Add Art 49-A 4925 - 4927, Pub Health L; amd 380-a & 380-j, Gen Bus L
Prohibits medical debt from being collected by a consumer reporting agency or included in a consumer report and prohibits medical service providers from reporting medical debt directly or indirectly to a consumer reporting agency.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6275A Revised 6/14/2023
SPONSOR: Paulin TITLE OF BILL:
An act to amend the public health law and the general business law, in
relation to prohibiting medical debt from being collected by a consumer
reporting agency or included in a consumer report
PURPOSE OR GENERAL IDEA OF BILL:
To prohibit hospitals, medical providers, or ambulance services from
providing adverse information about medical debt to consumer reporting
agencies.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 states this act shall be known as the "fair medical debt
reporting act"
Section 2 enacts a new Article 49-A to the Public Health Law.
§ 4925 defines the terms "medical debt," "collection entity," and
"consumer reporting agency."
§ 4926 prohibits hospitals, medical providers, or ambulance services
from furnishing any portion of a medical debt to a consumer reporting
agency and requires them to include a provision in any contracts entered
with the collection entity for the purchase or collection of medical
debt that prohibits the reporting of any portion of such medical debt to
a consumer reporting agency.
§ 4927 voids any medical debt that is furnished to a collection agency
by a hospital, medical provider, or ambulance service.
Section 3 amends the § 380-a of the General Business law adding a new
(v) defining the term "medical debt"
Section 4 amends § 380-j of the General Business law adding a new (a)(3)
to include medical debt as prohibited information that can be reported
to a consumer reporting agency.
Section 5 amends § 380-j of the General Business law adding a new
subsection (viii) to prohibit a consumer reporting agency to make a
consumer report containing any information about a medical debt regard-
less of the date it was incurred.
Section 6 sets an effective date.
JUSTIFICATION:
This bill would protect New Yorkers from medical debt by prohibiting the
reporting of medical bills to credit reporting agencies.
Medical debt is a serious problem afflicting 100 million Americans (41%
of the population). According to the NY Health Foundation, medical debt
is not an equal opportunity problem: 28% of African Americans and 22% of
Latinx people carry medical debt versus 22% of White people. This debt
ruins patients' financial well-being considering that 58% of all third-
party debt collection tradelines were for medical debt, meaning that
medical debt is the most common form of recorded debt. Medical billing
is both confusing and difficult to navigate. Pricing is opaque and
insurance payments are bewildering. A New York poll shows that 41% of
New Yorkers have either appealed a medical bill or paid one they don't
think they owe for fear of being sued or placed into collections. Anoth-
er 38% avoided care or sacrificed other necessities because of the cost
of health care.
After billing, providers or their collection entities often send unpaid
accounts to third-party credit reporting agencies. These reporting agen-
cies do not have access to provider and insurance records and make it
difficult for patients to either confirm the accuracy of their debt or
to make corrections if there is a billing reporting error. The Federal
Consumer Financial-Protection Bureau has found that medical debt is less
predictive of a consumer's ability to pay future bills than any other
tradeline appearing. on consumer reports. This problem has serious
implications, a bad credit record can make it impossible for a patient
to rent a home, buy a car, or secure a loan for a home repair or educa-
tional opportunity.
This bill protects patients from being punished for doing the right
thing: taking care of their or their family member's physical or mental
health. While the credit reporting agencies have voluntarily agreed to
not report medical debts below $500, this does not protect patients in
New York State, where healthcare prices are notoriously high and
increasing quickly with inflation. In recognition of the need to further
protect patients from medical debt reporting, the Consumer Financial
Protection Bureau ruled in 2022 that state laws prohibiting medical debt
reporting would not be preempted by federal collection laws.
This bill will help ensure that patients are able to secure the health-
care they need, without fear of facing financial ruin.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
6275--A
2023-2024 Regular Sessions
IN ASSEMBLY
April 3, 2023
___________
Introduced by M. of A. PAULIN, SEAWRIGHT, ARDILA, McDONALD, FORREST,
SEPTIMO, GONZALEZ-ROJAS, SIMONE -- read once and referred to the
Committee on Consumer Affairs and Protection -- committee discharged,
bill amended, ordered reprinted as amended and recommitted to said
committee
AN ACT to amend the public health law and the general business law, in
relation to prohibiting medical debt from being collected by a consum-
er reporting agency or included in a consumer report
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "fair medical debt reporting act".
3 § 2. The public health law is amended by adding a new article 49-A to
4 read as follows:
5 ARTICLE 49-A
6 MEDICAL DEBT REPORTING
7 Section 4925. Definitions.
8 4926. Medical debt reporting prohibited in contracts with
9 collection entities.
10 4927. Enforcement.
11 § 4925. Definitions. As used in this article, the following terms
12 shall have the following meanings:
13 1. "Medical debt" means an obligation or alleged obligation of a
14 consumer to pay any amount whatsoever related to the receipt of health
15 care services, products, or devices provided to a person by a hospital
16 licensed under article twenty-eight of this chapter, a health care
17 professional authorized under title eight of the education law or an
18 ambulance service certified under article thirty of this chapter.
19 Medical debt does not include debt charged to a credit card unless the
20 credit card is issued under an open-ended or closed-end plan offered
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09626-04-3
A. 6275--A 2
1 specifically for the payment of health care services, products, or
2 devices provided to a person.
3 2. "Collection entity" means any individual, partnership, corporation,
4 trust, estate, co-operative, association, government or government
5 subdivision, agency or other entity that either purchases medical debt
6 or collects medical debt on behalf of another entity.
7 3. "Consumer reporting agency" shall have the same meaning as such
8 term is defined in section three hundred eighty-a of the general busi-
9 ness law.
10 § 4926. Medical debt reporting prohibited in contracts with collection
11 entities. A hospital licensed under article twenty-eight of this chap-
12 ter, a health care professional authorized under title eight of the
13 education law, or an ambulance service certified under article thirty of
14 this chapter:
15 1. shall not furnish any portion of a medical debt to a consumer
16 reporting agency; and
17 2. shall include a provision in any contract entered into with a
18 collection entity for the purchase or collection of medical debt that
19 prohibits the reporting of any portion of such medical debt to a consum-
20 er reporting agency.
21 § 4927. Enforcement. Any portion of a medical debt that is furnished
22 to a consumer reporting agency shall be void.
23 § 3. Section 380-a of the general business law is amended by adding a
24 new subdivision (v) to read as follows:
25 (v) The term "medical debt" means any obligation or alleged obligation
26 of a consumer to pay any amount whatsoever related to the receipt of
27 health care services, products, or devices provided by a hospital
28 licensed under article twenty-eight of the public health law, a health
29 care professional authorized under title eight of the education law, or
30 an ambulance service certified under article thirty of the public health
31 law.
32 § 4. Subdivision (a) of section 380-j of the general business law, as
33 added by chapter 867 of the laws of 1977, is amended to read as follows:
34 (a) No consumer reporting agency shall report or maintain in the file
35 on a consumer, information:
36 (1) relative to an arrest or a criminal charge unless there has been a
37 criminal conviction for such offense, or unless such charges are still
38 pending,
39 (2) relative to a consumer's race, religion, color, ancestry or ethnic
40 origin, [or]
41 (3) relative to a medical debt as defined in this statute; or
42 (4) which it has reason to know is inaccurate.
43 § 5. Subparagraphs (vii) and (viii) of paragraph 1 of subdivision (f)
44 of section 380-j of the general business law, as added by chapter 867 of
45 the laws of 1977, are amended to read as follows:
46 (vii) information relating to past confinement in a mental institution
47 where the date of last confinement antedates the report by more than
48 seven years; [or]
49 (viii) information relating to a medical debt regardless of the date
50 it was incurred; or
51 (ix) any other adverse information which antedates the report by more
52 than seven years.
53 § 6. This act shall take effect immediately.
