U.S. Markets closed

Hospital groups file lawsuit to block Trump's price transparency rule

Dec 4 (Reuters) - Hospital groups have challenged the Trump administration's rule that requires hospitals to be more transparent about prices they charge patients for healthcare services, according to a lawsuit filed on Wednesday.

The plaintiffs, including the nonprofit American Hospital Association (AHA), are looking to block the rule issued last month mandating hospitals to publish on the internet pricing information for every item and service they offer.

"The rule... does not provide the information patients need. Mandating the public disclosure of negotiated charges would create confusion about patients' out-of-pocket costs, not prevent it," the plaintiffs wrote.

The rule, seen as a violation of the First Amendment by the hospital groups, also demands confidential information on individually negotiated contract terms with all third-party payers, including private commercial health insurers.

Such disclosures would eliminate hospitals' ability to negotiate pricing with insurers, which would undermine competition and blunt incentives for health insurers to sign arrangements that could potentially lower costs, the plaintiffs said.

This is not the first time that the industry has challenged U.S. President Donald Trump's efforts to lower drug prices.

In July, a federal judge sided with drugmakers by striking down a rule that would have forced pharmaceutical companies to include the wholesale prices of their drugs in television advertisements.

The AHA, along with the Association Of American Medical Colleges and Federation Of American Hospitals, among others, said it would press for speeding up the decision on the rule, so hospitals do not spend time and resources preparing for what may be invalidated.

The rule is expected to come into effect on Jan. 1, 2021.

(Reporting by Saumya Sibi Joseph in Bengaluru; Editing by Shinjini Ganguli)