Hospitals lose first challenge to Trump price transparency rule

price transparency in healthcare

We all took a step closer to price transparency in America on Tuesday! That’s when the US District Court for the District of Columbia sided with the government’s effort to promote greater price transparency amongst hospitals. At issue? A lawsuit by the American Hospital Association (AHA) against the Trump price transparency rule, originally put forth in July 2019.


The Trump price transparency rule requires hospitals to disclose secret rates they negotiate with insurance companies on 300 shoppable services. It’s set to take effect in January 2021. The AHA is trying to delay or kill the rule because they feel that disclosing their prices is tantamount to forcing the disclosure of trade secrets. They believe their interests are protected by the Uniform Trade Secrets Act of 1979 and the First Amendment.


The court disagreed. In siding with the government, the court believes the Department of Health and Human Services did not overstep their rule-making authority. Despite losing this battle, the war is not over. The AHA and other hospital organizations will appeal this ruling.


Room for compromise on the Trump price transparency rule?

In a separate court case, the AHA signaled willingness to compromise according to Becker’s Hospital Review. When the Trump administration finalized the price transparency rule for hospitals in November 2019, they made another proposal. That insurers should tell consumers how much they would owe out of pocket for services prior to seeking out those services.


Based on that scenario, hospitals may consider dropping their case against the government. If hospitals only have to tell patients what their out-of-pockets costs would be without revealing negotiated rates for all services for all insurers, hospitals could avoid sharing all of their pricing.


Video: Background to the Trump Price Transparency Rule

This video provides some background to the rule that is precipitating several legal actions by the AHA.


Physicians and outpatient facilities: this affects you too!

Physicians, surgery centers and independent practitioners need to get ahead of the curve. Don’t wait for hospitals and insurers to list your rates. Price transparency, when done correctly, can be a customer service satisfier. Whether it’s providing the consumer the bundled rate, the negotiated rate or the cash rate for their healthcare services, the consumer will find it much easier to determine their costs through the physician’s site rather than a clunky hospital or insurer’s site. So don’t think this only affects hospitals. Consumers will expect price transparency from you too!


Dr. Jonathan Kaplan is a board-certified plastic surgeon based in San Francisco, CA and founder/CEO of BuildMyBod Health, a price transparency-lead generation platform. You can watch him operate and educate @realdrbae on Instagram, Snapchat and TikTok.



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