Hospitals Sue Trump Administration as They Try to Block Transparent Pricing Rule

An emergency sign directs patients and staff to the emergency room at the Kaiser Permanente San Diego Medical Center in San Diego, California on April 17, 2017. (Mike Blake/Reuters)

Seven hospitals and hospital groups filed a lawsuit in an effort to block the Trump administration’s recently announced transparent pricing rule.

The plaintiffs said they want to provide clear prices to patients but not in the way that the Centers for Medicare & Medicaid Services has arranged.

“America’s hospitals and health systems are committed to providing patients with the financial information they need to make informed decisions about their health care. That is the out-of-pocket amount patients will be expected to pay for that care, recognizing that each patient’s circumstances will be differently affected by numerous variables in [their] her health insurance coverage. Even providing out-of-pocket information to patients is challenging, however; it requires a number of different stakeholders, including commercial health insurers, to work with hospitals to develop turnkey technology to provide real-time accurate estimates,” the hospitals said in a statement.

“And while there is no actual statutory basis for the federal government to require hospital disclosure of out-of-pocket costs, the hospital field has repeatedly urged CMS to bring together on a voluntary basis the various stakeholders needed in order to develop an effective means to provide all patients with information on out-of-pocket costs.”

Instead, the government agency issued a rule requiring that hospitals publicly post pricing for every item and service.

“In plain English: The Final Rule requires each hospital in the nation to publicize on its website a huge quantity of confidential pricing information reflecting individually negotiated contract terms with all third-party payers, including all private commercial health insurers, with which the hospital contracts,” the statement read, adding that the rule “is unlawful.”

The groups asked the U.S. District Court for the District of Columbia to block the rule.

President Donald Trump ahead of the NATO meeting in Watford, England, on Dec. 3, 2019. (NATO handout via Getty Images)

In a statement, the Trump administration criticized the lawsuit.

“Hospitals should be ashamed that they aren’t willing to provide American patients the cost of a service before they purchase it,” Health and Human Services spokesperson Caitlin Oakley said.

“President Trump and Secretary [Alex] 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 Trump administration’s rule, if not blocked, would go into effect in Jan. 2021. The administration said the rule would cost hospitals more than $23 million annually, using 2016 dollars.

If hospitals don’t comply with the rule, they face fines of up to $300 a day.

The administration said in a mid-November statement that Trump’s executive order announcing the rule would mean hospitals must make public all standard hospital charges in a single data file.

“We believe the American people have a right to know the price of services before they go to visit the doctor,” Trump said in a statement at the time.