Two new laws will protect New Yorkers from medical debt in 2023. The first bill, signed by Governor Hochul in November, stops all medical providers from garnishing patients’ wages or placing liens on their homes to collect medical debt judgments (S.6522A/A.7363A). The second bill, signed last week, reforms the practice of imposing facility fees by requiring hospitals and their affiliated providers to notify patients in advance if they charge facility fees and bans the fees for preventive care (S.2521C/A.3470C).

Property liens and wage garnishments were two of the worst consequences for patients sued by their hospitals or doctors after they could not afford medical care. The Community Service Society found that in just two years, New York’s hospitals placed 4,880 liens on patients’ homes. A study of just five hospitals revealed over 1,600 cases where patients’ wages were garnished. Both actions are especially troubling because the data on hospital lawsuits in New York suggests that many patients with medical debt were not adequately screened for financial assistance according to New York State law and IRS regulations (these apply to all hospitals in New York, which does not allow for-profit hospitals). Further, medical debt and all its consequences disproportionately effects people of color. The new law prevents ALL hospitals and other medical providers from taking these extreme actions against their patients—even veterinarians!

Notifying patients about facility fees, and banning them for preventive care, will make medical billing fairer. Facility fees are hospital overhead charges. The Affordable Care Act says that no one may be billed for preventive services, but facility fees still sometimes appear on patients’ bills because they are tied to the location of care, not the service. This law is the first in the nation that prevents facility fees for preventive care. The law also requires providers to notify patients ahead of time about the fee. This gives patients a chance to go somewhere else where they won’t be charged hospital fees for essentially outpatient care.  Providers already know your bill will include these fees before you walk in the door—it’s only fair that you do too! (You can hear more from patients about facility fees here and here).

FAQs: What Do Brand New #EndMedicalDebt Protections Mean for NY’ers?

1. When do these changes take effect?

Both laws go into effect immediately.

• Does either law apply retroactively?

Both laws are only prospective, not retroactive.

• Can private doctors still place a lien on my home or garnish my wages?

No! The new law applies to money judgments arising from debt collection actions by either hospitals or health care professionals. 

• Does the new law apply to all facility fees?

Yes! The new law requires ALL health facilities to disclose when a facility fee is added, and bars these fees for all preventative services—such as a screening mammogram.

• What’s next for the #EndMedicalDebt campaign?

Next, we’re fighting to prevent medical debt before it starts. The Ounce of Prevention Act would require all hospitals in the state to adopt a uniform financial assistance application and policy to simplify the process for patients to apply and be eligible for financial assistance. It would also condition distribution of state Indigent Care Pool (ICP) funds to the hospital’s implementation and compliance with the policy.