Hospitals Call for Delay of Price Transparency Rule Due to COVID-19

Hospital groups are urging HHS to delay requirements mandating the public disclosure of privately negotiated rates about a week after a federal judge dismissed their case challenging the upcoming price transparency rule.

Implementation of the price transparency rule as expected in January 2021 would place excessive burdens on hospitals struggling to combat COVID-19, the American Hospital Association, Association of American Medical Colleges, Children's Hospital Association, and Federation of American Hospitals said in a recent letter to top government health officials.

“We anticipate the challenges associated with COVID-19 will continue for the foreseeable future, and perhaps until we develop and deploy a vaccine or reliable treatment,” the organizations wrote. “Resources of hospitals and health systems at this critical time must be devoted to patient care. While we disagree with the agency on the value of public disclosure of negotiated rate information (as opposed to estimated out-of-pocket costs), we hope that you will agree that advancing this policy is not essential at this moment.”

The organizations are looking to postpone implementation of the price transparency rule until the matter is settled by the courts.

On June 23rd, the US District Country for the District of Columbia upheld the hospital price transparency rule despite arguments that the rule exceeds HHS’ authority and violates hospitals’ First Amendment rights by forcing the providers to publicize privately negotiated rates and other pricing information.

“The publication of charges will allow the agency to further its interest of informing patients about the cost of care, which will in turn advance its other interest — bringing down the cost of health care,” Judge Carl Nichols wrote in his ruling.

AHA’s general counsel Melinda Hatton said the association will appeal the ruling, arguing that the price transparency rule “does nothing to help patients understand their out-of-pocket costs” and “imposes significant burdens on hospitals at a time when resources are stretched thin and need to be devoted to patient care.”

AHA highlighted the latter issue in its recent plea to HHS regarding the price transparency rule.

“Even attempting to comply with the rule will require a significant diversion of financial resources and staff time that hospitals and health systems cannot afford to spare as they prepare to or care for patients with COVID-19,” AHA and the other organizations wrote. “Asking information technology and clinical care departments to refocus their efforts at this juncture is, at best, unwise, as the past week has demonstrated that significant new outbreaks of the virus can occur in locations that were previously unaffected or had very few cases.”

HHS estimates in the rule’s proposal that compliance should only take about 12 hours for hospitals. However, hospitals have reported that a skinnier version of the rule that required hospitals to publish just their chargemasters in a machine-readable, accessible format took more than 100 hours. Compliance with the new rule could take months to complete, some hospital leaders said.

The hospital groups pointed to instances where CMS has relaxed implementation of deadlines for rules in light of the COVID-19 pandemic. In April, for example, the agency delayed implementation of the long-awaited healthcare interoperability rule.

“Due to the public health emergency posed by COVID19, CMS is exercising ... enforcement discretion ... to adopt a temporary policy of relaxed enforcement in connection to implementation of the Interoperability and Patient Access final rule,” the agency stated. “We believe that the announcement of the exercise of enforcement discretion is a statement of agency policy not subject to the notice and comment requirements of the . . . APA.”

The groups requested CMS to take a similar stance with the price transparency rule, adding that the agency has also already waived statutory deadlines that apply to its rulemaking due to the pandemic.

No response from CMS was available as of July 2. However, lawmakers are looking to make the price transparency rule law.

Introduced by Senator Chuck Grassley (R-IA) on June 30th, the PRICE Transparency Act seeks to codify the hospital price transparency rule and a similar rule requiring payers to publicly share cost-sharing and in- and out-of-network provider rates.

Lawmakers devised the bill to prevent legal challenges from delaying access to healthcare pricing information.

“An extra dose of transparency will bring more accountability and competition to the health care industry. It’s time for Americans to have more financial information available to them when going to the hospital and working with their insurance companies. I applaud President Trump’s continued commitment to bring more sunlight to the health care industry,” Grassley said in a press release.