Press Release

New CSS Report: Enactment of Fair Pricing Act (FPA) Will Curb High Health Care Costs

Report refutes hospitals' claims that insurance carriers will retain FPA savings and not pass them through to payers and patients

Rising hospital prices are driving the state's healthcare affordability crisis, with hospital spending representing more than one third of all health care expenditures in New York. But a modest legislative reform before state policymakers can significantly improve health care affordability by curbing high health care prices for a limited set of routine outpatient services, benefiting patients, unions and employers.

A new Community Service Society of New York (CSS) brief, How the Fair Pricing Act's Site Neutral Policy Boosts Health Care Affordability by Ensuring Savings will be Passed Through to Patients and Payers, explains how the state's existing insurance regulatory infrastructure prevents insurance carriers from retaining savings achieved through the Fair Pricing Act (S705/Krueger -A2140/Jackson) and how these savings would be passed on to patients, employers, and other payers.

Specifically, the legislation proposes to establish site neutral policies for a modest set of outpatient procedures-that are easily performed in doctor's offices and hospital clinics. The Act would cap prices at 150 percent of the Medicare reimbursement rate regardless of where they are performed. This would stem the phenomenon of hospital-affiliated providers and clinics from charging excessive rates for simple services simply because they performed in a hospital-affiliated setting. Such services include annual physical exams, vaccines, drug infusions, mammograms, lab tests, diagnostic imaging and other minor procedures. The Act targets site-specific payment differences which are a key driver of rising health care prices.

A February 2025 report by Brown University's School of Public Health found that the Fair Pricing Act would result in more than $1 billion in health care savings and directly reduce out-of-pocket costs for New York patients by $213 million a year.

"The affordability of healthcare shouldn't depend on the building it's delivered in. All New Yorkers should be able to receive routine medical care in a doctor's office without paying exorbitant hospital prices," said State Senator Liz Krueger, primary sponsor of S705. "The Fair Pricing Act will help remedy the illogical and unfair hospital pricing system we currently have. New Yorkers are feeling more strapped than ever, and this bill is the kind of common-sense financial relief that they are demanding from Albany."

"Healthcare is a basic right, not a luxury. Too many families are forced to choose between care and financial stability because of inflated hospital costs. The Fair Pricing Act ensures that routine care is accessible and affordable for all New Yorkers," said State Assemblymember Chantel Jackson, primary sponsor of A2140. "This legislation will ease the burden on everyday families and empower communities to prioritize health over debt. It holds hospitals accountable, promotes transparency, and sends a clear message: New Yorkers deserve fairness in the healthcare system. Together, we are building a system that values people over profits and puts families first."

"Albany lawmakers have an opportunity to regulate hospital prices and put the brakes on the rapid growth of health care spending by enacting the Fair Pricing Act," said David R. Jones, CSS President and CEO. "They should do it because we know higher hospital prices are not associated with increased quality of care. It's time for New York to join other states that have already implemented policies to address high hospital costs."

"We cannot let high hospital prices continue to threaten healthcare affordability for working class New Yorkers. Our members count on being able to go to their local doctor's office to take their kid for a flu shot, get an MRI for a balky knee or an IV bag for dehydration and they shouldn't have to pay inflated prices just because a big hospital took over that facility," said Manny Pastreich, President of 32BJ SEIU. "This report shows that a Fair Pricing policy makes healthcare fairer for all New Yorkers. 32BJ SEIU is proud to work with partners in the Coalition for Affordable Hospitals fighting for regular New Yorkers to access and afford quality healthcare."

"Patients and payers face sharp increases in health care spending when routine care shifts from doctors' offices to higher-priced hospital-affiliated settings," said Alison Goldberg, CSS Health Policy Analyst and co-author of the CSS brief. "The Fair Pricing Act would curb these high prices and generate significant savings for New Yorkers, no matter where they receive care."

"The Fair Pricing Act provides an opportunity for New York legislators to make health care more affordable for patients, regardless of whether they have health insurance," said Mia Wagner, CSS Director of Health Policy and co-author of the CSS brief. "State action to control health care prices is especially critical following devastating federal cuts to health care that will leave over a million New Yorkers uninsured."

The CSS brief was co-authored by CSS Health Policy Analyst Alison Goldberg, CSS Director of Health Policy Mia Wagner, and CSS Vice President of Health Initiatives Elisabeth Benjamin.

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The Community Service Society of New York (CSS) has worked with and for New Yorkers since 1843 to promote economic opportunity and champion an equitable city and state. We power change through a strategic combination of research, services, and advocacy to make New York more livable for people facing economic insecurity. By expanding access to health care, affordable housing, employment opportunities, debt assistance, and more, we make a tangible difference in the lives of millions. Join us at www.cssny.org.

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