AHA to appeal court decision on public disclosure of negotiated rates

A federal judge in Washington, D.C., today dismissed 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. AHA plans to appeal on an expedited basis.

The lawsuit challenged the Department of Health and Human Services’ claim that it has statutory authority to require and enforce a 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.” It also argued that the provision violates the First Amendment by compelling the public disclosure of individual rates negotiated between hospitals and insurers in a manner that will confuse patients and unduly burden hospitals.

In a statement, AHA General Counsel Melinda Hatton said, “We are disappointed in today’s decision in favor of the administration’s flawed proposal to mandate disclosure of privately negotiated rates. The proposal does nothing to help patients understand their out-of-pocket costs. It also imposes significant burdens on hospitals at a time when resources are stretched thin and need to be devoted to patient care. Hospitals and health systems have consistently supported efforts to provide patients with information about the costs of their medical care. This is not the right way to achieve this important goal. 

“Today’s decision was also premised on the erroneous conclusion that the ‘standard charges’ referenced in current law can be interpreted to include rates negotiated with third-party payers. While the Court ruled that this was a close call, that conclusion clearly does not reflect the experience of hospitals and health care systems. The AHA will appeal this decision and seek expedited review.”  

Joining the AHA in the lawsuit were 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.