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New Bill Limits Assets That Can Be Pursued in Medical Debt Collection Action

On Wednesday, November 23, 2022, Governor Kathy Hochul signed a new Bill into law designed to greatly limit which assets medical providers or hospitals can pursue to collect on judgments secured in actions to recoup valid and unpaid medical debt. The Bill can only be seen as a further erosion of the legal rights creditors have to collect unpaid debt from debtors.


The new Legislation, which will take effect immediately, amends the civil practice law and rules to prohibit healthcare providers from placing liens on patients’ primary homes or garnishing their wages to collect on unpaid medical debt. In a misguided attempt to “protect” debtors from “unfair” collection practices, the State has enacted legislation that could have far reaching and very negative effects on the ability of healthcare providers and hospitals across the State to provide quality and affordable medical services for all New Yorkers.


The goal of this Legislation is to protect patients from unfair and abusive practices that lead to “housing instability” (Senate Bill S6522A). According to the Bill, “medical debt is strongly associated with housing instability, and even homelessness” and “New York’s hospital have taken over 2,000 liens against their patient’s homes.” This Legislation will give patients the peace of mind that they can seek medical care without the fear of losing their homes. “No one should face the threat of losing their home or falling into further debt after seeking medical care," Governor Hochul said in a recent press conference.


With further legislation having been recently passed by the federal government making it illegal for credit reporting agencies to list certain medical debt on an individual’s credit report, this new legislation makes it ever more critical that best practices are instituted to ensure you, or your facility, are compensated for the valuable medical services you deliver on a daily basis.


Our firm has extensive experience with pre-litigation efforts to collect medical debts, payer/payee disputes, Medicaid rate reimbursement and overpayment issues, and many other healthcare service-related matters. If you have any questions related to this Legal Briefing, please contact any member of our Firm at 585-730-4773. Please note that any embedded links may expire in the future.


New Bill Limits Assets That Can Be Pursued in Medical Debt Collection Actions
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This Legal Briefing is intended for general informational and educational purposes only and should not be considered legal advice or counsel. The substance of this Legal Briefing is not intended to cover all legal issues or developments regarding the matter. Please consult with an attorney to ascertain how these new developments may relate to you or your business. © 2022 Law Offices of Pullano & Farrow PLLC