AHA, Others to Sue HHS Over New Hospital Price Transparency Rule
The AHA and three other industry groups announced their plans to file a legal challenge to CMS’s finalized hospital price transparency rule, arguing the rule oversteps HHS’ authority.
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By - The AHA announced its decision to sue HHS over the recently finalized hospital price transparency rule, which will require hospitals to disclose their payer-specific negated rates to consumers, according to a recent press release.
The Association of American Medical Colleges (AAMC), Children’s Hospital Association (CHA) and Federation of American Hospitals (FAH) will also join AHA’s legal challenge.
“Because the final rule does not achieve the goal of providing patients with out-of-pocket cost information, and instead threatens to confuse patients, our four organizations will soon join with member hospitals to file a legal challenge to the rule on grounds including that it exceeds the Administration’s authority,” the organization explained in the joint statement.
The rule finalized on Friday intends to take Americans out of the dark by shedding a light on hospital prices. The final rule will require hospitals to publicly disclose their standard charges, including payer-specific negotiated rates, for hundreds of services online in a consumer-friendly format.
Hospitals will face a fine of $300 per day if they fail to comply with the hospital price transparency rule by the start of 2021.
READ MORE: New Healthcare Price Transparency Rule to Unveil Negotiated Rates
“President Trump has promised Americas patients ‘A+’ healthcare transparency, but right now our system probably deserves an F on transparency. President Trump is going to change that with what will be revolutionary changes for our healthcare system,” HHS Secretary Alex Azar said in a press release.
Hospital groups disagreed with the HHS Secretary. AHA, for example, contended that the rule will lead to confusion among consumers and will setback efforts to provide patients with the most relevant information for healthcare decision-making.
“Instead of helping patients know their out-of-pocket costs, this rule will introduce widespread confusion, accelerate anticompetitive behavior among health insurers, and stymie innovations in a value-based care delivery,” the association stated in the joint statement.
Aside from this issue, the AHA and other hospitals groups argued that the rule also exceeds the administration’s authority.
AHA stressed that America’s health systems have repeatedly urged CMS to work together with hospitals, doctors, insurers, and patients to find a different solution to giving patients healthcare price transparency. The association is still willing to work with CMS to uncover the right approach.
READ MORE: Going Above and Beyond the CMS Hospital Price Transparency Rule
In a separate statement, the FAH also expressed that the rule would fail to accomplish price transparency without bringing complications along with it.
“This final regulation on hospital transparency fails to meet the definition of price transparency useful for patients. It will only result in patient overload of useless information while distorting the competitive market for purchasing hospital care,” Chip Kahn, FAH president and CEO said in the statement.
Similar to AHA, the organization also strongly voiced that the regulation exceeds the administration’s authority, and they stand with AHA and other organizations in taking the steps to challenge the rule under those circumstances.
Hospitals groups have been opposed to this type of price transparency since the federal department to implement such rules in July of this year. One of the main reasons why is the complexity of actually disclosing the standard charges for hospital items and services, stated Ross D’Emanuele, partner at law firm Dorsey and Whitney and co-chair of the firm’s healthcare practice.
“The hospital price transparency rule will be enormously complex: both for hospitals to implement and for consumers to understand. The rule requires hospitals to describe each item or service, and then display multiple types of prices of charges applicable to each. The results will be hundreds of thousands of data pieces reported for every hospital, to be updated annually. This rule makes clear the reporting includes physician and other professional services that the hospital bills, not merely hospital services,” he explained in an emailed statement.
READ MORE: Are Hospital Price Transparency Rules a Solution for Consumerism?
Industry experts at Xtellligent Healthcare Media’s fourth annual Value-Based Care Summit in Boston expressed similar concerns.
Determining the top shoppable services, their negotiated rates, and how to display that information in a consumer-friendly format will be a major data mining project for not just hospitals, but also patients and consumers shopping around for services, said Matthew Fisher, partner and chair of the Health Law Group at Mirick O’Connell.
Patients will also need either the service type or CPT code to determine standard charges, added Michael Rawdan, PhD, senior director of financial services and patient experience at St. Luke’s Health System in Idaho.
The complexities of implementation underscore another reason why hospitals do not favor the finalized hospital price transparency rule: consumers need out-of-pocket cost estimates, not standard charges, to shop for care.
Hospital groups are willing to challenge the federal government in court to encourage policies that provide patients and consumers with this type of price transparency, which they believe will truly empower Americans to access high-value care.
