By Jonathan Stempel

(Reuters) – A federal appeals court on Tuesday upheld a White House-backed rule to require hospitals to disclose the prices they negotiate with insurers for an array of tests and procedures.

The 2-0 decision by the U.S. Court of Appeals for the District of Columbia Circuit is a victory for President Donald Trump’s effort to make health care pricing more transparent so patients can be better informed when deciding on treatment.

The American Hospital Association and other hospital groups had challenged the rule, which was issued in November 2019 and is scheduled to take effect on Jan. 1, 2021.

They said it would require them to divert scarce resources to the “herculean” and “inordinately costly” task of compiling health care costs, while reducing competition and causing confusion about patients’ out-of-pocket expenses.

Circuit Judge David Tatel, however, said concerns about the burdens “miss the mark,” and pointed to Health and Human Services Secretary Alex Azar’s findings that greater disclosures would benefit the “vast majority” of consumers and likely result in lower – not higher – prices.

“The Secretary weighed the rule’s costs and benefits and made a reasonable judgment that the benefits of easing the burden for consumers justified the added burdens imposed on hospitals,” Tatel wrote.

Neither the American Hospital Association nor its lawyer immediately responded to requests for comment. Spokespeople for Azar did not immediately respond to similar requests.

Tuesday’s decision upheld a June 23 ruling by U.S. District Judge Carl Nichols in Washington, D.C.

The U.S. Chamber of Commerce supported the hospital groups’ appeal, saying the rule would mislead patients about health care costs and could cause hospitals to demand higher prices for their services if they saw other hospitals were charging more.

The case is American Hospital Association et al v Azar, D.C. Circuit Court of Appeals, No. 20-5193.

(Reporting by Jonathan Stempel in New York; Editing by Dan Grebler)