Two chambers of commerce, the Chamber of Commerce the United States of America and the Tyler (TX) Area Chamber of Commerce, filed a lawsuit on August 10, 2021, in the US District Court for the Eastern District of Texas against the United States departments of Health and Human Services, Labor and Treasury to block the implementation of two provisions contained in the federal regulations entitled Transparency in Coverage (“Rule”).
The first challenged provision requires health plans to post on a website internal pricing data, including allowed amounts, in-network rates, and the negotiated rates for all services and the “historical net price” of prescription drugs, in “machine-readable” (searchable) files. The second provision being challenged requires the inclusion of the “historical net price” of prescription drugs in the machine-readable files. The provisions are set to go into effect for “plan years” beginning after January 11, 2022. Another major provision of the Rule, the one requiring insurers to provide “cost-sharing information” to individuals upon request via a website or in paper form, is not being challenged in the lawsuit.
The bases for the lawsuit are that: (i) both requirements exceed the agencies’ authority under the Administrative Procedures Act and are arbitrary and capricious; and (ii) the requirement to include the “historical net price” of prescription drugs in the machine-readable file violates the statutory authority granted to the agencies under the Affordable Care Act and the Public Health Services Act. The plaintiffs are seeking a declaratory judgment that the challenged provisions are unlawful, an order vacating and enjoining the enforcement of the provisions, and an award of their fees and costs associated with the litigation.
This lawsuit comes after challenges to other Trump administration-era health care price transparency rules achieved mixed results. In 2019 a group of pharmaceutical companies successfully challenged a federal rule requiring the disclosure of wholesale acquisition prices of prescription drugs in television advertisements. In 2020 federal courts rejected a challenge by the American Hospital Association and others to block the implementation of the federal rule requiring hospitals to post their charges for items and services, including negotiated rates, online. That rule went into effect on January 1, 2021.
The case is Chamber of Commerce of The United States of America and Tyler Area Chamber of Commerce v. United States Department of Health And Human Services, Centers For Medicare & Medicaid Services, Department of Labor, Employee Benefits Security Administration, Department of The Treasury, Internal Revenue Service, and The Current Heads of Those Agencies in their Official Capacities, Civil Action No. 6:21-cv-309, United States District Court For The Eastern District of Texas, Tyler Division
If you have any questions about this case or any of the price transparency rules affecting the health care industry, please don’t hesitate to contact: Christopher Raphaely, John Shire, Gregory Fliszar, Aselle Kurmanova, Danielle Sapega, or Ryan Portugal.