The state of New York is revising a law that would have prohibited hospitals and health care practices from requiring patients to sign “consent to pay” forms before receiving treatment.
NY Public Health Law (PHL) 18 was set to take effect in late 2024. It is in limbo after the New York State Department of Health indicated it does not intend to enforce the statute until it better understands the legislature’s intent.
As it stands, the law “currently requires that patients provide consent for payment separate from consent to receive healthcare services,” a legal analysis by the law firm McDermott, Will & Emery writes. “That consent for payment cannot be given before the provider discusses treatment costs with the patient and the patient receives services. The statute has significant ambiguity and no formal guidance or regulations have been issued to date for [the law].”
Murky Prices
PHL 18 was the state’s attempt to push health care practices to be more transparent about the prices they charge.
At the federal level, the first Trump administration issued a final price transparency rule that went into effect on January 1, 2021. The rule required each hospital operating in the United States to provide price information online as a “comprehensive machine-readable file” and “in a display of shoppable services in a consumer-friendly format.”
Few hospitals complied under loosened enforcement during the Biden administration.
In addition, the No Surprises Act went into effect on January 1, 2022. The law was designed to protect patients from unexpected out-of-network medical bills for emergency services, certain nonemergency services at in-network facilities, and air ambulance services. It, too, had limited impact.
In January 2025, Ohio became the first state to codify the federal price-transparency rule. In 2022, Colorado approved legislation barring hospitals from debt collection if they are not complying with the federal rule.
Other states have enacted “right to shop” provisions to increase incentives for patients and insurers to shop for the lowest cost for services. (See related article, page 19.)
Stiff Resistance
New York’s law encountered stiff resistance from hospitals and physicians. The health-care research group KFF said patients and providers still engaged in a tug of war over prices.
“Patient advocates don’t want them to get stuck signing blank-check forms that put them in financial jeopardy,” stated KFF Health News. “Doctors, hospitals, and other providers don’t want to disrupt their practices’ workflow and payment logistics with cost discussions and paperwork, especially after services have been provided.”
Another problem could be providers’ desire to avoid competition that would push prices down, says Dallas-based health economist Devon Herrick, Ph.D.
“I suspect the reason they cannot discuss prices ahead of time is because too many patients would walk out the door,” wrote Herrick on The Goodman Institute Health Care Blog. “Yet, that is how competition works: customers decline a service and start to leave, forcing service providers to negotiate or lose business.”
Herrick says Trump’s executive order on price transparency in his second administration provides hope because it requires providers to specify actual prices, not estimates. (See related article, page 17.)
Transparency ‘Hack’
“It is unfortunate that New York state officials and the Biden administration didn’t have the gumption to enforce the respective law and regulation,” said Jeff Stier, a senior fellow at the Center for Consumer Choice.
Stier says it is not hard to see how the forms play out.
“It is not uncommon for a patient to go in for a procedure, say a colonoscopy, and even after receiving a prior authorization for the in-network provider to perform the service, an anesthesiologist calls in sick and an out-of-network provider steps in,” said Stier. “The anxious patient, who is told he or she must sign a tiny electronic agreement on a signature pad, consenting to pay whatever their insurance doesn’t, at 6:45 a.m., rarely foresees and considers that the colonoscopy was only the second-most vulnerable position they had put themselves in that day.”
Without enforced transparency rules, Stier says he recommends patients take an assertive approach.
“Patients should exercise their right to demand a printed agreement with a pen and modify it to agree to only pay for preauthorized services and agreed-upon fees,” said Stier.
Third Party Payer Cover
Patients must speak up to defend their interests, says Merrill Matthews, Ph.D., a resident scholar at the Institute for Policy Innovation.
“The issue of how to get hospitals and doctors to post real prices will not be resolved until patients demand to know those prices,” said Matthews. “And patients won’t demand that information until they, not their insurance company, bear most or all of the cost.
“Health insurance insulates patients from the cost, which also insulates them from the curiosity of knowing the price,” said Matthews. “What difference does the price of surgery make to the patient if his insurer is charging him a $350 copay [regardless]?”
The struggle over posting real prices isn’t all the fault of the hospitals and physicians, says Matthews.
“The insurers have negotiated different prices with different providers,” said Matthews. “Hospitals could post a standard price, but that’s misleading if the negotiated price is only 25 percent or 20 percent of the list price.
“The only solution to this problem is to have insurers indemnify the patient with a set amount of money for major medical procedures, much like auto insurance writes a check to the insured, and then the patient pays the medical provider,” said Mathews.
Bonner Russell Cohen, Ph.D., ([email protected]) is a senior fellow at the National Center for Public Policy Research.
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.
