Man in hospital.

Following the Yellow Brick Road Toward Hospital Price Transparency

By Laura Karas

The Center for Medicare and Medicaid Services (CMS) scored a victory on the price transparency front in June of this year with the D.C. Circuit decision in American Hospital Association v. Azar, No. 1:19-cv-03619-CJN.

The CMS final rule at issue in the suit requires price transparency for hospital items and services. The legal victory will begin to remedy the information asymmetry that has kept patients in the dark about hospital prices for far too long.

As the final rule states, its aim is to empower patients to become “active consumers” of health care “so that they can lead the drive towards value.” The rule is part of a federal effort to improve the ability of patients to make informed choices based on price and gain leverage to negotiate unreasonable hospital charges.

The American Hospital Association, the Association of American Medical Colleges, and several other groups brought suit to contest the CMS final rule mandating that hospitals make public and update annually certain “standard charges” for hospital “items and services.”

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