Hospitals sued HHS on Wednesday over a new rule that would force them to disclose the rates they
negotiate with insurers.
The complaint alleges HHS doesn't have the legal authority to require
hospitals to publicly disclose the prices that commercial health insurers and
hospitals negotiate with each other. The lawsuit also claims that the mandate
violates the First Amendment rights of hospitals and health insurers.
The Trump administration has shown a willingness to go
to court over its healthcare regulatory agenda. The courts have recently ruled
against the administration on its policies for site-neutral payments, 340B drug payments and drug
price disclosure in direct-to-consumer TV ads.
"I think they were fully expecting that they
would have to defend (the rule) in court," said Melinda Hatton, general
counsel for the American Hospital Association. "They're no strangers to
lawsuits over there."
The AHA, the Association of American Medical Colleges,
the Children's Hospital Association and the Federation of American Hospitals
are suing the federal government in the U.S. District Court for the District of
Columbia.
HHS hopes the new policy will boost hospital
competition and put downward pressure on healthcare spending by allowing
consumers to shop around.
"Hospitals should be ashamed that they aren't
willing to provide American patients the cost of a service before they purchase
it," said Caitlin Oakley, national spokesperson and senior advisor for
HHS.
But provider groups argue that the mandate won't do
anything to help consumers because it won't give them information about their
out-of-pocket costs, which can vary based on their health coverage.
"CMS' final rule fails to offer patients
easy-to-understand information regarding their out-of-pocket obligations for
care," said Chip Kahn, president and CEO of the FAH.
Hospitals also claim that disclosing their negotiated
rates could increase healthcare prices by increasing the administrative work
required for compliance and decreasing competition among insurers.
"This rule will lead to widespread confusion and
even more consolidation in the commercial health insurance industry," said
Rick Pollack, president and CEO of the AHA.
Hospitals say that they're sympathetic to the Trump
administration's concerns that patients need better information about how much
they will pay for healthcare services. They say that they've tried to work with
the administration to develop better solutions to no avail.
Providers don't want to sue the administration because
they would "prefer to have discussions with the administration about how
hospitals could work with commercial insurers and others to give patients
information about their out-of-pocket costs," Hatton said.
"Yes, a solution has been put forward, but is it
the right solution? Is it a workable solution?" said Mike Strazzella, head
of federal government relations at Buchanan, Ingersoll and Rooney.
Still, many healthcare experts, patient advocates and
economists think that making hospitals reveal their negotiated discounts could lower
healthcare prices long-term, especially if employers can figure out how to
leverage the information. Employers and smaller insurers are "proxy
shoppers of healthcare" so they have the potential to drive down
healthcare costs if they have more pricing information, according to Dr. Martin
Makary, a White House health policy advisor under both Presidents Obama and
Trump. He thinks hospital groups are just looking out for their own
self-interest.
"Price transparency is the right side of
history," he said. "Asking how many patients will use pricing
information is a distracting argument."
https://www.modernhealthcare.com/payment/hospitals-sue-hhs-over-negotiated-price-disclosure-rule?
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