New York State enacted changes to limit what hospitals in New York can charge eligible patients for emergency and medically necessary services and to strengthen consumer protection laws for patients with medical debt in 2024 The changes include prohibitions on health care providers from placing liens on an individual’s primary residence or garnishing wages to collect medical debt, as well prohibitions on reporting medical debt to consumer reporting agencies and removing unpaid medical debt from credit reports.
These protections, however, only apply to debt incurred with open-ended or closed-ended financial products specifically for the payment of health care services (e.g., CareCredit®). If a patient elects to pay with a traditional credit card, these heightened medical debt protections do not apply.
According to NYS Department of Health guidance:
• Medical Financial Product Applications:
Hospitals and health care providers (and their agents) may not complete any portion of an application for medical financial products for a patient or otherwise arranging or establishing an application that is not “completely filled out” by the patient.
Providers may answer patient questions and provide assistance if requested, as long as the application is completed wholly by the patient.
• Credit Card Pre-Authorization:
Hospitals and health care providers may not require credit card pre-authorization or require patients to have a credit card on file prior to providing emergency or medically necessary services.
Health care providers may ask patients to voluntarily choose to have a credit card on file, but may not require patients to do so.
• Credit Card Risk Notification:
Patients must be notified of the risks of paying for health care services with a traditional credit card each time a credit card is used to pay for services:
i Medical bills paid by credit card are no longer considered medical debt.
ii. By paying with a credit card, patients are foregoing federal and state protections around medical debt.
iii. Protections that patients must acknowledge forgoing include:
1. Prohibitions against wage garnishment and property liens
2. Prohibitions against reporting medical debt to credit bureaus
3. Limitations on interest rates
iv. Patients must affirmatively acknowledge foregoing these protections by paying with a credit card.
Patient acknowledgment is required, including for payments by phone, electronic means and in person:
• For payments by phone, provider staff may read the required notifications to the patient and obtain a verbal acknowledgement of the risks and consent to pay by credit card at the time the payment is made.
• For electronic payments, the required notifications should be read and acknowledged by the patient (e.g., by clicking an “acknowledgement” box) in each instance before the provider processes the credit card payment.
• For payments in person, provider staff should provide a written disclosure form with the required notifications for the patient’s signature, with the signed paper copy scanned into the patient’s record, or the patient can read the required notifications on a payment screen, with the patient signing to indicate acknowledgement and authorization of the payment by credit card