In a 2-0 decision Tuesday, the U.S. Court of Appeals for the D.C. Circuit reportedly upheld President Donald Trump’s rule that requires hospitals to disclose the prices they negotiate with insurers for an array of tests and procedures.
The ruling is a win for Trump in his effort to make healthcare pricing more transparent.
The American Hospital Association (AHA) and other groups challenged the rule which is set to take effect Jan. 1, 2021, according to Reuters. The hospitals alleged that the new rule would force them to use their limited resources to take on the task of compiling health care costs while trying to reduce competition and would cause confusion for patients when it comes to cost, according to the report.
The rule requires hospitals publicize the rates they negotiate with individual insurers for all services. The idea behind the program is that more price transparency would lead to more competition in the market and eventually lower costs.
OAKLAND, CALIFORNIA – APRIL 17: Oakland Zoo veterinarians Linden West (L) and Monica Fox (R) prepare to x-ray a Sierra Nevada Yellow-Legged Frog during a behind the scenes interactive live stream from the Oakland Zoo on April 17, 2020 in Oakland, California. Since the Oakland Zoo has been closed to the public during the shelter in place they are offering a subscription based service that will feature five weekly behind the scenes live streamed interactive programs that will feature animal keepers and their animals. Viewers are able to interact with the keepers by submitting questions about the animals. (Photo by Justin Sullivan/Getty Images)
While a federal judge ruled in June that the rules were legal, the groups appealed, according to The Wall Street Journal (WSJ).
In writing Tuesday’s decision, Circuit Judge David Tatel wrote that concerns regarding burdens from the hospitals “miss the mark” and said that the disclosures would benefit the “vast majority” of consumers and likely not result in higher drug prices, pointing to Health and Human Services Secretary Alex Azar’s findings, according to the report. (RELATED: Trump Signed Multiple Drug-Pricing Reforms In 2020. Here’s How They Moved The Needle)
“The Secretary weighed the rule’s costs and benefits and made a reasonable judgment that the benefits of easing the burden for consumers justified the added burdens imposed on hospitals,” Tatel wrote, according to Reuters.
Tatel noted that the new rule doesn’t require hospitals to disclose all possible prices, they just must disclose base rates that are negotiated with insurers, according to HealthCareDive.
“It simply requires disclosure of base rates for an item or service, not the adjusted or final payment that the hospital ultimately receives based on additional payment methodologies,” Tatel wrote, according to the report.
Azar called the decision a “big win for American patients” in a tweet Tuesday.
Big win for American patients today. The DC Circuit ruling is another major victory for President Trump’s transformative healthcare agenda. Starting January 1, Americans will have access to the actual prices paid for the most common hospital services.⁰
https://t.co/GSUXqVWMh1— Secretary Alex Azar (@SecAzar) December 29, 2020
However, general counsel of the American Hospital Association Melinda Hatton was disappointed at the ruling, according to the WSJ.
“The AHA continues to believe that the disclosure of privately negotiated rates does nothing to help patients understand what they will actually pay for treatment and will create widespread confusion for them.”