Hospital Group Notifies Court of Relevant Supplemental Authority Re: Disclosure of Negotiated Rates, (Sept. 21, 2020)

September 21, 2020


Mr. Mark J. Langer
Clerk of the Court
United States Court of Appeals for the D.C. Circuit
E. Barrett Prettyman U.S. Courthouse and
William B. Bryant Annex
333 Constitution Avenue, NW
Washington, D.C. 20001

Re: American Hospital Association et al. v. Azar, No. 20-5193 (argument
scheduled Oct. 15, 2020)

Dear Mr. Langer:

Under Federal Rule of Appellate Procedure 28(j), Appellants attach a final
HHS rule that expressly builds upon HHS’s challenged price-disclosure rule to
impose additional reporting obligations under Medicare. 85 Fed. Reg. 58,432,
58,873-92 (Sept. 18, 2020). The rule supplements hospitals’ reporting obligations for diagnosis-related groups—the suites of items and services CMS uses to reimburse hospitals for treating Medicare patients. Until now, CMS relied in part on hospitals’ gross charges for items and services—as reflected in chargemasters— to generate diagnosis-related-group reimbursements. Id. at 58,874-76; AHA Br. 11-12. But “to reduce the Medicare program’s reliance on the hospital chargemaster,” the rule imposes a new approach based on insurer-negotiated rates. 85 Fed. Reg. at 58,875. As of January 1, 2021, hospitals must report the de-identified median negotiated rate, for each diagnosis-related group, among all contracted insurers participating in the Medicare Advantage program. Id. at 58,891-92. This data will ultimately “replace the current use of gross charges that are reflected on a hospital’s chargemaster” in CMS’s diagnosis-related-group ratesetting. Id. at 58,875. If a hospital fails to comply with the new reporting requirements, “then potentially no Medicare payments will be provided.” Id. at 58,890. View full details below.

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