MEDICAL SOCIETY OF THE STATE OF NEW YORK

General Business Law 519a Memorandum

Guidance from MSSNY General Counsel David Vozza, Esq on New Law Requiring Health Care Providers to Advise Patients of Risks Associated with Using A Credit Card For Paying Medical Bills

As we are all aware, the recent fiscal year 2025 NYS Executive Budget contains several provisions, to be effective October 20, 2024, which significantly impact health care practitioners and hospitals.

Applicable Provisions

A. General Business Law Section 519-a

  1. For purposes of this section, the term “credit card” shall have the same meaning as in section five hundred eleven of this article.
  2. No hospital or health care provider shall require credit card pre-authorization nor require the patient to have a credit card on file prior to providing emergency or medically necessary medical services to such patient.
  3. Hospitals and health care providers shall notify all patients about the risks of paying for medical services with a credit card. Such notification shall highlight the fact that by using a credit card to pay for medical services, the patient is forgoing state and federal protections that regard medical debt. The commissioner of health shall have the authority and sole discretion to set requirements for the contents of such notices.

B. General Business Law 349-g

  1. Restrictions on applications for and use of credit cards and medical financial products. 1. For purposes of this section, the following terms shall have the following meanings:

    (a) “Medical financial products” shall mean medical credit cards and third-party medical installment loans.

    (b) “Health care provider” shall mean a health care professional licensed, registered or certified pursuant to title eight of the education law.

    (c) “Medical credit card” shall mean a credit card issued under an open-end or closed-end plan offered specifically for the payment of health care services, products, or devices provided to a person.

  2. It shall be prohibited for any hospital or health care provider, or employee or agent of a hospital or health care provider, to complete any portion of an application for medical financial products for the patient or otherwise arrange for or establish an application that is not completely filled out by the patient.

C. Public Health Law 18-C

Informed consent from a patient to provide any treatment, procedure, examination or other direct health care services shall be obtained separately from such patient’s consent to pay for the services. Consent to pay for any health care services by a patient shall not be given prior to the patient receiving such services and discussing treatment costs. For purposes of this section, “consent” means an action which:

(a) clearly and conspicuously communicates the individual’s authorization of an act or practice;

(b) is made in the absence of any mechanism in the user interface that has the purpose or substantial effect of obscuring, subverting, or impairing decision-making or choice to obtain consent; and

(c) cannot be inferred from inaction.

Status and Guidance

On October 18, 2024, the NYS-DOH issued guidance to healthcare practitioners and hospitals regarding the aforesaid provisions.  The guidance is found at https://www.health.ny.gov/facilities/hospital/financial_assist/docs/dal_24-01.pdf

The most relevant portions of that guidance are as follows:

  1. Through the efforts of MSSNY and other advocacy groups, implementation/enforcement of the “separate consent to pay” law set forth in PHL 18-C is now stayed, subject to future/further guidance of the DOH;
  2. The DOH clarified that “medical financial products” include so-called medical credit cards and financing/installment payment arrangements. In connection with the completion of applications for such arrangement, practitioners must ensure they are wholly completed by patients, although they can provide assistance upon request.
  3. In connection with the consumer-protection related regulations pertaining to credit card payments, the DOH offered the following guidance:
    1. Practices shall not require patients to pre-authorize a credit card or keep a card on file as a condition for receiving emergency or medically necessary care. That said, practices may ask patients to voluntarily allow it to maintain a credit card on file for payments.  Again, the primary factor is that it cannot be mandatory.
    2. The “risk notification” requirements are onerous and seemingly impractical/impossible to implement. The DOH indicates that the patients need to be informed, EACH TIME A PATIENT ISSUES A PAYMENT WITH A CREDIT CARD, of the following:
      1. That medical bills paid by credit are no longer considered medical debt and that they are waiving certain protections regarding medical debt. When a patient pays for healthcare-related services, that “medical debt” effectively becomes “credit card debt” and loses the protections associated with medical debt. Although not specified, I believe those protections include:
        1. Fair Debt Collection Practices Act — Prohibits debt collectors from harassing, threatening, or using deceptive tactics to collect medical debt. Collectors cannot misrepresent the amount owed or threaten legal action they don’t intend to take. Restricts the times and methods by which debt collectors may contact patients, adding a layer of privacy and control over debt-related communications.
        2. Credit Reporting Protections – Provides that a) paid medical debt are no longer reported to credit bureaus; b) Unpaid medical debt is only reported after 12 months; and c) medical debt under $500 is no longer reported to credit bureaus.
        3. NYS Medical Lawsuits and Property Protections laws (various) – Prohibit placing liens on a primary residence or implementing wage garnishment for unpaid medical debt.
        4. NYS Credit Fairness Act – Shortens the statute of limitations for collecting medical debt from 6 years to 3 years
        5. General Interest Rate limitations generally associated with holding credit card debt.

Implementation

MSSNY continues to communicate with the DOH regarding concerns relating to these provisions. However, given the guidance provided by the DOH, practices are encouraged to prepare a notification for patient’s review, acknowledgement and (if possible) signature.  The template linked below can be provided to patients in-person for payments made while the patient is present at the practice or acknowledged electronically if the payment is made remotely:

The sample credit card policy acknowledgment form should be customized to your practice.  Please contact David Vozza, Esq, or your healthcare attorney to customize your form and policy.

Contact David N. Vozza, Esq, at 917-369-8867 or [email protected].

Click Here to Download the Sample Credit Card Policy Acknowledgment Form

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