By Allison Shelton and Beth Anne Jackson, Brown & Fortunato, P.C.
On December 29, 2020, the D.C. Circuit Court of Appeals issued a decision that effectively upholds the Hospital Price Transparency Rule. Meanwhile, the Centers for Medicare and Medicaid Services (CMS) signaled its intent to actively enforce the rule. Accordingly, as of January 1, 2021, hospitals are expected to have a public website that displays pricing information for inpatient and outpatient items and services furnished by the hospital.
The U.S. Department of Health and Humans Services (HHS) issued the Hospital Price Transparency Rule pursuant to the Affordable Care Act (ACA) and President Donald Trump’s Executive Order Number 13877. The ACA requires hospitals to establish and make publicly available “a list of the hospital’s standard charges for items and services provided by the hospital” in accordance with rules established by HHS. Following adoption of the ACA, HHS initially required hospitals to make their 
chargemasters publicly available.
On June 24, 2019, President Trump issued Executive Order Number 13877 that directed HHS to propose a rule requiring hospitals “to publicly post standard charge information, including charges and information based on negotiated rates and for common or shoppable items and services.” Approximately two months later, HHS issued a proposed rule which ultimately received around four thousand comments. The Final Hospital Price Transparency Rule was adopted on November 27, 2019. To provide hospitals time to comply, HHS delayed the rule’s effective date until January 1, 2021.
Under the Hospital Price Transparency Rule, hospitals must publish on publicly available websites the hospital’s regular rates for any item, service, or service package that could be provided by the hospital during an inpatient admission or outpatient visit. A hospital’s regular rate is any rate set in advance through, for example, contracts or fee schedules, for an identifiable group of patients. Moreover, a hospital must publish the following regular rates for items and services provided by the hospital: (1) the hospital’s gross charge, which is typically reflected on the hospital’s chargemaster; (2) any standard discounted charge for cash paying patients; (3) payer-specific negotiated charge; (4) the hospital’s de-identified maximum charge; and (5) the de-identified minimum charge. In disclosing payer-specific negotiated charges, hospitals must identify the name of the payer and any applicable plan to which the rate applies.
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A hospital’s pricing information must be available in a machine-readable file that lists the regular rates for each item, service, and service package provided by the hospital. Also, a hospital must publish the information through a consumer-friendly list that includes at least 300 shoppable services. Services that can be scheduled in advance, such as joint replacements, physical therapy, and certain infusion services, are considered “shoppable services.” The list of such services must include the regular rates for the shoppable service and any items and services, such as room and board, medications, and laboratory tests, customarily provided with the shoppable service. The Hospital Price Transparency Rule does not mandate the format of the consumer-friendly list of shoppable services. However, the rule requires that the list be searchable by service, billing code, and payer. Further, HHS deemed that certain price estimator tools used by hospitals may satisfy the requirement for a list of shoppable services.
The Hospital Price Transparency Rule is burdensome and requires disclosure of information historically considered confidential in the industry. Nonetheless, the rule has withstood legal challenges in the court system, and CMS has signaled its intent to enforce the rule.
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Following HHS’s adoption of the Hospital Price Transparency Rule, the American Hospital Association (AHA), along with other associations, hospitals, and hospital systems, filed a lawsuit against HHS that challenged the legality of the rule. The U.S. district court granted summary judgement in favor of HHS. Thereafter, AHA appealed. On December 29, 2020, the D.C. Circuit Court of Appeals found that the Hospital Price Transparency Rule did not violate the ACA, the Administrative Procedures Act or the First Amendment. As a result, the court upheld summary judgement in favor of HHS.
During the pendency of the appeal, CMS published a Special Edition of its news publication, MLNConnects, on December 18, 2020. In the publication, CMS stated that it “plans to audit a sample of hospitals for compliance starting in January.” Under the Hospital Price Transparency Rule, CMS has the authority to assess hospital compliance with the rule and to require hospitals to submit and implement corrective action plans. In some situations, CMS may also assess civil monetary penalties in response to a hospital’s non-compliance.
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Given the recent decision from the D.C. Circuit Court of Appeals and CMS’s stated course of action, hospitals should plan to publish and annually update pricing information on their websites. Unless and until the new administration sets forth an alternative course of action, the Hospital Price Transparency Rule appears to be the law of the land.