Governor Hochul Signs Legislation Banning Use of Liens and Wage Garnishments in Medical Debt Collection
On November 29, 2022, New York Governor Kathy Hochul signed legislation (S.6522A/A.7363A) prohibiting health care providers from placing liens on a patient’s primary residence and from garnishing wages in furtherance of medical debt collection. “No one should face the threat of losing their home or falling into further debt after seeking medical care,” Hochul said in a press release.
The main provisions of the new law, effective immediately, include the following:
- With respect to property liens: “No property lien shall be entered or enforced against a debtor’s primary residence in an action arising from a medical debt and brought by a hospital licensed under article twenty-eight of the public health law or a health care professional authorized under title eight of the education law.”
- With respect to wage garnishments: “No amount shall be imposed in judgments arising from a medical debt action brought by a hospital licensed under article twenty-eight of the public health law or a health care professional authorized under title eight of the education law.”
Governor Hochul said that the law is designed to protect “consumers from abusive and punitive practices that lead to increased and undeserved financial pressure.” More than 50,000 New Yorkers have been sued for medical debt over the past five years with 8% of New Yorkers, or 1.6 million people, having delinquent medical debt marring their credit reports.
Prior to the passing of the new law, healthcare providers and hospitals could impose and enforce liens on a patient’s primary residence to satisfy a judgment in a medical debt lawsuit as well as garnish a patient’s wages by court order directing their employer to withhold earnings to satisfy the medical debt. The law will hinder the ability of healthcare providers to collect unpaid bills for medical care provided to their patients, making it more important to require their patients to give adequate financial assurances prior to treatment.
Bleakley Platt’s Health Law Practice Group can assist in navigating the constraints of the new legislation to ensure practices remain compliant with dictates imposed by this new state law. For further information, contact Robert Braumuller or Zaina S. Khoury, at RBraumuller@bpslaw.com or ZKhoury@bpslaw.com.