New York Healthcare Bill Broadly Impacts Financial Assistance, Medical Debt Collections and More

Major changes that will impact the way New York healthcare entities deal with medical debt collection practices and financial assistance programs, along with a laundry list of additional requirements that will go into effect October 20, 2024.

New York Senate Bill S8307 is focused on the state health and mental hygiene budget for the 2024-2025 state fiscal year. Specifically on the financial assistance (FA) and medical debt collection side, it expands hospital FA obligations, revises several financial thresholds, adds new rules to debt collection, and tightens restrictions on patient consent, credit cards, and other medical financial products.

Debt Collection Practices

In addition to all the national regulations for medical debt collections, New York enacts a new section in the Public Health Law that adds several requirements when trying to recover revenue in the state, including:

• Patients are permitted to apply for FA at any time during the collection process.
• Healthcare providers are prohibited from denying admission/treatment for services that are reasonably anticipated to be medically necessary because the patient has an unpaid medical bill.
• The sale of medical debt to a third party is prohibited unless the buyer is purchasing the debt for the express purpose of relieving the patient’s debt.
• No legal action is allowed against patients with incomes below 400% of the Federal Poverty Level (FPL)
• Hospitals and/or collection agents cannot begin civil action against a patient or begin collection activity for non-payment for at least 180 days after the first post-service bill is issued to the patient until the hospital has made reasonable attempts to determine if the patient qualifies for FA.

Financial Assistance Changes

The legislation expands New York healthcare financial assistance eligibility to a wider range of patients and implements greater patient protections related to medical debt collection practices. It defines “underinsured” as an individual that has accumulated out-of-pocket medical costs that amount to more than 10% of their gross income in the past 12 months and expands the applicability of FA programs to include such individuals.  In addition to the “underinsured” changes, immigration status is no longer allowed to be used to determine eligibility for FA.

Indigent Care Pool

There are also changes to how the State Indigent Care Pool (the Pool) impacts all hospitals, regardless of participation. Those that do not participate in the distribution of the Pool are now required to use a State-approved uniform FA form and comply with certain other FA and collection procedures. All hospitals that have 24-hour emergency departments are required to provide written notification about FA availability during the discharge process, not just during intake and registration. Installment plan payments are limited to no more than 5% of the patient’s gross monthly income with interest rates of no more than 2%. Hospitals that participate in the Pool are also required to report statistics to the New York State Department of Health as to the number of patients who applied for FA and we approved or denied, along with specific patient demographics.

Other Requirements

There are additional changes to the financial thresholds for FA around the FPL. All charges must be waived for incomes below at least 200% of the FPL and sliding fee schedules for up to 400% of the FPL. There are also restrictions on patient consent forms. Healthcare providers will be required to separate informed consent forms for treatment and for payment of services. The consent form for payment must not be given to the patient prior to receiving treatment and discussing treatment costs. Your consent form(s) may need to be updated to reflect this change.

Additional changes were made to completing any portion of an application for medical financial products, requiring credit card pre-authorization or having a card on file before emergency/medically necessary services, and hospitals/providers are required to notify all patients about the risks of paying for medical services with a credit card.

What Should You Do?

Facilities in New York are encouraged to review their existing FA and debt collection policies and procedures and make the necessary adjustments to incorporate the new requirements before October. Want to hear more about how Americollect can stand by you as your collections partner as you work through these legislative changes? Reach out to our Ridiculously Nice sales team to see how Americollect can assist you.