Earlier this year, New York Local Law 844-A took effect, directing New York City Mayor Eric Adams to establish an Office of Healthcare Accountability to increase health care price transparency in New York City.
The Local Law requires the Director of the new Office to be responsible for myriad tasks, including: providing recommendations regarding health care and hospital costs to the mayor, council, comptroller, or trustees of the city pension systems; analyzing the city’s spending on health care costs for city employees, city retirees, and their dependents; keeping detailed information on where the public can find the publicly available price of common hospital procedures; bringing together key stakeholders (including hospital representatives, health care providers, health plan stakeholders, and self-insured entities) to review health care costs in the city; and making each hospital’s IRS Form 900, Schedule H, audited financial statements, and annual cost reports available to the public upon request.
The law defines “hospital” to mean a “general hospital” as defined in New York law, a hospital that provides medical and surgical services primarily to inpatient individuals or under a physician’s supervision on a 24-hour basis. It does not include residential health care facilities, public health centers, treatment centers, dispensaries, laboratories, or central service facilities that serve more than one institution.
The Local Law also institutes reporting requirements, starting February 18, 2025, and annually by January 1 thereafter. The Director of the Office must submit an annual report outlining the hospital systems’ pricing practices in New York City to the mayor, the Speaker of the New York City Council, and the New York State Attorney General. The report will also be published on the Office of Healthcare Accountability’s website and will include a summary of publicly available data, including – but not limited to – prices charged for common hospital procedures disaggregated by hospital and utilizing a baseline price; prices charged for common hospital procedures disaggregated by hospital, type of procedure, average rate of reimbursement received by the hospital from each major insurance provider, and the average rate of denial by major insurance providers or payors of “medically necessary care;” a breakdown of each major insurance provider and other payor’s profit margins, employee headcounts, overhead costs, and executive salaries and bonuses; and the impact of pharmaceutical pricing, insurance premiums, and the cost of medical devices on the city’s health care costs and individual patient out-of-pocket spending. A major insurance provider is a health insurance company whose business accounts for a significant portion of hospital payments in the city, as possibly further defined by the Office.
The Office may be established as a standalone office or within any Office of the Mayor or any department. The Director shall be appointed by the mayor, unless the Office is established within an agency other than the Office of the Mayor, in which case, it will be appointed by the head of the appropriate agency.
“Health care is a human right, not a privilege, and this includes ensuring that there is cost transparency in our health care system,” said Mayor Adams. “New Yorkers shouldn’t have to break the bank to get the health care they need, and Intro. 844-A will help ensure that New Yorkers have all the information they need to stay healthy and get the care they deserve.”