On December 29, 2020, three days before the implementation date, the U.S. Court of Appeals for the D.C. Circuit upheld the Centers for Medicare & Medicaid Services (“CMS”) price transparency final rule. Beginning January 1, 2021, hospitals will be required to make public their standard charges for 300 shoppable services, including 70 services identified by CMS as required by the November 27, 2019 final rule. Hospitals must report the following for each item or service:
- Gross charges;
- Payer-specific negotiated charges;
- Standardized discounted cash prices;
- De-identified minimum negotiated charges; and
- De-identified maximum negotiated charges.
Hospitals had argued that the final rule violated the section 2718(e) of the Public Health Service Act, the Administrative Procedure Act, and the First Amendment. The Court, in an opinion written by Judge Tatel, held that section 2718(e) is “best interpreted as requiring disclosure of more than list prices.” The Court rejected arguments regarding the complexity of implementing the transparency requirements, citing heavily to the final rule preamble text and responses to comments received. Justice Tatel writes that “[t]he 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.”
The ruling comes on the heels of a December 18, 2020 CMS special alert reminding hospitals that the requirements are effective beginning January 1, 2021 and that CMS will monitor a “sample of hospitals” to determine compliance with its requirements (HL Pulse post here). CMS has also created a website with other price transparency resources (HL Pulse post here). The incoming Biden Administration has not yet announced their approach to the policy of price transparency.
Please contact members of the Norton Rose Fulbright healthcare team if we can assist with your implementation of the price transparency requirements.
