The New York State Department of Health has issued guidance summarizing changes to state laws and regulations that impact how hospitals in The Empire State will handle patient eligibility, collect on unpaid debts, and manage financial assistance applications, among other changes.
Expanded Eligibility for Financial Assistance
A new law in New York has increased the income threshold for financial assistance eligibility. Previously, patients without health insurance and earning up to 300% of the Federal Poverty Level (FPL) could apply for assistance. Under the updated guidance, patients earning up to 400% of the FPL are now eligible. Importantly, patients who have health insurance but have spent more than 10% of their income on out-of-pocket medical expenses are also eligible.
Collections Restrictions
The law introduces significant changes in collection practices for hospitals. Notably, hospitals are prohibited from selling patient debt to third parties unless the debt buyer intends to forgive the debt. Additionally, lawsuits to collect unpaid balances cannot be initiated before 180 days from the issuance of the first medical bill, and no legal action can be taken against patients earning up to 400% of the FPL. Finally, the hospital’s chief financial officer must sign an attestation that the facility has determined a patient’s income is above 400% of the FPL before initiating any collection lawsuit.
Uniform Financial Assistance Application
All hospitals in New York must now use a standard application form for financial assistance, regardless of whether they participate in the Indigent Care Pool. This measure is intended to streamline the financial assistance process and make it more accessible for patients. Patients can apply for assistance at any point, including during the collections process, and hospitals are required to notify them about the availability of financial assistance both at intake and at discharge.
Medical Financial Products
New consumer protections also address the use of medical financial products such as credit cards and third-party medical loans. Hospitals are no longer allowed to complete or facilitate applications for these products on behalf of patients. Patients must complete applications themselves, ensuring they understand the terms and are not coerced into taking on additional financial burdens. As well, medical bills that are paid by credit card are no longer considered medical debt and patients forego any medical debt protections when using a credit card.
