Skip to main content
Sister Publication Links
  • ESG: THE NEW IMPERATIVE
Subscribe
  • My Account
  • Login
  • Subscribe
  • News
    • Current News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Digital Health
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
  • Data/Lists
    • Rankings/Lists
    • Interactive Databases
    • Data Points
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Awards
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
    • Women in Healthcare
    • - Luminaries
    • - Top 25 Diversity Leaders
    • - Leaders to Watch
    • - Luminaries
    • - Top 25 Women Leaders
    • - Women to Watch
  • Events
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Custom Media Event: ESG Summit
    • Transformation Summit
    • Women Leaders in Healthcare Conference
    • Social Determinants of Health Symposium
    • Leadership Symposium
    • Health Care Hall of Fame Gala
    • Top 25 Women Leaders Gala
    • Best Places to Work Awards Gala
    • Top 25 Diversity Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Supply Chain Revenue Cycle
    • - Hospital at Home
    • - Workplace of the Future
    • - Strategic Marketing
    • - Virtual Health
  • Listen
    • Podcast - Next Up
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Law & Regulation
May 07, 2020 05:02 PM

Hospitals ask federal court to toss rule on negotiated rates

Michael Brady
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Modern Healthcare Illustration / Getty Images

    Hospitals on Thursday pushed a federal judge to throw out a rule that would force them to disclose the prices they negotiate with commercial health insurers, saying that Congress didn't give HHS the power to do it.

    Lawmakers only allowed the federal government to make hospitals post a list of so-called "standard charges" and the rates they charge for diagnostic-related groups, argued Cate Stetson, an attorney for Hogan Lovells representing hospitals, during a telephonic hearing before the U.S. District Court for the District of Columbia.

    HHS "is trying to solve a problem with a tool that it doesn't have," Stetson said.

    Negotiated rates, by their nature, cannot be standard charges because they are the result of private negotiations, she said. Besides, HHS' own research shows that consumers only care about their out-of-pocket costs. Stetson said there are better ways to achieve that, including the agency's proposed rule to require health plans to provide beneficiaries with price and cost-sharing information in advance of their treatment. It would also be extremely burdensome for hospitals to have to post thousands of unique charges, she added.

    The government's definition of a standard charge includes a massive amount of granular, one-off information, Stetson said.

    "That completely explodes the definition of what it means to be a standard charge," she said.

    The Trump administration isn't advancing a legitimate federal interest through the rule, Stetson argued, so Judge Carl Nichols should toss it out.

    But Department of Justice lawyer Michael Baer, representing HHS, said hospitals' interpretation of federal law is misguided because it wouldn't make sense for Congress only to allow the agency to force hospitals to post their chargemaster lists and rates for diagnostic-related groups, especially since the latter can vary significantly by patient.

    The fact that Congress included so-called DRGs as an example of charges that hospitals need to post is evidence that lawmakers wanted standard charges to go beyond chargemaster information. Likewise, Congress said that hospitals needed to "establish" and "update" their standard charges each year. Both Baer and Nichols questioned why hospitals would need to "establish" a chargemaster list since all hospitals have them. If Congress only wanted hospitals to post their chargemasters and DRGs, they would have said so directly. They wouldn't have used the term "standard charges" at all, Baer said.

    Plus, most people don't pay the chargemaster rate or cash discounted rates, so hospitals' definition of standard charges wouldn't be useful. Third-party payers cover some or all hospital expenses for roughly 9 in 10 consumers, so limiting the definition of standard charge to chargemaster rates would "write off" nearly all paying patients, Baer said.

    Even more, there's a public interest in knowing the rates that hospitals negotiate with private payers because it would allow consumers to make more informed decisions and force providers to compete on price like any other market, Baer argued.

    "There just is not another market that looks like the market for hospital services," he said.

    Nichols said that he wasn't sure how he would decide the case but promised to reach a judgment soon since the losing side is likely to appeal and the rule goes into effect in January.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Copy of Becerra2_Getty_fullsize_WEB_i.jpg
    HHS offers scant details on post-Roe v. Wade strategy
    After Roe, Dems seek probe of tech’s use of personal data
    After Roe, Dems seek probe of tech’s use of personal data
    Sponsored Content
    Daily Dose Newsletter: Sign up to receive a late afternoon weekday roundup of that day’s breaking news and developments in healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Digital Health
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Data/Lists
      • Rankings/Lists
      • Interactive Databases
      • Data Points
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Nominate/Eligibility
      • 100 Most Influential People
      • 50 Most Influential Clinical Executives
      • Best Places to Work in Healthcare
      • Excellence in Governance
      • Health Care Hall of Fame
      • Healthcare Marketing Impact Awards
      • Top 25 Emerging Leaders
      • Top 25 Innovators
      • Diversity in Healthcare
        • - Luminaries
        • - Top 25 Diversity Leaders
        • - Leaders to Watch
      • Women in Healthcare
        • - Luminaries
        • - Top 25 Women Leaders
        • - Women to Watch
    • Events
      • Conferences
        • Transformation Summit
        • Women Leaders in Healthcare Conference
        • Social Determinants of Health Symposium
        • Leadership Symposium
      • Galas
        • Health Care Hall of Fame Gala
        • Top 25 Women Leaders Gala
        • Best Places to Work Awards Gala
        • Top 25 Diversity Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain Revenue Cycle
        • - Hospital at Home
        • - Workplace of the Future
        • - Strategic Marketing
        • - Virtual Health
      • Webinars
      • Custom Media Event: ESG Summit
    • Listen
      • Podcast - Next Up
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing