Lawmakers want to put CMS price transparency rule into law and bypass legal challenges

Chuck Grassley
Sen. Chuck Grassley, R-Iowa, is one of several Republican co-sponsors on a bill seeking to codify a controversial price transparency rule. (Gage Skidmore/CC BY-SA 2.0)

A group of Republican senators introduced legislation Tuesday intended to enshrine two controversial price transparency rules into law and negate legal challenges from payers and providers.

The bill called the Health Care PRICE Transparency Act codifies a rule that requires hospitals to post payer-negotiated rates for shoppable services and another rule that requires insurers to post online negotiated rates for in-network providers and allowed amounts for out-of-network providers.

“An extra dose of transparency will bring more accountability and competition to the healthcare industry,” Sen. Chuck Grassley, R-Iowa, one of the bill’s co-sponsors, said in a statement.

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The bills comes a week after hospital groups seeking to shut down the rule lost in court. A federal judge ruled that the Centers for Medicare & Medicaid Services (CMS) did have the authority to impose the rule, which goes into effect on Jan. 1 and requires hospitals to post payer-negotiated rates for 300 services.

While insurers also oppose the rule, none of them joined the lawsuit.

RELATED: Hospitals face major decisions on how to approach price transparency rule after legal defeat

The hospital group’s lawsuit hinges on the intent of Congress. CMS posits in the rule that the Affordable Care Act gives it the authority to mandate the charges be made public.

The controversial healthcare law requires hospitals to post “standard charges,” and CMS argued that such charges include the payer-negotiated rates. Hospitals countered in their lawsuit that the standard charges should only be chargemaster rates, which CMS has also required hospitals to post.

But the judge sided with CMS, albeit by calling the agency’s interpretation of standard charges a “close call.”

The American Hospital Association, which brought the lawsuit, said after the legal defeat that it will appeal the ruling.

RELATED: Insurers: Price transparency rule puts 'staggering,' expensive burden on us

Now, lawmakers are seeking to ensure that the price transparency rules don’t get struck down by the courts.

“There will be continued legal challenges brought by hospital and insurance lobbies to keep their prices and negotiated rates secret until after patients get care,” according to a release from the senators on the bill.

Hospitals have charged that the rule will be a major burden to comply with, especially while facilities are fighting the COVID-19 pandemic. They say that there are hundreds of rates that would need to be posted for each payer such as Medicare or commercial plans.

In addition to Grassley, other GOP co-sponsors are Sens. Mike Braun of Indiana, Joni Ernst of Iowa, Mike Enzi of Wyoming, John Kennedy of Louisiana and Kelly Loeffler of Georgia.

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