New York State passed a law changing the statute of limitations for medical debt in April of this year (Laws of 2020, Chapter 56). The new statute amends the Civil Practice Law and Rules to add section 213-d. Section 213-d now states that any action on a medical debt by a hospital licensed under Public Health Law Article 28 must be commenced within three years of treatment. Previously, medical debts were generally subject to the same six-year statute of limitations as other contract and quasi-contract actions.
The law went into effect on April 3, 2020. However, Governor Cuomo’s Executive Order 202.8 (“EO 202.8”) delayed the effectiveness of the new law. EO 202.8 stated that “any specific time limit for the commencement, filing, or service of any legal action . . . as prescribed by the procedural laws of the state . . . is hereby tolled.” EO 202.8 was extended by multiple subsequent Executive Orders. Governor Cuomo, on October 4, 2020, issued a new Executive Order 202.67 (“EO 202.67”). EO 202.67 states that the tolling effect of EO 202.8 will no longer apply to civil cases as of November 4, 2020.
There are several questions raised by the new law that, barring further amendment, will inevitably be flushed out in future lawsuits. Such questions include (1) whether the legislature intended the term hospital to include nursing homes, diagnostic and treatment centers, and other facilities defined as a hospital under Article 28, or only general hospitals; (2) whether the law has a retroactive effect (will medical debts for treatment provided before April 3, 2020, be subject to the three-year or the six-year statute); (3) whether EO 202.8 tolled the new statute of limitations or merely suspended the application of the new law; and (4) how will the accrual date for medical debt be calculated (will multiple-day stays or treatment be treated as one treatment or is each day a new treatment).
The answers to such questions appear evident. Until these questions are put to the test in court, however, certainty will be elusive. For now, health care facilities should be prepared to start lawsuits earlier in the collection process to avoid running afoul of this law.
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