A federal appeals court in Washington, D.C., today heard oral argument in an appeal from the AHA and hospital groups to overturn a Department of Health and Human Services rule requiring hospitals to disclose their confidential privately negotiated charges with insurers.

The lower court previously upheld the rule, despite saying it was a “close call” in the case, as a reasonable statutory interpretation by the agency under a legal theory announced in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984), which instructs a court to defer to such reasonable agency interpretation.

Counsel for AHA and the hospital groups faced tough questions on the reasonableness of HHS’ statutory interpretation of Section 2718(e) of the 2010 Affordable Care Act on which it relied for authority to finalize the rule. Meanwhile, the government focused its responsive arguments on benefits to patients that it contends the rule would bring by requiring specific disclosures. However, the government offered little legal support for its statutory authority to compel these disclosures.

Counsel for AHA and the hospital concluded by urging the court to decide the appeal quickly because of the looming Jan.1 compliance deadline that the rule established and the unreasonable burden it places on the hospital field.

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