WASHINGTON – The Trump administration won a court ruling Tuesday upholding its plan to require hospitals and insurers to disclose the actual prices for common tests and procedures in a bid to promote competition and push down costs.
Health and Human Services Secretary Alex Azar called the decision in federal court in Washington, D.C., “a resounding victory" for President Donald Trump's efforts to open up the convoluted world of health care pricing so patients and families can make better-informed decisions about their care.
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“This may very well be bigger than healthcare itself,” Trump tweeted Tuesday, on the ruling. “Congratulations America!”
But the American Hospital Association, which sued to block the Trump administration regulation and was on the losing side, announced it would appeal. Industry argues that forcing the disclosure of prices negotiated between hospitals and insurers amounts to coercion.
That means the decision by U.S. District Judge Carl J. Nichols may not be the final word.
“American patients deserve to be in control of their healthcare,” Azar said in a statement. “Especially when patients are seeking needed care during a public health emergency, it is more important than ever that they have ready access to the actual prices of health care services.”
Melinda Hatton, general counsel for the hospital association, said the trade group is disappointed by the ruling upholding what she called a “flawed” policy. Hatton, too, cited the coronavirus pandemic, saying that complying with the rule would impose new costs at the wrong time.
“It also imposes significant burdens on hospitals at a time when resources are stretched thin and need to be devoted to patient care,” Hatton said. “The AHA will appeal this decision and seek expedited review.”
The administration's disclosure rule is set to take effect in January, but that timetable is now unclear.
Nonetheless, patient advocate Cynthia Fisher said the judge's decision will help demystify health care costs and is in line with what most people want to see. “Americans want hospitals and insurance companies to reveal their hidden prices and believe that it will lower prices,” said Fisher.
As proposed, the Trump administration rule would require that hospitals:
—publish in a consumer-friendly manner negotiated rates for the 300 most common services that can be scheduled in advance, such as a knee replacement, a Cesarean-section delivery or an MRI scan. Hospitals would have to disclose what they’d be willing to accept if the patient pays cash. The information would be updated every year.
—publish all their charges in a format that can be read on the internet by other computer systems. This would allow web developers and consumer groups to come up with tools that patients and their families can use.
Insurers also oppose the plan, saying it could prompt providers that are accepting a bargain price to try to bid up what they charge if they see that others are getting more. A separate regulation that applies to insurers has not been finalized.
“Forced disclosure of privately and competitively negotiated rates for every single health care item and service will not be helpful to consumers or simplify their health care experience, but will instead undermine competition, push prices higher, and ultimately reduce affordability," the industry group America's Health Insurance Plans said Wednesday. “This is not a solution that works for Americans.”
Judge Nichols was nominated to the court by Trump.
This story corrects spelling of Melinda Hatton's last name.