New York has significantly expanded financial assistance and medical debt collection protections for patients effective October 20, 2024. The key requirements include:
Expanded Financial Assistance Eligibility
- Hospitals must provide free care (waive all charges) for uninsured patients with incomes below 200% of the federal poverty level (FPL). No nominal payment can be required.
- For uninsured patients with incomes between 200-300% of the FPL, hospitals cannot collect more than 10% of what Medicaid would have paid. For underinsured patients in this income range, hospitals cannot collect more than 10% of the patient's insurance cost-sharing amount.
- For uninsured patients with incomes between 301-400% of the FPL, hospitals cannot collect more than 20% of what Medicaid would have paid. For underinsured patients in this range, hospitals cannot collect more than 20% of the patient's insurance cost-sharing amount.
- Immigration status cannot be considered when determining eligibility for financial assistance.
Enhanced Billing and Collection Protections
- Hospitals cannot deny medically necessary care due to unpaid bills.
- Installment plans cannot exceed 5% of the patient's gross monthly income, with interest rates capped at 2%.
- Hospitals cannot sell medical debt to third parties unless explicitly to relieve the patient's debt.
- No legal actions can be taken against patients below 400% of the FPL to recover unpaid bills.
- Hospitals must allow patients to apply for financial assistance at any point in the collection process.
- Hospitals cannot commence collection actions for at least 180 days after the initial post-service bill.
- Hospitals must provide written financial assistance notifications during discharge, not just intake.
The new requirements build on previous New York laws that mandated hospitals have written financial assistance policies with sliding scale discounts, prohibited sending collection letters while financial assistance is pending, required 30-day pre-collection notices, and restricted certain collection actions like home foreclosures. These robust protections aim to ensure affordable healthcare access for low and moderate-income New Yorkers while curbing aggressive medical debt collection practices.
Previous Content from our 2013 Blog, Facing Medical Debt in New York? 11 Good Medical Debt Protection Laws
- Hospitals may not charge uninsured patients with income under 300% of the federal poverty level more than what the hospitals receive from Medicare, Medicaid, or the highest volume payer for that hospital.
- New York requires hospitals to use a written financial assistance policy that sets forth a sliding scale and discount rates.
- Patients with income under the federal poverty threshold may only be liable for a nominal amount, while those patients with 100% to 150% of the poverty level may only be required to pay up to 20% of the amount paid by insurers.
- Hospitals must provide for payment plans with payments not to exceed 10% of the patient's gross monthly income and for which interest is limited to the rate on a 90-day Treasury bill plus 0.5%.
- New York hospitals may not send collection letters directly to patients who are in the process of applying for Medicaid or other financial assistance.
- New York hospitals must provide a 30-day notice to patients before referring the bill to a debt collector.
- A hospital may not foreclose on a patient's home but may place a lien on it.
- Debt collectors must obtain the hospital's consent before commencing a lawsuit to collect the medical debt.
- Collectors must follow the hospital's financial assistance policies and provide information on such policies.
- Hospitals must provide notices of their financial assistance policies.
- New York hospitals that receive state charities are prohibited from engaging in discriminatory pricing practices.
This bulleted list was derived from N.Y. Pub. Health Law § 2807 and National Consumer Law Center, Collection Actions (2d ed. 2011).