[00:00:01] Speaker 02:
Case number 20-5193, American Hospital Association et al.

[00:00:06] Speaker 02:
Appellants versus Alex M. Azar II in his official capacity as Secretary of Health and Human Services.

[00:00:13] Speaker 02:
Ms.

[00:00:13] Speaker 02:
Blatt for the Appellants, Ms.

[00:00:14] Speaker 02:
Dixon for the Appellee.

[00:00:17] Speaker 07:
Thank you, and may it please the court.

[00:00:19] Speaker 07:
My name is Lisa Blatt, and I represent the hospitals challenging the agency's price disclosure rule, which, absent this court's intervention, will go into effect on January 1, 2020.

[00:00:32] Speaker 07:
Hospitals wholeheartedly agree that patients should know their out-of-pocket cost for receiving health care.

[00:00:42] Speaker 07:
But this rule does not achieve that objective and is also invalid.

[00:00:46] Speaker 07:
First, the statute forecloses the agency's interpretation.

[00:00:51] Speaker 07:
And second, the rule violates both the First Amendment and the APA because the rule is unworkable, it requires hospitals to misinform their patients, and the rule grossly misapprehended compliance burdens.

[00:01:07] Speaker 07:
If I could start with the statute.

[00:01:09] Speaker 07:
A requirement for hospitals to list their standard charges for items and services unambiguously refers to the gross charges that appear on hospitals charge masters.

[00:01:22] Speaker 07:
Those are the only default asking prices that universally apply to all payers.

[00:01:29] Speaker 07:
This was such an obvious conclusion that the agencies in 2004 went through a rulemaking

[00:01:35] Speaker 07:
taking it for granted that the statute referred to the gross charges.

[00:01:40] Speaker 05:
Isn't your position on appeal, though, Ms.

[00:01:44] Speaker 05:
Platt?

[00:01:46] Speaker 05:
I thought you conceded on appeal that this is ambiguous.

[00:01:48] Speaker 05:
In the district court, you argued it was clear.

[00:01:51] Speaker 05:
But isn't your position here that it's ambiguous?

[00:01:53] Speaker 05:
Don't you concede that?

[00:01:55] Speaker 07:
No, I think in a couple places in the brief, we say it unambiguously refers to the gross charges.

[00:02:01] Speaker 07:
Now, the key thing, though, which is I definitely agree the emphasis on the appellate brief is that the interpretation fails step two.

[00:02:11] Speaker 07:
But I do think it's important that the step one.

[00:02:18] Speaker 05:
I'm sorry.

[00:02:19] Speaker 05:
My internet is spotty.

[00:02:22] Speaker 05:
Could you just repeat what you just said?

[00:02:24] Speaker 07:
Of course.

[00:02:25] Speaker 07:
So the brief makes two arguments, both that the statute is unambiguous and that even assuming there's ambiguity, the rule would fail step two.

[00:02:37] Speaker 07:
And I was just saying, I think the step one arguments are important because they certainly do go a long way in undermining the agency's interpretation under step two.

[00:02:46] Speaker 05:
And it's significant whether it's- What do you do with the second phrase, the including phrase in the statute?

[00:02:54] Speaker 05:
Because the government says standard charges include charges for DRGs.

[00:03:08] Speaker 05:
So by definition, in the plain language of the statute, standard charges are not limited to gross charges.

[00:03:18] Speaker 07:
So standard charges for items and services are limited to gross charges.

[00:03:24] Speaker 07:
And the including phrase is not being used illustrative here because by definition, and the government concedes this,

[00:03:31] Speaker 07:
Charges for DRGs are not, by definition, charges for items and services.

[00:03:37] Speaker 07:
So this language, the including language, is in here because the items and service language would otherwise exclude it.

[00:03:44] Speaker 07:
And so the government tries to use that including to say that you can interpret the statute to mean payer-specific negotiated rates.

[00:03:52] Speaker 07:
But that is incredibly implausible that the Congress would refer.

[00:03:57] Speaker 05:
I don't think grammatically that's the way the sentence works.

[00:04:02] Speaker 05:
The way to read this sentence is a list of the hospital's standard charges, dot, dot, dot, including four diagnosis-related groups.

[00:04:15] Speaker 05:
The four before DRGs tells us we're talking about charges.

[00:04:23] Speaker 07:
Sure, I think that's fair.

[00:04:25] Speaker 07:
I think, though, what the statute is doing, because, again, we know by definition that it's not in items and services.

[00:04:32] Speaker 07:
But I think here's where we get to the more fundamental problem with the government's reading.

[00:04:36] Speaker 07:
The government may get you somewhere in saying that that injects ambiguity, although we don't think it does.

[00:04:41] Speaker 07:
But if you go there and say it's ambiguous, it doesn't allow the secretary to go to all payer-specific negotiated rates, and here's why.

[00:04:50] Speaker 07:
That reference is referring to a non-negotiable preset DRG rate by Medicare.

[00:04:58] Speaker 07:
And what the government tries to say is, well, that creates an ambiguity that allows us to get to all negotiated rates, not just the ones that aren't negotiated, for all private payers and rates that have nothing to do with DRGs.

[00:05:11] Speaker 07:
And so I don't think that helps them.

[00:05:12] Speaker 05:
But if I could also get to... Well, but it says, the word is including.

[00:05:16] Speaker 05:
It doesn't say only.

[00:05:17] Speaker 05:
It doesn't say

[00:05:19] Speaker 05:
The standard doesn't, the statute doesn't say each hospital operate, it doesn't say a list of the hospital's standard charges for items and services provided by the hospital and for diagnosis groups says including.

[00:05:34] Speaker 05:
So obviously it's a broader category.

[00:05:37] Speaker 05:
Well, the example we give in our brief is you can- Standard charges is broader than just- Right?

[00:05:43] Speaker 05:
I'm just looking at the language of the statute.

[00:05:45] Speaker 07:
Sure, and the example we give in our brief is that you could have a-

[00:05:49] Speaker 07:
the language of a statute that says states include Puerto Rico.

[00:05:53] Speaker 07:
And that is used the word including, and it's not being used illustratively.

[00:05:58] Speaker 07:
It's just doing in contraindication to what the statute might otherwise say.

[00:06:03] Speaker 07:
The problem with the, even if you think that there's some ambiguity in there, there's still

[00:06:11] Speaker 07:
three problems with trying to say that a standard charge means all payer-specific negotiated charge, because a standard charge still requires some representative charge, and each and every individually and specifically negotiated rate, by definition, is not representative.

[00:06:31] Speaker 07:
It's bespoke, it's customized, it's

[00:06:33] Speaker 07:
It's the unordinary and the customized rate.

[00:06:38] Speaker 07:
It's just not representative or common or ordinary.

[00:06:41] Speaker 07:
And second, there's no question that this statute requires disclosure of knowable numbers.

[00:06:47] Speaker 07:
You have to know the number in order to disclose it.

[00:06:50] Speaker 07:
And many negotiated rates just don't have knowable numbers.

[00:06:53] Speaker 07:
They rather depend on complex algorithms that would vary depending on patient care.

[00:06:59] Speaker 07:
And that's simply a problem that the Department of Justice never addresses.

[00:07:03] Speaker 07:
And the third problem with this, and I think this goes back to the step one argument, is that this is an unprecedented disclosure regime.

[00:07:11] Speaker 07:
It really is.

[00:07:12] Speaker 07:
And it's implausible that Congress intended this provision of the Affordable Care Act to usher in a sea change in industry practice without anyone noticing until 2019.

[00:07:23] Speaker 07:
The agency went through two rule makings, one in 2014.

[00:07:27] Speaker 05:
Can I go back to your statutory question for just a minute, the early one?

[00:07:32] Speaker 05:
Under your theory,

[00:07:34] Speaker 05:
If this were limited to gross charges, am I right that that would result in disclosing charges for only about 10% of patients?

[00:07:47] Speaker 05:
Is that right?

[00:07:48] Speaker 07:
So there's no question that- Is that right?

[00:07:53] Speaker 07:
Is that right?

[00:07:54] Speaker 07:
So you're right that patients do not largely pay gross charges because most patients are covered under Medicare or insurance.

[00:08:03] Speaker 07:
What is also correct is that the statute isn't directed to what patients pay, because hospitals would never know that.

[00:08:09] Speaker 07:
So there's no question the statute can't be talking about patients' out-of-pocket costs, because hospitals, of course, don't have the patient-specific information.

[00:08:17] Speaker 05:
Well, my only point, yeah, but, right.

[00:08:19] Speaker 05:
So it won't cover, under the government's theory, under the government's regulation, it won't include everybody, but will include a lot more than just 10%.

[00:08:27] Speaker 05:
Well, it doesn't include- And my reason for asking the question is, isn't it perfectly reasonable for the government

[00:08:33] Speaker 05:
to interpret this statute in such a way that it promotes the maximum amount of disclosure?

[00:08:41] Speaker 07:
No, it doesn't tell anybody anything.

[00:08:43] Speaker 07:
So we can get to that under the APA.

[00:08:45] Speaker 07:
But in addition to, I mean, we could talk about it, but just on the negotiated rates.

[00:08:50] Speaker 07:
But each of this, it really tells no one anything.

[00:08:53] Speaker 07:
But the one thing we know is it doesn't tell consumers.

[00:08:56] Speaker 07:
This is supposed to be just directed at what hospitals can disclose.

[00:08:59] Speaker 07:
The rate has to, again, be knowable.

[00:09:02] Speaker 07:
And many rates are unknowable.

[00:09:04] Speaker 07:
So already you have a incomplete database and the government's rule just doesn't address it.

[00:09:09] Speaker 07:
It doesn't speak to it.

[00:09:10] Speaker 07:
You have no clue what the government thinks about it unless you hear a post-hoc representation for the first time in the response rate because the rule doesn't address this.

[00:09:18] Speaker 07:
The rule also is completely silent to all rates that aren't itemized.

[00:09:23] Speaker 07:
So many rates appear only as a package or a bundle.

[00:09:27] Speaker 07:
Again, the rule is completely silent.

[00:09:30] Speaker 07:
The agency was inundated with comment after comment saying this is how rates work.

[00:09:35] Speaker 07:
Negotiated rates don't come in these unique, I mean itemized way that the government envisioned in the rule.

[00:09:43] Speaker 07:
Rule doesn't speak to it in the final rule.

[00:09:45] Speaker 07:
The government's brief is completely silent on the first problem, although it addresses the second problem in a way that creates more questions than it answers.

[00:09:54] Speaker 04:
And I can- I wanna finish, I'm sorry.

[00:09:58] Speaker 07:
Sure, I mean, this is devastating to their whole entire justification, is whatever they say is, aren't we doing something?

[00:10:04] Speaker 07:
Well, how would you know?

[00:10:05] Speaker 07:
Because the agency has never told you how this rule is even workable or could provide any consumer any information if the database is both incomplete and misleading.

[00:10:15] Speaker 07:
Now, in the government's brief for the first time, it says, hey, hospitals, if you have itemized or bundled services like a hip replacement, just put NA.

[00:10:26] Speaker 07:
for not applicable in the database.

[00:10:28] Speaker 07:
So the hospitals heard that for the first time.

[00:10:30] Speaker 07:
They still don't have any way of knowing what to do about rates that turn on patient care.

[00:10:34] Speaker 07:
So they have no clue.

[00:10:36] Speaker 07:
But they say put NA.

[00:10:37] Speaker 07:
So there are two problems with that.

[00:10:40] Speaker 07:
First, that is very misleading because it indicates to consumers that the item is not covered on the insurance plan, which turns the purpose of the rule upside down.

[00:10:50] Speaker 07:
And second,

[00:10:51] Speaker 07:
The agency still has to grapple with the problem.

[00:10:53] Speaker 07:
You can't make this up in your opinion, and the government can't get up here in the first time and try to explain how the rules workable when hospitals have never been told and have never had the opportunity to comment.

[00:11:02] Speaker 07:
Actually, they commented, and then the agency just ignored the comments.

[00:11:06] Speaker 07:
If I could also talk about the fundamental argument about what you were saying, Judge Stadel, that they could at least know something because they could look at, for high deductible plans, they could at least determine, assuming

[00:11:17] Speaker 07:
incorrectly that you would know something about negotiated rates, they could at least look at what's called the discounted cash price.

[00:11:24] Speaker 07:
So our argument under both the First Amendment and the APA, and this is a very, very serious problem for the government.

[00:11:30] Speaker 07:
The rule recognizes it requires a discounted cash price.

[00:11:34] Speaker 07:
That's one of the five definitions of standard charges.

[00:11:38] Speaker 07:
The rule recognizes that many hospitals just don't have a standardized cash discount.

[00:11:43] Speaker 07:
They rather have individual discounts based on sliding scale,

[00:11:47] Speaker 07:
for financial need and individual charity care and bill forgiveness.

[00:11:51] Speaker 07:
Now what this rule does is it tells hospitals to falsely, falsely report that their discounted cash price is the undiscounted gross price for the service.

[00:12:05] Speaker 07:
Now that perniciously says to uninsured patients that the only way they can get health care is to pay a gross price with the government is going to get up here and tell you and what Judge fatal you just indicated is some inflated price that no one pays.

[00:12:18] Speaker 07:
So that is just pernicious and it's perverse.

[00:12:21] Speaker 07:
Now the government's HHS doesn't dispute this in the rule.

[00:12:26] Speaker 07:
And you know why?

[00:12:27] Speaker 07:
Because they don't address it.

[00:12:28] Speaker 07:
They're just silent as to this serious problem, even being told by hospital

[00:12:33] Speaker 07:
that it would deter patients from seeking care.

[00:12:36] Speaker 07:
Now the government's brief tries to rehabilitate the rule by citing to a different statement.

[00:12:42] Speaker 07:
I think it's page 547 of the rule that is addressing a different problem of misrepresentation as to confusing patients with just the document data about the negotiated rates.

[00:12:52] Speaker 07:
And that part of the rule on 547 says, hey, nothing stops the hospitals from issuing corrective statements through patient counseling.

[00:13:01] Speaker 07:
Well, the problem with that is that they block you from putting a corrective statement in the only place that would make sense where you're making the misleading statement.

[00:13:10] Speaker 07:
So when you have to post gross price for your discounted cash price, when you in fact have discounts, it's in a spreadsheet.

[00:13:17] Speaker 07:
So it's machine readable and you can't put any disclaimers or long text explanations.

[00:13:22] Speaker 07:
So you have this very misleading statement saying discounted price equals inflated gross price.

[00:13:28] Speaker 07:
That's wrong.

[00:13:29] Speaker 07:
And then you have the problem of all the negotiated rates being either proliferated with NAs or just no one knows, still knows what to do.

[00:13:37] Speaker 01:
And- Can I ask a question?

[00:13:38] Speaker 01:
Oh, sure.

[00:13:38] Speaker 01:
Yeah.

[00:13:40] Speaker 01:
Good.

[00:13:40] Speaker 01:
So I really want to go back again to this statutory text and to the charge masters.

[00:13:47] Speaker 01:
Now, when it says each hospital shall make public a list of the hospital standard charges, are those

[00:13:56] Speaker 01:
Previously, those were the charge master charges, right?

[00:14:00] Speaker 07:
So just, let me just clear up a little bit.

[00:14:02] Speaker 01:
So they are, um, they're the gross charges and charge master is when you say gross, they may, they were, you were required to list a charge master list.

[00:14:10] Speaker 01:
Is that right?

[00:14:11] Speaker 07:
Yeah.

[00:14:12] Speaker 07:
So the gross prices are what the charge masters contain.

[00:14:15] Speaker 07:
So those are list prices, maximum.

[00:14:19] Speaker 01:
I got it.

[00:14:20] Speaker 01:
And those are in your view, standard charges.

[00:14:23] Speaker 01:
Is that right?

[00:14:25] Speaker 07:
Yes, which was what the Obama administration said.

[00:14:28] Speaker 01:
I don't need a modification of this.

[00:14:30] Speaker 01:
All I need is your client believes those are standard charges.

[00:14:35] Speaker 01:
Is that right?

[00:14:36] Speaker 07:
Yes.

[00:14:37] Speaker 01:
Okay.

[00:14:37] Speaker 01:
Now the decision below in the district court says the charge master rates are highly inflated, often bear little resemblance to the actual payment tendered to a hospital by a patient or a third party provider.

[00:14:51] Speaker 01:
One study's found on average insurers and patients paid hospitals only about 38% of the amounts on charge masters.

[00:14:58] Speaker 01:
Is that true?

[00:14:59] Speaker 01:
Those facts.

[00:15:00] Speaker 07:
Yeah, we don't dispute that, but here's what we do dispute.

[00:15:03] Speaker 07:
Yeah, we don't dispute it.

[00:15:05] Speaker 01:
I don't want you to pivot.

[00:15:06] Speaker 01:
I don't want you to move to a different argument.

[00:15:08] Speaker 01:
Let me just pursue this argument first.

[00:15:10] Speaker 01:
OK.

[00:15:10] Speaker 01:
And then I'm sure Judge Taylor will let you make whatever other arguments you want to make.

[00:15:15] Speaker 01:
So why wasn't that a violation of the First Amendment, a violation of the

[00:15:20] Speaker 01:
statute, if these are not charges that many people at all pay at all, and if in fact they contain false information, why do you think those are the appropriate kinds of charges under the statute?

[00:15:37] Speaker 07:
So they're not, first of all, they're not false because for time immemorial, and this is in the rule, that gross charges are the asking price that apply to all payers.

[00:15:49] Speaker 07:
So they anchor all negotiations and they are the maximum, this gets to your First Amendment point, they are the maximum allowable cost

[00:15:56] Speaker 07:
than any patient so if you've got a bullet wound or bad car accident that gross charge is the price a maximum charge is would be regarded as a standard charge the the maximum it gets to your first amendment point the standard is what it gets to the universality of it so no we're not defining standard as maximum

[00:16:20] Speaker 07:
I thought you were asking why the gross project.

[00:16:23] Speaker 01:
I'm asking both questions.

[00:16:24] Speaker 01:
I wanna know why the gross charges are standard under the statute.

[00:16:29] Speaker 01:
Okay.

[00:16:29] Speaker 01:
And why they are not in violation of the first amendment on your argument that they are misleading.

[00:16:36] Speaker 07:
So yeah, let's take just the statutory argument.

[00:16:39] Speaker 07:
Our definition of standard is model, default, universality and representative.

[00:16:47] Speaker 07:
only representative charge, the only universal charge, is the charge master charge.

[00:16:52] Speaker 07:
Not only because it's the maximum, because it anchors all insurance negotiations.

[00:16:57] Speaker 07:
So it shows you that if nothing happens, in the absence of anyone uttering anything, the hospital's asking for the list price.

[00:17:05] Speaker 07:
So it is like your standard rack rates or the MSRP or a hotel room rate, it's the published advertised charge.

[00:17:13] Speaker 07:
So I think that that's why, and if I could just explain, I think it gives, this is why I do think it's important as a common sense matter that the 2014- Ms.

[00:17:22] Speaker 05:
Platt, the government's response to that is that's not the way the hospital business operates.

[00:17:30] Speaker 05:
I agree.

[00:17:31] Speaker 05:
There isn't one price.

[00:17:33] Speaker 05:
It's completely different and to use,

[00:17:35] Speaker 05:
menus or hotel rates as a model is to miss entirely the way this industry operates.

[00:17:43] Speaker 07:
Yes.

[00:17:43] Speaker 07:
And I'm going to get to this point again by the whole 10-year history of interpretation.

[00:17:50] Speaker 07:
What the government has said throughout the 2014 rulemaking and the 2018 rulemaking and this rulemaking is here's why a disclosure regime that requires gross charge disclosure is so great.

[00:18:02] Speaker 07:
So what the government tells you in the rule, I think it's at 540, is that disclosures of gross rates promotes price competition and brings down the cost of patient healthcare.

[00:18:13] Speaker 07:
And here's why.

[00:18:14] Speaker 07:
Because it tells the uninsured patient its maximum allowable price.

[00:18:19] Speaker 07:
And it allows insured patients to comparison shop because the starting price is at least somewhat proportional to the ending price.

[00:18:27] Speaker 07:
So you can look at two different hospitals and see that one has a really high

[00:18:31] Speaker 07:
Gross charge starting asking price and the other one isn't but whatever you think of the word standard The government has no definition of standard charge that doesn't include any price any charge is a standard charge in their view because standard means specific and charge is not limited to

[00:18:50] Speaker 07:
the government's asking price.

[00:18:51] Speaker 07:
So there is no such thing and you can say it's a unique market, but you still have to define standard and charge and it can't mean everything, particularly when the numbers were unknowable.

[00:19:02] Speaker 07:
Now, if I could just get back to the first amendment and just why isn't this misleading?

[00:19:07] Speaker 07:
Again, I think that there is some common sense element to the fact that two administrations thought that this meant the charge masters and that's what hospitals were doing.

[00:19:19] Speaker 07:
shortly after the passage of the Affordable Care Act.

[00:19:21] Speaker 07:
And the agency went through two rulemakings.

[00:19:23] Speaker 07:
And when the agency went through its second rulemaking in 2018, it never said, hey, we're proposing negotiated rates.

[00:19:30] Speaker 07:
It said, maybe standard, would everybody like to comment whether standard could mean average or median?

[00:19:37] Speaker 07:
So this wasn't even raised as a possibility either in the 2014 or the 2018.

[00:19:41] Speaker 07:
Now, why it doesn't violate the First Amendment, which is a wonderful question.

[00:19:45] Speaker 07:
So I do think that it passes, I think, any level of scrutiny that when you have a buyer-seller reaction, the government is allowed to prevent the following scenario.

[00:19:56] Speaker 07:
You can buy my house, but I'm not gonna tell you the price.

[00:19:59] Speaker 07:
And then you say, okay, and then you list the price.

[00:20:01] Speaker 07:
So it's always okay for the government to compel you as part of offering a service in a transaction that if you accept, here's the maximum price you will pay.

[00:20:12] Speaker 07:
And so I just think that's been a given in First Amendment.

[00:20:15] Speaker 01:
I'm not clear.

[00:20:16] Speaker 01:
What do you mean if you accept?

[00:20:18] Speaker 01:
I understood that you had to list the charge master charges, isn't that right?

[00:20:22] Speaker 01:
Not just tell a patient after the patient is accepted, they had to list them, right?

[00:20:30] Speaker 07:
Right.

[00:20:30] Speaker 07:
So what I'm saying is that list, just like any list of any pricing, communicates that if nothing else happens, in absence of any other circumstance, that's the price it will be charged.

[00:20:41] Speaker 01:
Is that what it says, those qualifications that you just gave?

[00:20:45] Speaker 01:
Are all of those qualifications on the list or is it just a charge master list?

[00:20:51] Speaker 07:
So a charge master list is not something that had been published before.

[00:20:56] Speaker 07:
So this was a big deal when the government in 2014 said, you got to do this.

[00:21:01] Speaker 07:
So it did not come out until 2014.

[00:21:04] Speaker 07:
And these charge master rates were known to insurance companies.

[00:21:09] Speaker 07:
But this was why the government, including today, wanted to get this information out there, because it would at least communicate

[00:21:17] Speaker 07:
to patients with their maximum allowable charges.

[00:21:20] Speaker 01:
But the caveats, the explanations, which you said don't.

[00:21:25] Speaker 07:
Oh, about the discounted?

[00:21:27] Speaker 01:
No, no, no.

[00:21:30] Speaker 01:
In order to not be misleading, that is, in order for the patients to not think they're actually going to have to pay the charge master rate, there has to be some explanation with it that says, this is the gross charge.

[00:21:45] Speaker 01:
Otherwise, it's going to be misleading, right?

[00:21:48] Speaker 01:
This is a gross charge which may be reduced under certain circumstances or whatever, right?

[00:21:54] Speaker 07:
And I think that's a problem that the government should have addressed.

[00:21:56] Speaker 01:
Now, I think- No, just hold on a second.

[00:21:58] Speaker 01:
So, with respect to the charge master list, which you think is okay, is there a bunch of caveats that explain to the patient what it means?

[00:22:12] Speaker 07:
No.

[00:22:13] Speaker 07:
But remember, this statute is not directed at patients.

[00:22:16] Speaker 07:
This is a list.

[00:22:19] Speaker 01:
That's what I thought you were going to say.

[00:22:20] Speaker 01:
And therefore, I want to know why you think that.

[00:22:22] Speaker 01:
So it says, it shall make public a list.

[00:22:27] Speaker 01:
What's the point of make public a list if the list is only going to insurance companies?

[00:22:33] Speaker 07:
So I think what, and this was, I think, a point we were trying to make in the 28-J letter.

[00:22:37] Speaker 07:
The government acknowledges that customers aren't going to read this list.

[00:22:41] Speaker 07:
that it's only being done as a computer spreadsheet database in the hopes that some hypothetical third party vendor

[00:22:48] Speaker 07:
may surface that will then turn this into apps.

[00:22:51] Speaker 07:
So this entire list that we're talking about with the discounted cash price and all the negotiated rates by plan, by location, by inpatient, outpatient is all in a machine readable spreadsheet.

[00:23:03] Speaker 01:
No, I understand that too.

[00:23:05] Speaker 01:
I'm still, I hate to say this, I'm stuck on the statute, okay?

[00:23:08] Speaker 01:
So, you know, I'm a bit real textualist here.

[00:23:10] Speaker 01:
I'm trying to read the statute.

[00:23:12] Speaker 01:
What makes you think

[00:23:14] Speaker 01:
that the purpose of the statute was not to communicate information to consumers?

[00:23:19] Speaker 01:
I mean, I would have thought when I saw this, that this is an effort at transparency with patience.

[00:23:26] Speaker 01:
Maybe not a good effort, maybe not a perfect effort, maybe not even a constitutional effort, but I'm first looking at what the statutory point here is.

[00:23:35] Speaker 01:
What is the reason for this section?

[00:23:39] Speaker 01:
If I look only at the text and it says public, I think that means to tell the public.

[00:23:44] Speaker 07:
and what the government said, and we don't disagree with.

[00:23:47] Speaker 01:
What do you think is the answer to this question?

[00:23:50] Speaker 07:
Oh, I think absolutely I agree with the government, is that it allows me to comparison shop.

[00:23:55] Speaker 07:
If I see $10 billion for colonoscopy, and I see $1 million for colonoscopy, I'm going to go to the $1 million.

[00:24:03] Speaker 01:
OK, so it is information to the consumer.

[00:24:06] Speaker 01:
I thought you, the reason I broke in was you were telling me that it's not information for the consumer.

[00:24:13] Speaker 01:
the statute is intended for the consumer.

[00:24:15] Speaker 01:
Is that right?

[00:24:16] Speaker 07:
So the statute is intended for the public, which would include the consumers.

[00:24:20] Speaker 07:
Let me be very clear on this.

[00:24:22] Speaker 07:
The hospitals, what I'm saying with the statute is completely directed at is only information the hospitals themselves can disclose, which the hospitals can't disclose out of pocket costs.

[00:24:35] Speaker 07:
That is a very minor point.

[00:24:37] Speaker 07:
So it gets at the point that no one actually pays.

[00:24:39] Speaker 07:
And our point is that the statute can't be directed at what people pay because the hospitals will never know that.

[00:24:45] Speaker 07:
They don't even know what insurance companies will actually pay, which the government concedes because the actual payment at the end of the day is gonna turn on variables about patient care.

[00:24:56] Speaker 07:
So in terms of a First Amendment analysis, it is perfectly appropriate for me to stand up here and read to you what the government has said across two administrations, which is a good purpose for the disclosure of the charge master.

[00:25:08] Speaker 07:
that it serves a public purpose.

[00:25:10] Speaker 07:
And I'm not only personally agree with it, the hospitals agree with it, but it's a fair point as a First Amendment matter and as a textual matter that no one has disputed that gross charges absolutely means, excuse me, standard charges absolutely includes gross charges.

[00:25:27] Speaker 07:
And that's also in the final rule.

[00:25:29] Speaker 01:
So- Okay, I got it.

[00:25:31] Speaker 07:
I got it.

[00:25:31] Speaker 01:
Okay.

[00:25:31] Speaker 07:
I appreciate it.

[00:25:33] Speaker 05:
The one thing though that- Sure.

[00:25:35] Speaker 05:
Ms.

[00:25:36] Speaker 05:
Vaughn, I just have

[00:25:37] Speaker 05:
Well, did you have one more thing to say in response to Judge Garland before I ask you an unrelated question?

[00:25:43] Speaker 07:
Let's go with unrelated, but I do think though that the, I do think that this just segues into the two list problem, but let's go with where you are.

[00:25:51] Speaker 05:
Well, no, why don't we talk about the two lists since you want to talk about that.

[00:25:54] Speaker 05:
And I just have a factual question for you, just a fact question, which is, so is the, there's two lists, right?

[00:26:04] Speaker 05:
There's this shoppable services list.

[00:26:06] Speaker 05:
And the comprehensive machine readable list.

[00:26:09] Speaker 05:
Right.

[00:26:09] Speaker 05:
Those are the two lists and you say the statute says a list can't be true.

[00:26:14] Speaker 05:
Is this is just a fact question is Is, is, is there anything on the shoppable services list that isn't on the comprehensive machine readable list.

[00:26:28] Speaker 05:
In other words, is a shoppable list just a subset of a comprehensive machine readable list.

[00:26:34] Speaker 07:
So,

[00:26:35] Speaker 07:
It is a subset in the sense that I'm gonna answer in the same sentence that a sentence is a subset of the alphabet and a recipe is a subset of a grocery list.

[00:26:47] Speaker 05:
So you have- Well, how about, is it a subset in the same way that an airline's rates for that coach is a subset for an airline offering service from Washington to San Francisco?

[00:27:04] Speaker 05:
is they have three or four different rates.

[00:27:09] Speaker 05:
Coach is a subset of those rates, correct?

[00:27:14] Speaker 07:
Is that the same as this?

[00:27:15] Speaker 07:
Yes, but if I could just answer the question, this list would say this is a customized thing that the travel agency does.

[00:27:21] Speaker 07:
It throws in your hotels, your cars, and maybe some Disney worlds and trips to look at at SeaWorld.

[00:27:28] Speaker 05:
What's the list you're referring to?

[00:27:31] Speaker 07:
The machine-readable spreadsheet is a raw data dump.

[00:27:34] Speaker 07:
It's just a raw data dump in Excel.

[00:27:37] Speaker 07:
It's very critical to understand that it's not just you take 300 items and move them over.

[00:27:42] Speaker 07:
You have to use judgment.

[00:27:45] Speaker 07:
And it would, the,

[00:27:49] Speaker 07:
Different, let me just go to get this out.

[00:27:51] Speaker 07:
It's different formats with different information to different audiences for different purposes.

[00:27:55] Speaker 07:
The different information, which is I think your question goes to, is that vaginal delivery or a sleep study or some very complicated things with or without co-morbidity may not be the way it's described on the shoppable service list.

[00:28:12] Speaker 07:
doesn't necessarily transform into a straight raw data.

[00:28:16] Speaker 07:
Now it might because a straightforward thing like psychotherapy may have, you know, a

[00:28:22] Speaker 07:
a machine readable counterpart.

[00:28:24] Speaker 07:
But the critical part is once you get to the shoppable service list, which is this consumer friendly and every hospital on its own minus the 70 gets to pick any shoppable services that you would dream up ahead of time that you might schedule in advance.

[00:28:40] Speaker 07:
So it's like, oh, well, let me think about how I might need hospital care.

[00:28:44] Speaker 07:
And that's not the way the items and services in the DRG list works.

[00:28:48] Speaker 07:
So in that sense, I think a sentence

[00:28:50] Speaker 07:
making a word out of the alphabet or using a recipe because you have the ingredients on your grocery list, but somebody with some intelligence has to figure out how to put all those ingredients together.

[00:29:01] Speaker 07:
And there's no limit on how you describe your shoppable service.

[00:29:06] Speaker 07:
You can describe, I think the government had like, I don't know, 17 references to ancillary services with stuff I'd never heard of.

[00:29:12] Speaker 07:
And it said mix and match, it's not exhaustive, just do what you think might be helpful for consumers.

[00:29:17] Speaker 07:
And so I think in the government's view that that's just two lists.

[00:29:21] Speaker 07:
It has to be, because there's really no other meaning for two lists.

[00:29:25] Speaker 07:
Now, so that's, I think that's my best, you know, answer for you on, is the information a subset?

[00:29:33] Speaker 05:
I have a question about your, I guess it's both your APA and your First Amendment.

[00:29:37] Speaker 05:
On page 43 of your brief, you say that the agency failed to grapple with the reliance interests engendered by its previous rules.

[00:29:48] Speaker 05:
What are those reliance interests?

[00:29:50] Speaker 07:
Yeah, and I hope to make this as part of an Encino argument.

[00:29:53] Speaker 07:
But the reliance interest, I think, is a, in terms of, yeah, just let me put it in the box of First Amendment, because it's a better APA argument than the First Amendment.

[00:30:03] Speaker 07:
The First Amendment is grounded in much better arguments than the reliance interest.

[00:30:07] Speaker 07:
So on the reliance interest as an APA matter, it is that from the get-go, hospitals thought, I mean, actually, the hospitals were just getting together their charge masters.

[00:30:18] Speaker 07:
And in terms of that everyone agrees, the hospitals are wholeheartedly behind transparency, that they invested on a lot of time, money, and expense in two ways of getting this information to consumers.

[00:30:30] Speaker 07:
One is the price calculator tool.

[00:30:32] Speaker 07:
That's the alternative way of complying with the shoppable service list.

[00:30:36] Speaker 07:
So that helps.

[00:30:37] Speaker 07:
It's much more directly related to the problem.

[00:30:39] Speaker 07:
They sit down with you and you input your data

[00:30:42] Speaker 07:
And it tries to give you, based on your plan, the information.

[00:30:45] Speaker 07:
And the second, which I think you might have had, is that one-on-one counseling sessions where they sit down with you and say, what's your insurance?

[00:30:52] Speaker 07:
Here's how it's going to work.

[00:30:53] Speaker 07:
What's your deductible?

[00:30:54] Speaker 07:
And they try to figure it out.

[00:30:55] Speaker 07:
And that is an investment.

[00:30:57] Speaker 07:
So this is a new regime.

[00:31:00] Speaker 07:
And this is where the government really messed up.

[00:31:04] Speaker 07:
The government's rule prolifically says this is just no big work.

[00:31:09] Speaker 07:
This information is readily available on your rate sheets and you're already doing it for states.

[00:31:14] Speaker 07:
So just put that information out there.

[00:31:15] Speaker 07:
You only need 30 days, maybe 60 days to do it.

[00:31:18] Speaker 07:
It only costs you a thousand bucks.

[00:31:20] Speaker 07:
Okay, that was preposterous.

[00:31:21] Speaker 07:
So what the government in its final rule raised that to 11,000 and the government will tell you they based it on a hospital's organization, which the rule cites.

[00:31:30] Speaker 07:
The rule cites that hospital organization's estimate.

[00:31:33] Speaker 07:
But then the rule prolifically doubles down on to justify the amount that this information was at your fingertips and you're already doing it under states.

[00:31:43] Speaker 07:
Now those are manifestly false and the government's never contested it.

[00:31:46] Speaker 07:
And here's why, no statute requires this kind of disclosure.

[00:31:50] Speaker 07:
They're all based on retrospective data information where you then know the rates and then you can sort of calculate it.

[00:31:57] Speaker 07:
And the second thing is hospital,

[00:32:01] Speaker 05:
Oh, I mean, all new regulations require, many new regulations require substantial additional investment by regulated parties.

[00:32:11] Speaker 05:
And here the government seems to have been aware of that.

[00:32:17] Speaker 05:
I mean, maybe not as much as you thought, but it did increase dramatically the amount that it thought complying would cost and it extended it for a year.

[00:32:27] Speaker 05:
And it excluded hospitals that already have a tool that works.

[00:32:34] Speaker 05:
So what did it do that it should have done?

[00:32:39] Speaker 07:
So there's a couple of misassumptions there.

[00:32:41] Speaker 07:
The machine-readable spreadsheet is an absolute requirement.

[00:32:45] Speaker 07:
Therein lies the Herculean burden of negotiated rates, which don't exist in many instances at all on a knowable number.

[00:32:55] Speaker 07:
Second, many of them exist not itemized.

[00:32:58] Speaker 07:
So there is no way to put any information in that spreadsheet.

[00:33:02] Speaker 07:
Third of all, and so that gets us working broadly, there's still a burden problem because even if there's a knowable rate, there's an actual itemized rate, hospitals don't have the information.

[00:33:11] Speaker 07:
They have to manually reverse engineer it with clinicians, legal staff, and pouring through contracts and trying to figure out how this would work for up to 6,000, 6,000 different permutations.

[00:33:24] Speaker 07:
So to say that they upped the number, but then I counted seven times that they mistakenly said, you're allowed to burden someone, but heaven help that the APA at least requires the agency to at least understand the burden.

[00:33:39] Speaker 07:
I thought that they had to at least explain it and acknowledge it, but they misacknowledged it seven times.

[00:33:45] Speaker 07:
They seven times said it.

[00:33:48] Speaker 05:
Unless you're way over your time.

[00:33:51] Speaker 05:
Concededly, we were the ones that took your way over it.

[00:33:54] Speaker 05:
But unless either of my colleagues have questions at this point.

[00:33:57] Speaker 00:
Judge Garland?

[00:33:58] Speaker 00:
Just one thing, Judge Taylor.

[00:34:01] Speaker 00:
I've been listening carefully.

[00:34:02] Speaker 00:
Ms.

[00:34:03] Speaker 00:
Blatt, as I'm hearing your argument, you seem to be saying something that would cause me to conclude that neither the charge master

[00:34:15] Speaker 00:
rate, which you prefer, nor the government's present scheme is transparent.

[00:34:22] Speaker 00:
They're equally bad in terms of what they communicate.

[00:34:26] Speaker 00:
So I can be very honest with you in saying I'm not buying your argument to the extent that you're making it, that the charge master rate is discernibly more transparent than what the government

[00:34:41] Speaker 00:
is proposing, and especially when you say it's nothing more than a maximum, because in my mind, that means the hospital can tack any rate on the charge master rate, because it's only a maximum.

[00:34:51] Speaker 00:
And we go down maybe, but you can say anything.

[00:34:54] Speaker 00:
I don't know how that serves the consumer.

[00:34:56] Speaker 00:
You're saying, well, the alternative approach doesn't either.

[00:35:00] Speaker 00:
But if I'm hearing you correctly, your principal objection has nothing to do with worrying about transparency.

[00:35:05] Speaker 00:
It's just that the government's approach is more burdensome on you and more expensive.

[00:35:10] Speaker 00:
No, neither one is transparent.

[00:35:13] Speaker 00:
Hospitals don't like lying to their patients and this rule requires- But you're lying to the patients as I listen to your argument in suggesting that the charge master rate is a rate.

[00:35:23] Speaker 00:
It's not.

[00:35:24] Speaker 00:
And there's nothing that says, as I understand it, you can tell me if I'm wrong, that alerts the consumer when they see that charge master rate

[00:35:34] Speaker 00:
that beware because any and everything below this is possible.

[00:35:40] Speaker 00:
We do not want to suggest to you that this is the rate.

[00:35:44] Speaker 00:
Is that what you do?

[00:35:45] Speaker 07:
So, yes, in the sense of the hospitals have done the two things I've talked about and states have done a lot in this respect at the initiatives of hospitals.

[00:35:55] Speaker 07:
And that is the price transparency tools that have been developed, hospital by hospital and state by state.

[00:36:00] Speaker 07:
But the answer to your question, if both regimes aren't so hot, is a vacature of the rule because the agency, it's not just- No, no, no.

[00:36:06] Speaker 00:
I understand.

[00:36:07] Speaker 00:
I'm just trying to understand what you're arguing because the charge master rate, as you prefer, it certainly doesn't sound like a transparent approach.

[00:36:16] Speaker 07:
So all I can say on that again, and it is perfectly reasonable to take the government at its word that it may not be a perfect regime, but that Congress rationally wanted this information out because the government concluded it would bring down patient care and cause price competition.

[00:36:31] Speaker 07:
Now, if you don't buy the government's rationale because in 2019, they thought that didn't go far enough, that's totally fair and that's totally rational.

[00:36:39] Speaker 07:
But the statute didn't allow them to go this far.

[00:36:41] Speaker 07:
And with the three problems I talked about under the APA is that the workability problem

[00:36:46] Speaker 07:
that it forces a misleading statement and then it compels corrective speech to correct the speech you didn't want to make in the first place.

[00:36:54] Speaker 07:
And then third is just the burden problem.

[00:36:56] Speaker 07:
But the big problem is the workability problem.

[00:36:58] Speaker 07:
Whatever answer we're going to hear when she gets up is going to be new to me.

[00:37:03] Speaker 07:
Okay.

[00:37:03] Speaker 07:
Thank you.

[00:37:03] Speaker 05:
Okay.

[00:37:03] Speaker 05:
Thank you.

[00:37:05] Speaker 05:
Thank you.

[00:37:05] Speaker 05:
We'll hear from the government and I'll give you a couple minutes for rebuttal.

[00:37:08] Speaker 05:
Okay.

[00:37:15] Speaker 03:
I apologize.

[00:37:16] Speaker 03:
Good morning, may it please the court.

[00:37:18] Speaker 03:
Courtney Dixon for the secretary.

[00:37:21] Speaker 03:
It's an unavoidable reality of the market for hospital care that hospitals have established different charges for the same items and services, which they will usually and customarily apply depending on the category of paying patient.

[00:37:35] Speaker 03:
The agency here looked at the realities of the market for hospital care.

[00:37:39] Speaker 03:
It looked at the statutory text, including the diagnosis related groups clause.

[00:37:43] Speaker 03:
And it looked at the problem Congress was seeking to solve in the statute, specifically bringing down the cost of healthcare coverage.

[00:37:51] Speaker 03:
And from all of that, Your Honor, the agency interpreted standard charges to require hospitals to disclose three types of standard charges.

[00:37:59] Speaker 03:
There are gross charges, which are the usual or customary price that might apply to self-pay patients.

[00:38:06] Speaker 03:
There are any standardized cash discount prices if the hospital has it, which is the price that the hospital would offer to any cash-paying patient, regardless of insurance status.

[00:38:17] Speaker 03:
and then their payer-specific negotiated rates, the rates that they've specifically contractually agreed with insurance companies to pay those insurance company's beneficiaries and similarly situated persons, anyone with that particular insurance provider and likely particular plan.

[00:38:34] Speaker 03:
I have Blue Cross Blue Shield, and I go to a hospital.

[00:38:38] Speaker 03:
The charges that will usually apply to me have been set in advance.

[00:38:41] Speaker 03:
They're contractually negotiated.

[00:38:43] Speaker 03:
And it's ignoring the realities of the market for hospital care, Your Honor, to say that in that circumstance, the hospital is going to demand its charge master price.

[00:38:51] Speaker 03:
It's going to demand, again, the price that it's negotiated with the insurer.

[00:38:54] Speaker 03:
And under the current status quo, it's not that these charges don't exist.

[00:39:00] Speaker 03:
They exist.

[00:39:01] Speaker 03:
They're driving insured patients out of pocket expenses.

[00:39:04] Speaker 03:
The patients don't learn of them prior to care.

[00:39:06] Speaker 03:
They learn of them when they receive an explanation of benefits forms, weeks or months after the fact.

[00:39:12] Speaker 03:
At that point, the explanation of benefits form will say, this is what the insurance company has negotiated and taken off.

[00:39:19] Speaker 03:
Their agency's rule, Your Honor, requires hospitals to disclose that information up front.

[00:39:24] Speaker 03:
And it concluded, based on the record before it, that consumers are going to benefit as a result, that they're going to be motivated to use this information.

[00:39:32] Speaker 03:
I mean, the evidence in the record shows, runners, that consumers currently are casting about for rate information and are so desperate for that information that they've taken it upon themselves to crowdsource the information that they find on their explanation of benefits forms, manually put them onto websites, and hopefully get some whimmer into these payer-specific negotiated rates that, again, under the rule, hospitals will have to disclose upfront.

[00:39:56] Speaker 05:
I'm happy to address any of the... For someone, let me make sure I understand it.

[00:40:04] Speaker 05:
So if I need to go to the hospital to get my appendix taken out, and say I have Blue Cross, the disclosure of the negotiated rates will help me compare hospitals in terms of what my out-of-pocket costs will be.

[00:40:21] Speaker 05:
Is that right?

[00:40:23] Speaker 03:
It depends, I think you're on particular insurance arrangements, so.

[00:40:25] Speaker 05:
Because do I care?

[00:40:28] Speaker 03:
Yeah.

[00:40:28] Speaker 03:
Right?

[00:40:29] Speaker 05:
Yes.

[00:40:30] Speaker 05:
If I have to have my appendix, I'll go see what, I'll look on this thing and I'll see, okay, my out-of-pocket expenses at Sibley Hospital are less than at Georgetown, so I'll go there.

[00:40:42] Speaker 05:
Is that how this works?

[00:40:45] Speaker 03:
I think yours may be example of an appendectomy.

[00:40:47] Speaker 03:
It might be perhaps the wrong example, given that an appendectomy we don't normally think of as something that's shoppable.

[00:40:53] Speaker 03:
That might require an immediate hospital visit.

[00:40:57] Speaker 05:
I see.

[00:40:57] Speaker 05:
Well, take, for example, give me an example of one that you mean like, say, a colonoscopy.

[00:41:05] Speaker 03:
Yes, sure.

[00:41:06] Speaker 03:
That's the example that our brief uses and that the agency refers to.

[00:41:09] Speaker 03:
Yes.

[00:41:09] Speaker 05:
Yeah, right.

[00:41:11] Speaker 05:
But that's what I'll be looking for, right?

[00:41:13] Speaker 05:
I'll be comparing what it cost me out of pocket at Georgetown versus Sibley, correct?

[00:41:17] Speaker 03:
Yes, Your Honor.

[00:41:18] Speaker 03:
And if you have Blue Cross Blue Shield, a particular plan under the agency's rule, you could look at hospital A, hospital B,

[00:41:25] Speaker 03:
look at the payer-specific negotiated rates for your provider and plan.

[00:41:28] Speaker 03:
And if you have a high deductible health plan, the payer-specific negotiated rate that listed if you haven't met your deductible may very well be your out-of-pocket expense because you'll likely bear the full financial responsibility without any cost sharing.

[00:41:42] Speaker 03:
If you have an insurance arrangement where you have a cost sharing arrangement with your insurer, say the insurer pays 80% and you pay 20%.

[00:41:49] Speaker 03:
If you look at the payer specific rates, you're going to have to do some math applying your insurance plan.

[00:41:54] Speaker 03:
So you might have to take 20% of the payer specific rates.

[00:41:57] Speaker 03:
It might not be

[00:41:58] Speaker 03:
know, a perfect estimate of out-of-pocket expenses, but under the rule you have a far better estimate of your out-of-pocket expenses than currently exists.

[00:42:05] Speaker 03:
And when, which if you tried to look up hospital A and hospital B, you're going to see charge master rates, which likely bear little to no resemblance to what you will actually pay.

[00:42:16] Speaker 03:
And of course, under the agency's rule, you could compare payer-specific negotiated rates with any potential standardized cash discount prices, and can determine whether it's cheaper to pay for your care directly in cash rather than go through your insurance at all.

[00:42:29] Speaker 03:
And plaintiffs have suggested, Your Honor, that if a hospital doesn't have a standardized cash discount rate, which under the agency's rule means that it applies across the board to any patient, regardless of insurance status, as I noted earlier, who's gonna pay for their cash,

[00:42:44] Speaker 03:
pay for their care in cash, if a hospital hasn't established such a standardized cash discount price, it would report its charge master price.

[00:42:51] Speaker 03:
And that's not misleading because, of course, if you say, I want to pay for my care in cash and there's no standardized cash discount price, the gross charge or the charge master charge is the price the hospital would presumably come back with.

[00:43:04] Speaker 03:
Now, the idea that that disclosure of that rate would mean that someone would think there isn't individualized cash discount rates.

[00:43:13] Speaker 03:
two responses.

[00:43:14] Speaker 03:
First, of course, under the disclosure of just charge master rates, there's no indication of cash prices at all.

[00:43:21] Speaker 03:
And so it's unclear how that is any less misleading to consumers than saying a standardized cash discount price.

[00:43:29] Speaker 03:
At a minimum, under the rule, you could see a standardized cash discount price and know that cash discounts are a thing.

[00:43:34] Speaker 03:
Again, under the current status quo, patients are in the dark about these things prior to care.

[00:43:39] Speaker 03:
I'll also note, and the agency has remarked throughout its rulemaking, that nothing in its rule prevents hospitals from providing additional information to consumers.

[00:43:50] Speaker 03:
The agency has lauded such efforts on behalf of hospitals.

[00:43:53] Speaker 03:
Hospitals are free to remark on their websites, to remark in patient interactions, to say, you know, we don't have a standardized cash discount, but we offer individualized cash discounts in certain circumstances, or we offer sliding scale cash discounts.

[00:44:05] Speaker 03:
nothing prevents hospitals from doing that.

[00:44:07] Speaker 03:
And again, at a minimum under the rule, consumers might know to ask those questions and they don't currently know that under the current regime.

[00:44:16] Speaker 03:
So again, based on the record before the agency, the agency reasonably concluded that this rule was going to meaningfully benefit consumers.

[00:44:24] Speaker 03:
The agency acknowledged that there are a lot of potential barriers that currently exist to allowing patients to perfectly shop for care in all circumstances.

[00:44:32] Speaker 03:
Some of those are inherent in hospital care itself.

[00:44:36] Speaker 03:
Your honor mentioned appendectomies.

[00:44:38] Speaker 03:
Shopping for appendectomies might not ultimately be a thing.

[00:44:41] Speaker 03:
hospital charges are also inherently complex and some consumers might not be able to perfectly estimate their out-of-pocket expenses in all circumstances.

[00:44:49] Speaker 03:
The agency acknowledged this but it nonetheless reasonably concluded that its rule was a necessary first step to start the bridge to start to bridge the significant gap that exists between consumers

[00:45:01] Speaker 03:
and hospital costs, Your Honor, in which, again, the record was very clear that consumers overwhelmingly desired the type of information that the rule requires hospitals to disclose, and that currently consumers are incredibly frustrated.

[00:45:14] Speaker 03:
I mean, the hospitals have noted, of course, sorry, Judge Shadalick.

[00:45:19] Speaker 05:
No, you finish your sentence, and then I'll ask you a question.

[00:45:21] Speaker 03:
I was only going to remark briefly that the hospitals have noted their current efforts at one-on-one counseling or offering other services.

[00:45:29] Speaker 03:
Again, the agency lauded such voluntary efforts, but the evidence in the record before the agency was clear that consumers don't think that the current status quo is working for them.

[00:45:40] Speaker 03:
And of course, hospital charges are not going down, or at least certainly not as much as they could or should.

[00:45:46] Speaker 03:
And so the agency made accommodations to hospitals who are offering price transparency calculators already.

[00:45:53] Speaker 03:
They said you don't have to satisfy this shoppable services list, which is trying to serve the same goals.

[00:45:58] Speaker 03:
But it's certainly not an answer to say that, well, some hospitals are doing this voluntarily.

[00:46:02] Speaker 03:
Because again, the evidence before the agency was quite clear that consumers are very frustrated about the current status quo.

[00:46:10] Speaker 05:
And so what's your response to Ms.

[00:46:12] Speaker 05:
Blatt's argument about a list?

[00:46:16] Speaker 05:
She says the statute says A list, that means one list.

[00:46:20] Speaker 05:
This requires two lists.

[00:46:22] Speaker 05:
And she says in response to my question that it's just not true.

[00:46:25] Speaker 05:
It's just not accurate to say as you do in your brief that the shoppable list is just, I think you say in your brief, nearly another way of describing or portraying the

[00:46:37] Speaker 05:
data on the machine readable, comprehensive machine readable list.

[00:46:41] Speaker 05:
What's your answer to that?

[00:46:42] Speaker 03:
Right.

[00:46:42] Speaker 03:
So under the rule of hospitals who have to establish a list of their items and services, standard charges for items and services, that's reflected in the comprehensive machine readable file, which puts all of the charge information in one place.

[00:46:55] Speaker 03:
Again, it's comprehensive for all of the hospital's items and services.

[00:46:59] Speaker 03:
There's a separate display of charges for 300 shoppable services.

[00:47:04] Speaker 03:
The statute gives the secretary explicit discretion to specify how hospitals are to make public their list of standard charges.

[00:47:11] Speaker 03:
There was a question, Your Honor, about differences between the shoppable services list and the comprehensive machine readable file.

[00:47:18] Speaker 03:
All of the standards- Right.

[00:47:19] Speaker 05:
Is everything

[00:47:21] Speaker 05:
Pardon me, say that again, I'm sorry.

[00:47:23] Speaker 03:
I think I was gonna perhaps anticipate your next question.

[00:47:26] Speaker 03:
Go ahead.

[00:47:27] Speaker 03:
Rather, there's a difference, right.

[00:47:28] Speaker 03:
So all of the standard charge information that will appear in the shopable services list is derived from the comprehensive machine readable file.

[00:47:36] Speaker 03:
Differences are that in the shopable services list, there has to be a plain language description of the item or service.

[00:47:44] Speaker 03:
So in the comprehensive machine readable file, you can imagine

[00:47:47] Speaker 03:
a more complicated hospital jargon versus in the shoppable services list, it's intended to be more consumer interfacing.

[00:47:54] Speaker 03:
There's also some differences in how the information has to be organized and presented because it needs to be organized by shoppable service and then including any ancillary services.

[00:48:04] Speaker 03:
So for example,

[00:48:05] Speaker 03:
To use the colonoscopy example, the hospital report a price for colonoscopy.

[00:48:10] Speaker 03:
And then maybe in providing colonoscopy, the hospital also charges a facility fee.

[00:48:15] Speaker 03:
So the agency or sorry, the hospital would list facility fee, along with colonoscopy.

[00:48:22] Speaker 03:
Maybe the facility fee charge is already included in the colonoscopy charge, so the hospital could note this is included.

[00:48:28] Speaker 03:
Maybe it's an additional fee in which they would provide the number of the fee or the amount of the fee.

[00:48:34] Speaker 03:
But the charge information there, Your Honor, is going to be the same information coming from the comprehensive list.

[00:48:40] Speaker 03:
It's just hospitals have to organize it in a more consumer-friendly way and again use plain language.

[00:48:46] Speaker 03:
All of which again is consistent with the secretary's explicit statutory discretion to specify how hospitals are to make their standard charges public.

[00:48:55] Speaker 03:
And yes, the agency gave hospitals fairly wide discretion in how they organize their shoppable services and how they list ancillary services.

[00:49:03] Speaker 03:
And that's because the agency recognized that hospitals have a variety of ways of, you know, offering their services, grouping them together.

[00:49:11] Speaker 03:
Not all hospitals are going to charge the same kind of fees along with the service as others.

[00:49:16] Speaker 03:
So there's going to be differences here.

[00:49:18] Speaker 03:
But even knowing that those differences, looking up hospital B A, looking up hospital B, seeing that there are different ancillary services for a single procedure, that's providing information to the consumer.

[00:49:29] Speaker 03:
Because again, all of this stuff is still driving consumers out of pocket costs.

[00:49:34] Speaker 03:
Consumers just don't learn about it prior to care.

[00:49:37] Speaker 03:
And the agency has decided in this rule that you know sunshine is the best medicine and that again as the record record evidence suggests consumers are going to be motivated to use it and they'll benefit as a result.

[00:49:51] Speaker 01:
Can I ask you about the burden argument that opposing counsel made, which I take to be arbitrary and capricious argument under the APA.

[00:50:00] Speaker 01:
So it seems like looking at their brief at Area 5253, it seems like their argument is

[00:50:09] Speaker 01:
Thousands of different negotiated rates and non-straightforward clients and that the hospitals calculate rate data by patient so they can't even readily identify the rates that you're asking about.

[00:50:25] Speaker 01:
And maybe a last argument that it's all based on algorithms which you know you'd have to reverse engineer in order that they would have to reverse engineer in order to determine.

[00:50:38] Speaker 01:
And so as a consequence, one, I'm trying to remember what the words that were used, there was two P's, pernicious and another P. And then the second, two adjectives describing it, and then the second one being that it costs way more than the government calculated.

[00:50:58] Speaker 03:
Right, so I guess there's a few things to unpack there and starting maybe with the cost argument.

[00:51:05] Speaker 03:
The hospital's estimate of 150 hours per hospital or approximately $11,000 to $12,000.

[00:51:11] Speaker 03:
150 hours was also the same burden estimate reached by plaintiffs on amicus the healthcare financial management.

[00:51:18] Speaker 01:
So dispute about whether that's every year or just the first year.

[00:51:22] Speaker 03:
The Health Care Financial Management Association says in their amicus brief that they meant that only for the first year, sorry, and they meant that to continue for subsequent years versus the agency concluded, I believe, that in the second year and onwards, it would be maybe $4,000, $3,000 lower.

[00:51:39] Speaker 03:
The agency's conclusion there is reasonable because, you know, a lot of the burden estimate that hospitals are talking about here is the burden of compiling this information in the first instance.

[00:51:48] Speaker 03:
It's reasonable to conclude that once they've done so and they've built the infrastructure, they've got the system on, they've got the list online, that the burden is only going to diminish in subsequent years.

[00:51:59] Speaker 03:
And again,

[00:52:00] Speaker 03:
The fact that the agency reached the same first-year burden estimate as the Healthcare Financial Management Association relies on the assertion that the agency was off here by orders of magnitude.

[00:52:10] Speaker 03:
And of course, the agency increased its burden estimate quite significantly from its proposed rule.

[00:52:16] Speaker 03:
The hospital's comments about burdens did not fall on deaf ears.

[00:52:21] Speaker 03:
Again, the agency delayed the effective date of its rule by a year.

[00:52:23] Speaker 03:
It increased its estimate, and it provided accommodations.

[00:52:27] Speaker 03:
If you've got a consumer-facing

[00:52:28] Speaker 03:
price estimator tool, you don't have to compile the separate 300 shoppable services list.

[00:52:34] Speaker 03:
The point of that display is to allow consumers to better engage with this pricing information in a consumer-facing manner.

[00:52:42] Speaker 03:
A price estimator tool is going to serve the same purposes.

[00:52:46] Speaker 03:
And so the agency recognized, hey, if you've invested your time and resources in that, it's getting at the same thing our rule is.

[00:52:52] Speaker 03:
You don't have to comply with this separate list.

[00:52:54] Speaker 03:
So yes, the hospital's burden estimates weren't falling on deaf ears.

[00:52:59] Speaker 03:
The agency accounted for them, and the agency came to a reasonable conclusion about that estimate.

[00:53:04] Speaker 03:
The agency, of course, parted ways with the hospital in the sense that the agency believes that the benefits of this rule outweigh those burdens, but

[00:53:13] Speaker 01:
The point of this rule, Your Honor, is to attempt to shift some of the frustration that consumers currently face in that- What about the second part of the argument that they really can't even do this, that they calculate things by patient, they can't identify the different rate groupings, that they ordinarily build algorithms, that cross-reference each other, and so they can't really translate this into the kind of formula that you want.

[00:53:39] Speaker 03:
I think maybe there's also some misunderstandings about what

[00:53:43] Speaker 03:
does need to be disclosed under the rule as we explained in our brief.

[00:53:47] Speaker 03:
If a hospital has negotiated with one insurer on a per x-ray basis, then a column in the item and services list would be per x-ray.

[00:53:57] Speaker 03:
And then you would note, I've negotiated with Anthem $500 per x-ray.

[00:54:02] Speaker 03:
If you haven't negotiated with other insurers per x-ray, you would put non-applicable in the other columns.

[00:54:07] Speaker 03:
That's in the rule that charges have to be reported as applicable.

[00:54:11] Speaker 03:
If you've instead negotiated with another insurer on a just a procedure basis for say the whole colonoscopy itself, then you would say I've negotiated with anthem $15,000 for a colonoscopy and you would say, and you wouldn't need to necessarily separately say

[00:54:30] Speaker 03:
Sorry, I'm trying to describe this in a clear manner in that it's not that the hospital needs to reverse engineer from that colonoscopy package.

[00:54:38] Speaker 03:
What a specific X ray might cost in that package.

[00:54:42] Speaker 03:
If it's negotiated per package, then you report the negotiated rate for the service package.

[00:54:48] Speaker 03:
If you haven't negotiated a specific per x-ray price with that insurer, you don't have to report it.

[00:54:52] Speaker 03:
And so it's hard to talk about this in the abstract.

[00:54:56] Speaker 03:
The agency has, of course, put out guidance recently that it has some examples and charts along the same lines as I'm describing.

[00:55:03] Speaker 03:
And I apologize if I'm, if any, looking this up.

[00:55:08] Speaker 03:
I just want to be clear that if a hospital hasn't negotiated a specific price for a specific item with a specific insurer, they don't have to try and reverse engineer what could a price be for that.

[00:55:17] Speaker 03:
They would say not applicable in that circumstance, and they would report the package as they have negotiated it with the insurer.

[00:55:26] Speaker 03:
And to the extent that hospitals might have to manually scour contracts or engage in other kinds of compiling efforts between how they do their billing systems,

[00:55:37] Speaker 03:
Again, a part of this rule is that that's a feature and not a bug, in that these rates exist, they're contractually negotiated, they drive patients' expenses, and they're reported after the fact in explanations of benefits forms.

[00:55:50] Speaker 03:
And so it's not that under the current status quo, it's not that not reporting these algorithms, they all go away.

[00:55:57] Speaker 03:
Consumers bear them.

[00:55:58] Speaker 03:
They're frustrated about them.

[00:56:00] Speaker 03:
Under the rule of hospitals have to sort through their billing requirements, spend $12,000 up to sort them out for a year, then again, that's a benefit of the rule.

[00:56:10] Speaker 03:
And the agency reasonably concluded that that benefit serves the statute's goals.

[00:56:13] Speaker 03:
It's going to benefit consumers.

[00:56:15] Speaker 03:
And it outraised the burden on hospitals, which again, is going to diminish over time after this has been done in the first instance.

[00:56:24] Speaker 05:
Judge Edwards, Judge Garland, any further questions?

[00:56:28] Speaker 01:
No.

[00:56:30] Speaker 05:
Okay, thank you.

[00:56:32] Speaker 05:
Ms.

[00:56:32] Speaker 05:
Splatt, you can have two minutes.

[00:56:42] Speaker 04:
Over.

[00:56:45] Speaker 01:
Other way.

[00:56:47] Speaker 07:
Erin, come on.

[00:56:48] Speaker 07:
Center me, please, and raise it.

[00:56:50] Speaker 07:
Okay, good.

[00:56:52] Speaker 07:
Can you center me a little so I'm not?

[00:56:57] Speaker 07:
Okay.

[00:56:57] Speaker 07:
Well, I can just lean down.

[00:56:58] Speaker 07:
Okay.

[00:57:00] Speaker 07:
I'll take off my shoes.

[00:57:02] Speaker 07:
No, we're good.

[00:57:03] Speaker 07:
I just took off my shoes.

[00:57:06] Speaker 07:
Okay.

[00:57:06] Speaker 07:
Thank you.

[00:57:07] Speaker 07:
I'm gonna go backwards because I'm gonna start where we left off.

[00:57:12] Speaker 07:
So there are two separate problems.

[00:57:15] Speaker 07:
The workability problem is separate from the burden problem.

[00:57:19] Speaker 07:
And I told you I would hear for the first time what her answer to the workability problem was.

[00:57:23] Speaker 07:
And I have to say, I didn't understand it.

[00:57:26] Speaker 07:
The workability problem is this.

[00:57:28] Speaker 07:
And the sites are in page 9 to 10 and opening brief page 24 and 26.

[00:57:35] Speaker 07:
And the hospital's brief are the avalanche of comment sites that dictate this.

[00:57:39] Speaker 07:
In total, you will look for the rule and the rule will be silent on two problems that have nothing to do with burden.

[00:57:46] Speaker 07:
They are incompatible, the rule you cannot comply with in the way the government thinks is possible to communicate any relevant information.

[00:57:55] Speaker 07:
On the algorithm, Judge Garland, that is not a burden problem.

[00:57:59] Speaker 07:
The rate exists, you just don't know it until the patient showed up for care.

[00:58:03] Speaker 07:
It could be on a volume discount if you come in for one x-ray.

[00:58:06] Speaker 01:
I understood that.

[00:58:07] Speaker 01:
That's why I asked it as two separate questions.

[00:58:09] Speaker 01:
One, how much the whole thing is going to cost, and two, whether it's doable at all.

[00:58:13] Speaker 07:
It's not doable at all.

[00:58:14] Speaker 01:
But I know.

[00:58:15] Speaker 01:
But she did answer both parts.

[00:58:16] Speaker 01:
Now, I take your point to be that she's answering something that you didn't hear before.

[00:58:23] Speaker 01:
But other than that.

[00:58:24] Speaker 07:
And that she still hasn't told.

[00:58:26] Speaker 07:
I still could not tell you how a hospital

[00:58:29] Speaker 07:
She just says hospitals don't report it, I think, even though an x-ray seems to be a problem.

[00:58:35] Speaker 07:
And it doesn't even matter what she says.

[00:58:38] Speaker 07:
The agency did not speak to this at all.

[00:58:41] Speaker 07:
The second thing the agency didn't speak to at all is the problem with the bundled rates.

[00:58:46] Speaker 07:
And again, those rates, those things are allowed.

[00:58:50] Speaker 07:
and they're knowable in advance, they just don't exist in the machine spreadable way.

[00:58:54] Speaker 07:
And she's just wrong.

[00:58:55] Speaker 07:
The rule requires a number.

[00:58:57] Speaker 07:
You don't get to put explanations.

[00:58:59] Speaker 07:
You don't get to put bundled.

[00:59:00] Speaker 07:
You put a number.

[00:59:01] Speaker 01:
And the guidance.

[00:59:02] Speaker 01:
Or you can put NA, right?

[00:59:03] Speaker 07:
Or you can put NA, which means to me that that is not a service offered.

[00:59:08] Speaker 07:
The burden.

[00:59:10] Speaker 01:
That's not, that may not mean that to you, but I understand.

[00:59:14] Speaker 01:
her point to be that means you don't have the number available, not that the service is an offer, not that you don't do x-rays, but that you don't have a negotiated charge or a cash charge or something like that for it.

[00:59:25] Speaker 07:
And that's fair if the agency wants to explain that, which they didn't.

[00:59:28] Speaker 07:
I don't think you get to make it up on your own.

[00:59:31] Speaker 01:
I understood that perfectly from the beginning.

[00:59:33] Speaker 01:
That's what the words not available normally means, that the answer is not available, not the service.

[00:59:38] Speaker 01:
You think somebody would think if you put NA next to x-ray, that means your hospital doesn't do x-rays?

[00:59:44] Speaker 07:
Yeah, remember, this isn't a two hundred and five hundred million or two hundred fifty million data entries.

[00:59:49] Speaker 01:
OK.

[00:59:49] Speaker 07:
But I mean, so on the the burden point, the burden is for rates that do exist.

[00:59:54] Speaker 07:
There's a number out there.

[00:59:55] Speaker 07:
The problem is you have to reverse engineer.

[00:59:58] Speaker 07:
This has nothing to do with the algorithms or the bundle.

[01:00:02] Speaker 07:
It's just to just to comply with the rule.

[01:00:04] Speaker 07:
You have to reverse it.

[01:00:06] Speaker 07:
And that because

[01:00:07] Speaker 05:
Okay, Ms.

[01:00:08] Speaker 05:
Black, give us an example.

[01:00:10] Speaker 05:
Just instead of talking generalities about reverse, just give us an example so we can understand it.

[01:00:15] Speaker 05:
What do you mean?

[01:00:15] Speaker 07:
Yeah, sure.

[01:00:16] Speaker 07:
So hospital billing works when the patient checks out, you call to adjudicate the claim, and so you enter all the data points, and that's the way the hospital billing system is set up.

[01:00:24] Speaker 07:
And the comments that I'm explaining go through this in excruciating detail.

[01:00:28] Speaker 07:
So they can plug in after the fact, Plan A, at inpatient, thus in location this produces this.

[01:00:36] Speaker 07:
But what the contract doesn't tell you is what that rate was to start with.

[01:00:42] Speaker 07:
And there's not a rate sheet, which the government kept saying in the rule.

[01:00:46] Speaker 07:
Just look at the rate sheets and the hospital said, I don't know what you're talking about.

[01:00:49] Speaker 07:
There aren't rate sheets.

[01:00:50] Speaker 07:
These are spelled out in contracts in text.

[01:00:52] Speaker 07:
and we would have to set up vendors, consult with legal staff, and start with clinicians.

[01:00:58] Speaker 07:
And that's what the comment said.

[01:01:01] Speaker 07:
And the agency, this is why the rule is so fatal.

[01:01:04] Speaker 07:
Instead of responding, the agency said two misassumptions.

[01:01:07] Speaker 07:
In addition to totally fair, we picked one of your amici.

[01:01:10] Speaker 07:
But seven times they misstated, this is no big deal.

[01:01:15] Speaker 01:
They end with- Can I ask, I'm sorry, let me just from my own experiences, because it's the only way I can understand this.

[01:01:22] Speaker 01:
If I go to the hospital, particularly if you go to the emergency room where your Blue Cross Blue Shield doesn't cover everything or maybe doesn't cover it all.

[01:01:29] Speaker 01:
At the end of the day, you get a list of charges from the hospital.

[01:01:34] Speaker 01:
You are charged X for your x-ray, you're charged Y for your visit, you're charged C for your lab test.

[01:01:46] Speaker 01:
And each particular kind of lab test, a different kind of charge.

[01:01:49] Speaker 01:
And the next column says how much your insurance company paid for it.

[01:01:53] Speaker 01:
Now, are you saying that the first column, the charge for the x-ray,

[01:01:58] Speaker 01:
Not how much the insurance covers for it, but the charge for the x-ray is not standard to people, say, even Blue Cross patients.

[01:02:09] Speaker 01:
It's different for every single one recalculated somehow.

[01:02:13] Speaker 07:
So no, there's a couple of points.

[01:02:16] Speaker 07:
the rate applicable under that plan, but to go figure out what that amount was, it's not in a rate sheet.

[01:02:22] Speaker 07:
So you have to figure it out.

[01:02:24] Speaker 01:
The workability problem is that... Somebody had to figure it out after the fact.

[01:02:28] Speaker 01:
Yes, and that's the way... And I'm asking you, did they figure it out after the fact because of something about me, so that if Judge Tatel went and got the exact same test under the exact same Blue Cross Blue Shield plan, he would get a different charge

[01:02:43] Speaker 07:
He might get a different charge because, I mean, well, like, there's so many, so this is why the comments do it.

[01:02:50] Speaker 01:
If severity, his severity is different, if his... Well, I'm asking about things like a lab test for X, I don't know, for coronavirus, for example.

[01:03:00] Speaker 01:
A lab test, just to take an example, which fortunately has not applied to me.

[01:03:05] Speaker 07:
Yeah, lab test is a good one.

[01:03:06] Speaker 01:
Okay, or a standard X-ray of your broken, of whether you have a broken leg or not.

[01:03:14] Speaker 01:
Judge Taylor and I would not get a different column saying charge, would it?

[01:03:19] Speaker 01:
I get a bill from the hospital.

[01:03:21] Speaker 01:
It says charge.

[01:03:23] Speaker 01:
On the left, it says x-ray.

[01:03:26] Speaker 01:
Next column, it says charge.

[01:03:28] Speaker 01:
Next column was how much the insurance company paid.

[01:03:31] Speaker 07:
same plan, same inpatient, outpatient, same location, you might.

[01:03:36] Speaker 07:
And here's why that doesn't solve any of the problems.

[01:03:38] Speaker 01:
The same location being the same hospital, which is what's at issue.

[01:03:40] Speaker 01:
Right.

[01:03:41] Speaker 07:
And I think this goes to Judge Edward's claim about what are we supposed to do about it.

[01:03:45] Speaker 01:
You're not making a claim.

[01:03:46] Speaker 01:
Let me just.

[01:03:47] Speaker 07:
Judge Edwards raises a good point about what do I do if I don't like what anyone says.

[01:03:52] Speaker 07:
What the statute would have allowed is what states are doing with this problem.

[01:03:56] Speaker 07:
It's not like this is some new mystery.

[01:03:58] Speaker 07:
What states have asked for, because it's not doable, what the government wants is after the fact adjudicated claims.

[01:04:04] Speaker 07:
Put that in a database.

[01:04:05] Speaker 01:
Why isn't this what I just described?

[01:04:07] Speaker 01:
Even for the small universe that I'm describing, why is that not doable?

[01:04:13] Speaker 01:
Why is it only after Judge Garland leaves the hospital that they know how much to put on Judge Garland's x-ray charge?

[01:04:22] Speaker 07:
For two reasons.

[01:04:24] Speaker 07:
The x-ray charge might be billed on a per diem or per item, or it might be billed on volume discount, and you don't know that in advance.

[01:04:33] Speaker 07:
So it's only when Judge Tatel, it just so happens that both of you have the same care.

[01:04:37] Speaker 07:
But in advance, I can't tell you what the x-ray price is, and the statute requires itemized, and it's an unknowable number.

[01:04:45] Speaker 05:
The second problem is- But you are saying- I still don't understand that, Ms.

[01:04:48] Speaker 05:
Fai, I don't understand what you just said.

[01:04:50] Speaker 05:
Sure.

[01:04:51] Speaker 05:
Why is the price of the x-ray unknowable?

[01:04:54] Speaker 07:
Okay.

[01:04:54] Speaker 07:
And this is again, it would have helped to add the agency addressed it.

[01:04:57] Speaker 07:
But what the hospital.

[01:04:58] Speaker 05:
You just explain it.

[01:04:59] Speaker 05:
Why don't you just explain to us.

[01:05:01] Speaker 07:
Okay.

[01:05:02] Speaker 05:
So why it's on.

[01:05:04] Speaker 07:
So the volume discount, I think, is the easiest.

[01:05:07] Speaker 07:
If Judge Garland, because he presented a different scenario, got two x-rays, it's one price.

[01:05:12] Speaker 07:
But Judge Tatel only needed one x-ray.

[01:05:14] Speaker 01:
Let's say we only want one x-ray.

[01:05:16] Speaker 07:
That's what I'm saying.

[01:05:17] Speaker 07:
If you both got the same care, you would know the amount after the fact, but you didn't know the amount before the fact, because no one treated you.

[01:05:28] Speaker 01:
Well, wait a minute.

[01:05:29] Speaker 01:
We would know.

[01:05:29] Speaker 01:
But no, it's just an x-ray.

[01:05:31] Speaker 07:
Because the- It's just an x-ray.

[01:05:34] Speaker 07:
Sure.

[01:05:34] Speaker 07:
The spreadsheet- It's just an x-ray.

[01:05:36] Speaker 07:
The spreadsheet requires you to put in a price for an x-ray.

[01:05:39] Speaker 07:
Well, I don't know it yet because if Judge Garland needs two x-rays, it's going to be $50 total.

[01:05:47] Speaker 05:
Well, if we each need one x-ray, just one.

[01:05:50] Speaker 05:
The price of an x-ray is $100.

[01:05:51] Speaker 05:
Should be the same price.

[01:05:52] Speaker 05:
If I have one, I'll get charged for $100.

[01:05:55] Speaker 05:
And if he has two, he'll get $200, right?

[01:05:57] Speaker 05:
or more likely $5,000.

[01:05:58] Speaker 07:
So I think the problem is that you guys have figured out maybe a way if the government wants to try to explain this in the final rule that what you're talking about is what the rule wanted but the rule doesn't is silent on this but the rule assumes that because we're not looking at after the fact patient care is irrelevant

[01:06:19] Speaker 07:
But what the hospital said is that their rate negotiation is not just a volume discount, but it might be billed if it's billed per diem or per item.

[01:06:29] Speaker 07:
What are you supposed to put?

[01:06:31] Speaker 07:
It's a legitimate question that the hospital hasn't answered.

[01:06:34] Speaker 07:
Now, they did answer the question in the government's brief about if there's just an N applicable.

[01:06:39] Speaker 07:
And Judge Garland, you and I can disagree on the misleading.

[01:06:41] Speaker 07:
But misleading aside, the government has to explain how this rule is workable, has to acknowledge the problem, and then say, OK, I hear you.

[01:06:48] Speaker 07:
But here's the answer.

[01:06:50] Speaker 01:
If you don't mind, since we're running low on time, I have another question.

[01:06:52] Speaker 01:
This is just, again, back on the text and the meaning of standards.

[01:06:56] Speaker 01:
And you were using the example of sticker prices on cars.

[01:07:00] Speaker 01:
If you had the same statute, but it was about

[01:07:03] Speaker 01:
standard car sale prices.

[01:07:06] Speaker 01:
If the government said you have to list your walk-in price, you have to list your preferred member price, namely like AAA or something gets a discount, and you have to list your corporate fleet price, or at least the corporate fleet price you pay to Ford.

[01:07:26] Speaker 01:
Would each of those be standard prices, or do you think there is no standard price in that circumstance?

[01:07:31] Speaker 01:
You can't have a subset of standard prices.

[01:07:33] Speaker 07:
You could have a standard price that is what the 2018, which I mentioned to Judge Edwards, the median or average, that you could have a standard.

[01:07:41] Speaker 01:
I'm not asking for the median or average.

[01:07:43] Speaker 01:
I'm asking, could you be required to list the price that you charge corporation, Ford,

[01:07:55] Speaker 01:
General Motors for their own fleets, I don't know, Hertz for its own fleet if it weren't bankrupt.

[01:08:01] Speaker 01:
The price that you charge, AAA members who in the old days had some kind of discount at a car sales place.

[01:08:11] Speaker 01:
Would those not be standard prices anymore?

[01:08:13] Speaker 07:
So two answers, no.

[01:08:16] Speaker 07:
But no, because the statute didn't say, if they had asked what is your standard price for this particular location and this particular subdivision, fine.

[01:08:26] Speaker 07:
You'd still have a problem with the government says it's not an asking price, it's the amount that everybody's settled on.

[01:08:31] Speaker 07:
So the government kind of went off a cliff because it's every price, any and all, and every individually negotiated.

[01:08:38] Speaker 01:
I'm just trying to give, just use my hypothetical.

[01:08:40] Speaker 07:
Under your hypo, I, yeah.

[01:08:42] Speaker 01:
I thought I answered it.

[01:08:43] Speaker 01:
It is a single location, just like it would be a single hospital.

[01:08:47] Speaker 01:
It is a single location.

[01:08:49] Speaker 01:
It's gone by or vulnerable, which I've never been to in my life, but just as an example.

[01:08:55] Speaker 01:
Right.

[01:08:56] Speaker 01:
And they were required to put on the sticker

[01:09:00] Speaker 01:
how much they charge, what is their price for this car to a AAA member?

[01:09:05] Speaker 01:
What is their price for this car to a corporate fleet?

[01:09:08] Speaker 07:
And what is- Yes, and I was trying to say, yes.

[01:09:11] Speaker 01:
And so if the statute poses the question your way, what is the standard- Not if it does it my way, if it does it exactly the way it is in this case.

[01:09:19] Speaker 07:
So this adds the word in with respect to any subpopulation.

[01:09:24] Speaker 01:
So you're saying that it's the subpop, because

[01:09:28] Speaker 01:
Are they using subpopulations that cannot be a standard charge under the statute?

[01:09:32] Speaker 01:
No matter even if it's easy, even if it's clear, all the rest of your arguments are just cherry on top.

[01:09:41] Speaker 01:
In fact, even if everything was perfect and it was easy and no burden, still wouldn't meet the statute.

[01:09:47] Speaker 07:
Yeah, so there's two layers to the argument.

[01:09:49] Speaker 07:
And what I hear you putting pressure on is if you thought there was enough ambiguity that you could add subcategories of patients.

[01:09:56] Speaker 07:
And that's one way of looking at it.

[01:09:58] Speaker 07:
And I'm saying they're doing every single identified.

[01:10:01] Speaker 07:
The other problem that I still think we have this argument is that if they're right, that everything specific is standard and charge is not limited to asking price.

[01:10:09] Speaker 01:
I'm not saying everything is specific.

[01:10:11] Speaker 01:
I'm saying I'm giving you three categories in a hypothetical in a car dealership.

[01:10:16] Speaker 01:
Would that fit as a car, instead of the word hospitals, a car dealer's standard charges?

[01:10:23] Speaker 07:
For cars, you have to do one price.

[01:10:26] Speaker 07:
If it says cars for the way your hypo was for the walk-in versus the, then you could have a standard asking price for each subset.

[01:10:35] Speaker 01:
And that would be okay under the statute or the statute would have to be amended to include the word subsets.

[01:10:40] Speaker 07:
Yes, but we were taking your hyphen.

[01:10:44] Speaker 07:
So yes, yes, yes, it is adding words that aren't in there.

[01:10:49] Speaker 01:
And therefore, it would not fit the statutory.

[01:10:51] Speaker 01:
It would be wrong under Chevron one or two or both.

[01:10:55] Speaker 07:
I think it's definitely wrong under two, because then you add in, they're asking for, or one, they're asking for every, and it's one thing to say, well, we'll do it by, you know, an insurance, an insured rate.

[01:11:07] Speaker 07:
But if you just, your hypo is for every walk-in rate, that's identified by a different person.

[01:11:13] Speaker 01:
No, no, no, no.

[01:11:16] Speaker 01:
My question is, you go to this place,

[01:11:20] Speaker 01:
And the rule says for each car it has to give the rate if you're asking as part of a corporate fleet, the rate if you're a AAA member, and the rate if you're unaffiliated.

[01:11:36] Speaker 01:
Now, is that not an appropriate set of standard charges?

[01:11:44] Speaker 07:
For a statute that said, what are your standard charges for cars?

[01:11:48] Speaker 07:
The answer is no.

[01:11:50] Speaker 07:
Now, I'm saying even if you don't like that answer, it's not what the government did, because the government is not the standard asking price for subsets.

[01:11:57] Speaker 07:
It's the actually agreed upon price.

[01:11:59] Speaker 01:
OK, I understand.

[01:12:00] Speaker 07:
So that's all I was trying to say.

[01:12:02] Speaker 07:
OK.

[01:12:06] Speaker 05:
All right.

[01:12:07] Speaker 05:
Anything else?

[01:12:09] Speaker 01:
No, thank you.

[01:12:10] Speaker 05:
Judge Edward?

[01:12:11] Speaker 05:
No.

[01:12:11] Speaker 05:
What?

[01:12:12] Speaker 01:
Thank you.

[01:12:13] Speaker 05:
Okay.

[01:12:15] Speaker 05:
Thank you.

[01:12:15] Speaker 05:
Ms.

[01:12:16] Speaker 05:
Dixon, thank you very much for your arguments.

[01:12:18] Speaker 05:
The case is submitted.