S.705 (Krueger)/A.2140 (Jackson) – AN ACT in relation to fair pricing for low-complexity, routine medical care, “The Fair Pricing Act”
EmblemHealth supports New York State legislation S.705 (Krueger)/A.2140 (Jackson) which caps payments of routine outpatient services performed at hospitals. This legislation addresses affordability and the unjustified variation in prices for the same services across sites of care.
One of the driving factors in rising health care costs is the variation of prices for the same services depending on where care is delivered. Hospitals often charge significantly more than physician offices for routine care such as drug infusions, mammograms, and imaging. 1 A recent report from the NYC Office of Healthcare Accountability found NYC hospitals charged between 256% and 520% of Medicare rates for inpatient services and between 348% and 767% for outpatient services. 2 These findings are supported by similar trends across the State where private insurers are paying hospitals an average of 316% of Medicare for inpatient services and 289% of Medicare for outpatient services .3 Furthermore, high prices do not mean quality services; New York is ranked 39th in the nation for hospital quality. 4
The proposed legislation would confront these rapidly rising costs by establishing a site-neutral payment policy that caps payments for specific outpatient and ambulatory services at no more that 150% of Medicare rates, ensuring that the cost of care isn’t dependent on where it’s received. It would also stop the charging of separate facility fees that hospitals often add for their outpatient facilities. Further, it would increase price transparency by requiring the state to collect and publish data on prices and utilizations as well penalize providers that fail to comply.
Similar efforts on reigning in healthcare costs have been successful in Oregon, where hospital payments where limited to 200% of Medicare rates for in-network services and to 185% of Medicare rates for out-of-network for the State’s public employees’ health benefit program. In the first two years of its implementation, the change led to $107.5 million in savings for the state.
The passage of the Fair Pricing Act would deliver affordability, accountability and transparency for New Yorkers. Establishing a clear and enforceable pricing standard for routine low-complexity medical care creates a more efficient healthcare system that protects consumers from unjustified cost inflation. EmblemHealth supports the passage of Senate Bill 705/Assembly Bill 2140 and commends Senator Krueger and Assemblymember Jackson for their leadership on this issue.
About EmblemHealth
EmblemHealth is a mission-based, non-profit health plan headquartered in New York City with approximately 2 million enrollees in New York. For more information on how we’re supporting Women’s Health, please visit Women’s Health | EmblemHealth.