Hospital groups on Wednesday filed a lawsuit to stop the Trump administration’s price transparency rule that requires hospitals to disclose negotiated rates with insurers.
The suit, filed by the American Hospital Association (AHA), among other hospital groups, argues that the Centers for Medicare and Medicaid Services (CMS) rule violates the First Amendment by provoking compelled speech and reaches beyond the intended meaning of “standard charges” transparency in the Affordable Care Act.
The groups filed the suit in the U.S. District Court in Washington and are asking for an expedited decision to prevent hospitals from needing to prepare for the rule if it is ultimately ruled unconstitutional.
The hospitals argue that the efforts and cost required to follow the rule are overreaching as they would be required to release massive spreadsheets with data on negotiated drugs, supplies, facility and physician care prices. The estimated cost to hospitals to follow the rule is between $38.7 million to $39.4 million.
“The burden of compliance with the rule is enormous, and way out of line with any projected benefits associated with the rule,” according to the suit.
The suit also alleges the Department of Health and Human Services (HHS) does not have the authority to enforce the rule, according to a release from the AHA.
“Instead of giving patients relevant information about costs, this rule will lead to widespread confusion and even more consolidation in the commercial health insurance industry,” Rick Pollack, president and CEO of AHA, said in the release. “We stand ready to work with CMS and other stakeholders to advance real solutions for patients.”
The rule, which was finished last month, is part of the Trump administration’s efforts to increase price transparency and to develop more competition within the health care industry, moves which they say would help lower medical costs.
White House officials have said that a lack of cooperation from hospitals on the regulation indicates they are prioritizing themselves over consumers.
“Hospitals should be ashamed that they aren’t willing to provide American patients the cost of a service before they purchase it,” HHS spokeswoman Caitlin Oakley said. “President Trump and Secretary Azar are committed to providing patients the information they need to make their own informed health care decisions and will continue to fight for transparency in America’s health care system.”
The hospitals say the rule will have the opposite of the intended effect and cause competitors to increase prices to match their rivals to a point where consumers will decide against receiving care.
The Association of American Medical Colleges, the Children’s Hospital Association and the Federation of American Hospitals also signed onto the suit.