February 25, 2021

Court of Appeals Clears the Way for Hospital Price Transparency Rule

On February 24, the United States Court of Appeals for the District of Columbia issued a ruling affirming summary judgment in favor of HHS and against the American Hospital Association (“AHA”).  The ruling clears the way for CMS’s Price Transparency Rule (“Rule”) which became effective January 1. Generally, the Rule requires hospitals to provide accessible pricing information online about the items and services they provide.

The AHA and other stakeholders argued that the Rule violated section 2718(e) of the Public Health Service Act, the Administrative Procedures Act, and the First Amendment. However, the DC Circuit ruled that limiting hospital’s publication of charges to solely Medicare charges would be redundant of Medicare’s statute, and also conflict with section 2718(e), which requires a hospital to publish each of its charges, rather than just charges set by the Secretary of HHS. Further, the DC Circuit also emphasized that the Rule “does not require hospitals to disclose all possible permutations of costs based on hypothetical care,” but, rather, hospitals must disclose base rates for an item or service. The DC Circuit affirmed the District Court’s grant of summary judgment, meaning compliance with the Rule is required as of the start of 2021.