Health Law Informer

As we indicated in last week’s blog post , the D.C. Circuit Court’s refusal to uphold HHS’ pharmaceutical price disclosure rule (“RX Rule”) was not a predictor of how the trial court might rule in the closely watched challenge to HHS’ hospital price transparency rule (“Hospital Rule”). In a June 23, 2020 ruling on cross motions for summary judgment, American Hospital Association, et. al. v. Azar, D.C. District Court Judge, Carl Nichols, ruled that HHS did not overstep its authority under Section 2718 of the Public Health Services Act (“Section 2718”) by requiring hospitals to publish their “gross charges”, payer-specific negotiated rates, discounted cash prices, and de-identified minimum and maximum negotiated charges.  

On June 16, the D.C. Circuit Court struck down the Centers for Medicare and Medicaid Services’ (“CMS”) rule issued in May 2019 requiring pharmaceutical companies to disclose the wholesale acquisition cost of drugs over $35 in their direct-to-consumer television advertisements (“RX Rule”). Similar to the RX Rule, the Hospital Price Transparency Rule, issued on November 27, 2019, requires hospitals to publish, among other information, payor-specific rates for certain services on their websites beginning on Jan 1, 2021 (“Hospital Rule”). Both rules stem from the Trump administration’s stated efforts to improve the nation’s health care quality and transparency, and both were met with swift legal opposition. The Hospital Rule litigation, American Hospital Association et al v. Azar, is currently before the U.S. District Court for the District of Columbia. While the D.C. Circuit Court’s RX Rule decision could be viewed as a predictor of the outcome of the Hospital Rule litigation, the alleged statutory authority underlying the Hospital Rule is different than the statutory authority underlying the RX Rule.  Therefore, the Circuit Court’s ruling in the RX Rule litigation may not be an accurate barometer of the likely outcome in the Hospital Rule litigation.

As another mark of progress in the fight against opioid addiction, Governor Wolf signed Senate Bill 572 (the “Act”) into law on November 27, 2019, requiring prescribing providers (referred to as “Prescribers”) to take several additional steps before issuing a prescription for an opioid in certain treatment situations. Specifically, the Act’s requirements kick in before a Prescriber can issue a patient the first prescription in a single course of treatment for chronic pain with a controlled substance containing an opioid.  

Google has confirmed that it is working with Ascension, one of the nation’s largest health systems in a project that will involve the health data of millions of Americans.  Google and Ascension have partnered in a project to store and analyze patient data with the intended goal of using Google’s artificial intelligence tools to enhance patient care and medical decision making.  As a result of this partnership, it has been estimated that over 100 Google employees may have access to sensitive patient data such as name, birth date, diagnoses and treatments.  Such access by Google to millions of patient’s health data has resulted in some concern over how the data will be protected, including a recently announced inquiry into the relationship by the U.S. Department of Health and Human Services’ Office of Civil Rights (“OCR”).  OCR has stated that it “would like to learn more information about this mass collection of individuals’ medical records with respect to the implication for patient privacy under HIPAA.”  Ascension has said that the project with Google has complied with the law and followed the healthcare organization’s “strict requirements for data handling.” 

We will continue to follow this important story.  Several other tech companies continue to try to gain a bigger share of America’s health care market, which will all have to be balanced with patient data privacy and security concerns.

CMS today issued its Price Transparency Requirements for Hospitals Final Rule, which will go into effect on January 1, 2021. (CMS had initially proposed that it go into effect January 1, 2020, but agreed that that deadline was too “challenging”).  Hospitals will be required to post on a public website, among other things, the “payer-specific negotiated charges” for each payer and plan.  These negotiated rates have typically been subject to lock and key treatment through confidentiality agreements.  Noncompliance with the rules may result in corrective action plans (CAPs), civil monetary penalties (CMPs) of $300 per day (indexed to an inflation factor), and a public notice of the CMP on a CMS website. Under the rules, CMS can issue “subsequent” CMPs for continued noncompliance. A link to the Final Rule is here: https://www.hhs.gov/sites/default/files/cms-1717-f2.pdf.

The Trump Administration has also issued a proposed “Transparency in Coverage” rule that would require plans to give consumers access to a tool providing an estimate of their cost-sharing liability for all covered healthcare items and services.  It would also require plans to list on a website their negotiated rates for in-network providers and the allowed amounts paid for out-of-network providers.  A link to the Proposed Rule is here: https://www.hhs.gov/sites/default/files/cms-9915-p.pdf. 

We will continue to analyze and monitor these rules.  Stay tuned.