US hospitals file lawsuit against proposed price-transparency regulation

hospital billing

Following our previous report on the Trump administration calling for price transparency in US hospitals, the nation’s hospital groups have now sued the administration, arguing that the new federal rule is ‘unlawful’

The Trump administration called for the price disclosure rule – which would come into effect in 2021 – in order to allow patients to better shop for deals on a range of medical treatments. The proposed regulation also follows public outcry over surprise medical bills and pricey out-of-pocket costs.

Seema Verma, Administrator for the Centers for Medicaid and Medicare Services, was one of those backing the new regulation. In an op-ed article published in The Chicago Tribune she said: “The decades-long norm of price obscurity is just fine for those who get to set the prices with little accountability and reap the profits, but that stale and broken status quo is bleeding patients dry. The price transparency delivered by these rules will put downward pressure on prices and restore patients to their rightful place at the centre of American healthcare.”

But the hospital groups ─ a collective that is formed of members such as The Association of American Medical Colleges, the National Association of Children’s Hospitals and the Federation of American Hospital – insisted that the requirement for hospitals to disclose their private negotiations with insurers violated their First Amendment rights. In addition, they asserted that the rule would not accomplish the administration’s aim of helping consumers avoid surprise medical bills.

“America’s hospitals and health systems remain committed to providing patients with the information they need to make informed healthcare decisions,” the hospital groups’ lawsuit said. “[The rule] will generate confusion about patients’ financial obligations, not quell it.”

While the outcome of the lawsuit is still being decided, legal experts such as Douglas Hallward-Driemeier – a lawyer based in Washington – notes that the hospitals group could well succeed by raising First Amendment grounds. For now, hospitals and insurers are advised to sit tight while the American Hospital Association, along with the other organisations, do their best to speed up the proceedings.