A federal district court in Washington, D.C., today heard oral argument in the AHA’s legal challenge to the Centers for Medicare & Medicaid Services’ final rule mandating that hospitals disclose their privately negotiated charges with commercial health insurers.

The court engaged in a very detailed discussion with both counsel for AHA and the government about the Department of Health and Human Services’ statutory authority to require and enforce the provision that mandates public disclosure of individually negotiated rates between commercial health insurers and hospitals under the authority it has to compel disclosure of “standard charges.” 

Counsel for AHA emphasized that the agency’s current view of its authority was not consistent with the statute’s text or the agency’s previous views of the meaning of the statute, and that its now expansive view of what must be disclosed as standard charges does not give patients information they most want and need about their out-of-pocket costs. Counsel for the government maintained that the agency developed the rule to foster transparency for patients and allow them to be better consumers of care in a way that is least burdensome for hospitals.

Joining the AHA in the lawsuit are the Association of American Medical Colleges, the Children's Hospital Association and the Federation of American Hospitals, as well as member hospitals Memorial Community Hospital and Health System in Blair, Neb.; Bothwell Regional Health Center in Sedalia, Mo.; and Providence Holy Cross Medical Center in Mission Hills, Calif.

The court indicated that it will try to quickly issue a decision in the case, understanding that with a looming compliance deadline hospitals will need to immediately begin work related to that effort.

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