Judge Rules Against Hospitals’ Suit Challenging New Price Transparency Rules

A federal judge ruled against the American Hospital Association and other hospital groups that filed suit in December contesting a finalized rule by the U.S. Department of Health and Human Services (HHS) that requires hospitals to disclose price information, including negotiated prices with insurers. According to the hospitals, the regulation was beyond HHS’ authority, a violation of commercial speech and disclosing price information would lead to higher costs. While insurers also pushed back against the regulation, none joined the lawsuit.

But, U.S. District Judge Carl Nichols dismissed the arguments and ruled in favor of HHS. In addition, he dispelled concerns that disclosing negotiated prices could chill negotiations between hospitals and insurers, pointing out patients still see those prices in their explanation of benefits. “Plaintiffs are essentially attacking transparency measures generally, which are intended to enable consumers to make informed decisions; naturally, once consumers have certain information, their purchasing habits may change and suppliers of items and services may have to adapt accordingly,” he wrote in his decision.