by Friday. The American Hospital Association had filed for an emergency motion to block the rule from going into effect but the court rejected it. 
  • Judge David Tatel said AHA’s arguments, including that some rates are unknowable, “miss the mark.”

Dive Insight:

It’s unsurprising the nation’s hospital lobby lost its latest legal challenge in the case to force hospitals to reveal the negotiated rates they reach with insurers for services provided to patients.  

The three-judge panel was highly skeptical of the hospital lobby’s claims when it heard oral arguments in October and pushed back in their line of questioning. The hospital lobby has contended the requirement is too burdensome and compiling a consumer-friendly price list is impossible. 

The undoing of the case may have been when AHA’s litigator told judges certain prices are “unknowable.” 

That only provoked more questions from primarily two of the three judges who seemed baffled by the assertion that prices were unknowable. Judges Merrick Garland and Tatel — both appointed by former President Bill Clinton — launched into a lively line of questioning about the cost of X-rays. 

The exchange was brought up again in Tatel’s written opinion.

The hospital lobby had argued that it’s impossible to know the rates because in some instances a patient may require more care than was originally anticipated. 

But Tatel said these arguments miss the mark. Hospitals are not required to disclose all the possible prices, instead they’re required to disclose base rates that are negotiated with insurers.

“It simply requires disclosure of base rates for an item or service, not the adjusted or final payment that the hospital ultimately receives based on additional payment methodologies,” Tatel wrote. 

Ultimately, Tatel affirmed the district court’s grant of summary judgement in favor of HHS.

The hospital lobby had tried a last ditch effort to stop the rule from going into effect by filing an emergency motion for a stay last week. AHA argued hospitals are overwhelmed by the rollout of the coronavirus vaccines and record-high COVID-19 caseloads.  

Given Tuesday’s ruling, the emergency motion was dismissed. AHA did not immediately respond to a request for comment.