Pending New York City Legislation Would Create Further Price Transparency Requirements for Hospitals, and Impose Severe Penalties for Noncompliance

In September of this year, New York City Councilwoman Julie Menin announced her plan to introduce a series of bills that would create further price transparency requirements for hospitals, with noncompliance resulting in high financial penalties.

The bill package would create an office of hospital accountability that would inform the public as to how much hospitals are charging for various services via a price transparency information portal, where hospitals would be required to provide certain key pricing information to the public. Currently, such pricing data is not typically available for public access, and patients typically have little knowledge regarding how much they will be charged for services.

The legislation would add a municipal enforcement mechanism to the federal hospital price transparency rule that took effect on Jan. 1, 2021. This rule, which stems from a provision in the Affordable Care Act, requires hospitals to post their discounted cash prices and all insurance rates by plan so consumers can identify the best care at the best prices.

Enforcement of the federal rule has been minimal, with the U.S. Department of Health and Human Services imposing fines on just two hospitals nationwide, despite reports of widespread non-compliance. The proposed legislation would provide an additional enforcement threat. Though the City is not permitted to issue traditional fines for non-complying hospitals under state law, under the proposed legislation, non-complying hospitals can be penalized by alternative means.  For example, the legislation can challenge hospitals’ local property tax exemptions, and could require hospital CEOs to attest to complete published prices as a condition of ongoing municipal funds and benefits.

The push for transparency has support from several unions, as well as the Realty Advisory Board on Labor Relations. The coalition backing the legislation has launched a multi-million-dollar marketing campaign to raise awareness and garner further support.