June 26, 2020
A federal judge has upheld the Trump administration’s policy requiring hospitals to publish previously secret prices for health care services, giving the administration a major win in its quest to increase price transparency.
The transparency rule, scheduled to take effect in January 2021, requires hospitals to publicly release the rates they negotiate with insurers for all services or face a penalty of up to $300 per day for violating the policy.
The American Hospital Association claimed in a lawsuit that the administration did not have the authority to require publication of privately negotiated prices and in doing so, violated the industry’s First Amendment rights. Judge Nichols stated consumers will have more control over their health care by having the ability to make price comparisons between hospitals before scheduling services.
Outlook: Price transparency has been a focus of the administration in its efforts to reduce health care costs for the consumer, and the Association's American Health Policy Institute (AHPI) has supported these price transparency measures. The AHA plans to appeal the decision, stating the rule imposes “significant burdens on hospitals at a time when resources are stretched thin.”
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