Hospital groups file lawsuit to block Trump's price transparency rule

[December 05, 2019]  By Reuters Staff

(Reuters) - U.S. hospital groups have challenged the Trump administration's rule that requires them to be more transparent about prices they charge patients for healthcare services, according to a lawsuit filed on Wednesday.

The plaintiffs, including the nonprofit American Hospital Association (AHA), are looking to block the rule issued last month that mandates hospitals to publish pricing information of their services on the internet.

"The rule ... does not provide the information patients need. Mandating the public disclosure of negotiated charges would create confusion about patients' out-of-pocket costs, not prevent it," the plaintiffs said.

The rule, seen as a violation of the First Amendment by the hospital groups, also demands confidential information on individually negotiated contract terms with all third-party payers, including private commercial health insurers.

Such disclosures would eliminate hospitals' ability to negotiate pricing with insurers that would undermine competition and blunt incentives for health insurers to sign arrangements that could potentially lower costs, the plaintiffs said.

This is not the first time that the industry has challenged President Donald Trump's efforts to lower drug prices.

In July, a federal judge sided with drugmakers by striking down a rule that would have forced pharmaceutical companies to include the wholesale prices of their drugs in television advertisements.

An emergency sign directs patients and staff to the emergency room at the newly constructed Kaiser Permanente San Diego Medical Center in San Diego, California, U.S. , April 17, 2017. REUTERS/Mike Blake/File Photo

"Hospitals should be ashamed that they aren't willing to provide American patients the cost of a service before they purchase it," said Caitlin Oakley, a spokeswoman for the Department of Health and Human Services, adding that the administration would continue to fight for price transparency.

The AHA, along with the Association Of American Medical Colleges and Federation Of American Hospitals, among others, said it would press for speeding up the decision on the rule, so hospitals do not spend time and resources preparing for what may be invalidated.

The rule is expected to come into effect on January 1, 2021.

(Reporting by Saumya Sibi Joseph in Bengaluru; Editing by Shinjini Ganguli and Anil D'Silva)

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