Three federal appellate judges on Thursday appeared likely to uphold the Trump administration's hospital price transparency rule, which is scheduled to go into effect in January.
The panel aggressively, and at times incredulously, questioned hospitals' arguments as to why the rule should be deemed unconstitutional. The criticism indicated that the U.S. Court of Appeals for the District of Columbia Circuit may follow in the footsteps of a District Court judge who upheld the rule.
Under the hospital price transparency rule, hospitals must publish their standard charges online in a machine-readable format. They will need to create at least 300 "shoppable" services, including 70 selected by the CMS. Under the rule, hospitals would have to disclose the rates they negotiate with third-party payers.
One of the key issues in the oral arguments are whether Congress' permission for CMS to force hospitals to publish "a list of "standard charges for items and services" under the Public Health Service Act means CMS can force hospitals to publish rates they negotiate with insurers, or just chargemaster prices.
Williams & Connolly partner Lisa Blatt, who represented the American Hospital Association, claimed that it is more reasonable to ask hospitals to disclose chargemaster prices instead of negotiated prices. She also claimed negotiated prices may be misleading because they may not accurately reflect patients' out-of-pocket costs.
But the judges pointed out that chargemaster prices are often highly inflated and may also be misleading.
"I'm not buying your argument to the extent that you are making it that the chargemaster rate is discernibly more transparent than what the government is proposing," Judge Harry Edwards said. "If I'm hearing you correctly, your principal objection has nothing to do with worrying about transparency. It's just the government's approach is more burdensome on you and more expensive."
The judges also clarified that the transparency statute's purpose includes communicating prices to the public, including patients.
Courtney Dixon, counsel representing the Trump administration, said that even if negotiated rates are not a perfect reflection of patients' out-of-pocket costs, patients could use the numbers to at least try to estimate their bills.
The judges also puzzled over hospitals' argument that the numbers for what an item or service would cost ahead of time were "unknowable." Blatt said that costs can vary based on severity.
Dixon said if a certain rate disclosure is not relevant, a hospital can just say the rate is not available.
Despite hospitals' pleas for CMS to delay implementation of the price transparency requirements amid the COVID-19 pandemic, a White House official said there are no plans to give hospitals additional time to comply.
