On June, 23, 2023, New York City Mayor Eric Adams signed the Healthcare Accountability and Consumer Protection Act (Intro. 844-A). This local law amends the New York City Charter and directs the Mayor to establish an Office of Healthcare Accountability – the first of its kind in the country. Among other things, the NYC Office of Healthcare Accountability will allow New Yorkers to compare costs charged by NYC hospitals for the same services.
Duties of the NYC Office of Healthcare Accountability
The Director of the NYC Office of Healthcare Accountability will be required to:
- provide recommendations to the Mayor and other officials related to NYC healthcare and hospital costs, including the proportion of healthcare costs spent on hospital care. These recommendations must acknowledge and differentiate the needs of safety net hospitals;
- provide recommendations to the State Commissioner of Health to stabilize safety net hospitals;
- analyze NYC expenditures on health care costs for NYC employees, retirees and their dependents;
- convene key stakeholders to examine healthcare costs (e.g., hospital representatives, healthcare providers, healthcare plans, and self-insured entities); and
- collect and make available, upon request, hospital financial documents, including IRS Form 990, Schedule H; audited financial statements, and annual cost reports as required by the Centers for Medicare and Medicaid Services.
Public Postings Regarding Hospital Services
The new Office of Healthcare Accountability must provide information on its website related to costs of common hospital procedures. These public disclosures must be in a simplified, publicly accessible format, based on publicly available information. The website must also allow for consumers to generate price comparisons between hospitals for common services.
Further, one year after the law takes effect, the Director of the Office of Healthcare Accountability will be required to report to the Mayor, Speaker of the New York City Council, and the Attorney General on the pricing practices of NYC hospitals, including details regarding, among other things:
- average rates of reimbursement for certain procedures received by hospitals from each major insurance provider;
- average rates of denials by major insurance providers or payers for medically necessary care;
- breakdowns of each major insurance provider’s and other payers’ profit margins, employee headcounts, overhead costs and executive salaries and bonuses;
- summaries of hospital community benefit information, and implementation reports regarding hospitals’ performances in meeting the healthcare needs of the community, providing charity care, and improving access to healthcare services by the underserved; and
- a summary of the impact of pharmaceutical pricing, insurance premiums, and the cost of medical devices on NYC’s healthcare costs and patients’ out-of-pocket spending.
The Healthcare Accountability and Consumer Protection Act will become effective in February 2024. The Director of the Office of Healthcare Accountability’s first report and the website posting requirements begin one year later, with annual reporting and posting required (by January 1st) thereafter.
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If you are a provider, hospital or facility that operates in NYC, and you have questions about the Healthcare Accountability and Consumer Protection Act or applicable federal or New York State healthcare price transparency requirements and obligations, feel free to contact the Healthcare Attorneys at Sheppard Mullin.
 As required pursuant to section 501(r) of the Internal Revenue Service Code.
 As required pursuant to section 6033(b)(15)(b) of the Internal Revenue Service Code.