The Chamber of Commerce is taking HHS and other federal agencies to court over the price transparency law for insurers

HHS heads to court with Chamber of Commerce over insurer price transparency

August 20, 2021
by John R. Fischer, Senior Reporter
The U.S. Department of Health and Human Services and other federal agencies are heading to court with the U.S. Chamber of Commerce over the new price transparency rule for health insurers. Under the law, health insurers and self-insured plans must disclose on their websites pricing for in-network rates, out-of-network rates and prescription drug rates for plans that begin on or after January 1, 2022.

In a suit filed in the U.S. District Court for the Eastern District of Texas, Tyler division, the chamber calls certain requirements in it, namely the publication of rates in machine-readable-files, "arbitrary and capricious” and has asked a judge to dismiss them, according to Modern Healthcare.

The chamber, along with the Tyler Area Chamber of Commerce, argues that doing so would subject consumers to “vast amounts” of complex technical pricing that computers are designed to read. Proponents say this is in line with a provision of the Affordable Care Act, but the chamber says the provision requires that information be presented in “plain language,” which it claims is inconsistent with machine-readable files.

"Because that complicated, unwieldy format cannot be reconciled with Congress's command that disclosures be made in plain language, the machine-readable-file requirements violate the law and must be set aside," they said in the complaint.

The complaint also suggests that since many patients are covered under employer-sponsored plans, they are unlikely to use the data, and that disclosing prices will allow competitors to see their rates as well. Additionally, the chamber claims that insurers should not have to share their historical net prices for all covered drugs, and that compliance will cost billions in the first year and hundreds of millions annually each year thereafter.

Among the defendants are HHS, CMS, the Department of Labor, the Department of the Treasury and the Internal Revenue Service, all of whom were involved in the enactment of the law. The Justice Department will represent the Labor Department, reports Modern Healthcare.

The chamber is asking that the requirements for historical net prices and machine-readable files be eliminated and that the judge provide injunctive relief from enforcement.

Following the chamber’s lead, the Pharmaceutical Care Management Association also filed a suit against the HHS, the IRS and the Labor Department over the rule, saying that it "offers consumers no actionable information because net prescription drug prices are not charged to consumers and never appear on a bill," and "will likely only confuse them,” reported Reuters.

Passed under the Trump administration in 2019, the price transparency requirement has been met with pushback from insurers, healthcare providers and other opponents, who say the new rule warrants government interference and could potentially undermine competition in insurance negotiations.

Despite going into effect at the beginning of 2020 for hospitals, a survey released in July by found that just over 5% of healthcare providers were complying. This conflicts with American consumer attitudes, with 85% saying in the survey that transparency of healthcare prices, quality metrics and outcomes should be a priority for lawmakers.

CMS has already issued a warning and started auditing hospital websites and reviewing complaints. It also can fine those in violation up to $300 per day.