Medical debt collection in New York: your rights
In New York, hospitals, licensed health care professionals and ambulance services may not report medical debt to credit bureaus, and the bureaus may not include it in your report. A hospital or provider must sue within three years of treatment, and a judgment on its medical debt cannot be collected by garnishing your wages or by a lien on your primary residence. Collectors who break these rules or the FDCPA can be held liable.
Medical debt is different. You did not shop for it, the bill often arrives months late, and insurance may still be sorting out what it owes. New York has passed several laws in recent years that treat medical debt differently from a credit card balance. This post collects them in one place.
Everything below is New York law. The federal rules at the end apply in every state.
What counts as "medical debt"
New York defines medical debt as any obligation, or alleged obligation, to pay for health care services, products or devices provided by a licensed hospital, a licensed health care professional, or a certified ambulance service. It does not include a debt charged to a general credit card, but it does include a card issued specifically to pay for health care (N.Y. Gen. Bus. Law § 380-a(v)).
The rules below mostly apply to debts owed to those hospitals and providers, whether the provider collects them or hires a collector.
Medical debt stays off your credit report
The Fair Medical Debt Reporting Act, signed December 13, 2023 and effective immediately, did three things:
- Providers may not report it. A hospital, licensed health care professional or ambulance service may not furnish any portion of a medical debt to a consumer reporting agency, and its contracts with collectors or debt buyers must forbid them from reporting it (N.Y. Pub. Health Law § 4926).
- A reported debt is void. "Any portion of a medical debt that is furnished to a consumer reporting agency shall be void" (§ 4927).
- Bureaus may not include it. A consumer reporting agency may not report information relating to a medical debt, regardless of when it was incurred (N.Y. Gen. Bus. Law § 380-j(a)(3), (f)(1)(viii)).
One caution. The federal FCRA preempts some state credit reporting rules, and whether it limits parts of New York's medical debt reporting ban is a question this post does not answer. The text of the New York statutes is as stated above.
If a medical collection still appears on your report, see credit report errors and how to dispute your credit report.
Limits on suing and collecting
| Rule | What it says | Source |
|---|---|---|
| Time to sue | A hospital or licensed health care professional must sue on a medical debt within three years of treatment | CPLR 213-d |
| No wage garnishment | No income execution on a judgment from a medical debt action brought by a hospital or licensed health care professional | CPLR 5231(b) |
| No lien on your home | No property lien may be entered or enforced against your primary residence in a medical debt action brought by a hospital or licensed health care professional | CPLR 5201(b) |
Hospitals face more rules through their financial assistance policies under Public Health Law § 2807-k(9-a). As the statute reads, those policies must offer reduced charges to patients with incomes below at least 400 percent of the federal poverty level, and must:
- Give written notice at least 30 days before sending a debt to collection.
- Bar lawsuits to recover medical debt against patients with incomes below 400 percent of the federal poverty level.
- Wait at least 180 days after the first bill before suing or referring the account to a collector, and only after reasonable efforts to check eligibility for assistance.
- Pause collection while a completed application for assistance is pending.
- Bar selling the debt, unless the buyer is buying it to relieve the patient of it.
- Bar forced sale or foreclosure of a patient's primary residence to collect.
If you get a hospital bill you cannot pay, ask the hospital for its financial assistance application before the account goes to collection.
When a collector gets involved
Once a medical bill goes to a collection agency or is bought by a debt buyer, the FDCPA applies. The collector must send a validation notice, stop collecting if you dispute in writing within 30 days until it mails verification (15 U.S.C. § 1692g), and may not collect any amount the agreement or law does not allow (§ 1692f(1)). Medical bills are often wrong because insurance has not paid yet, so a written dispute matters. Our post on the debt validation letter shows what to send.
New York's DFS rule adds duties for third-party collectors and debt buyers, including substantiating the debt within 60 days of a written dispute. A collector that reports a medical debt, sues after three years, or threatens garnishment on a medical judgment is claiming rights New York law does not give it. That can violate § 1692e(5) and § 1692f(1), and GBL § 601(8) bars claiming a right known not to exist.
The FDCPA provides actual damages plus statutory damages of up to $1,000, and requires a collector found liable to pay the consumer's reasonable attorney's fees and costs. A GBL § 349 claim lets the court award fees to a prevailing plaintiff. If you are sued, do not ignore the papers: the time to answer is short. See sued by a debt collector and our New York page. For New Jersey and Florida, see New Jersey and Florida; the New York medical debt rules above do not apply there.
What to do this week
- Match the bill to your insurer's explanation of benefits. Note anything insurance should have paid.
- Ask the hospital for financial assistance in writing, and keep a copy.
- Pull your credit reports at AnnualCreditReport.com and look for medical collections.
- Dispute in writing any medical collection on your report and any collector's bill you believe is wrong.
- Check the treatment date. If a hospital or provider sues more than three years later, tell your lawyer.
Sources: N.Y. Gen. Bus. Law §§ 380-a(v), 380-j, 601, 349(h); N.Y. Pub. Health Law §§ 4926, 4927, 2807-k; N.Y. CPLR 213-d, 5201, 5231; S4907A (2023); 23 NYCRR 1 (DFS FAQ); 15 U.S.C. §§ 1692e, 1692f, 1692g, 1692k.
Common questions
A medical collection is on my credit report. What can I do?
Dispute it with the credit bureau in writing and cite New York General Business Law section 380-j, which bars a consumer reporting agency from reporting medical debt regardless of when it was incurred. New York's Public Health Law also says any portion of a medical debt furnished to a credit bureau is void. Keep copies and talk to a lawyer if it stays.
Does this cover a medical bill I put on my credit card?
Usually not. New York's definition of medical debt excludes debt charged to a general credit card. It includes a card issued specifically for health care services, products or devices.
Do these rules apply in New Jersey or Florida?
No. These are New York statutes. This post does not cover the medical debt rules of New Jersey or Florida; the federal FDCPA and FCRA apply in all three states.
Tell us what they did.
One conversation with an attorney, in your language. We tell you which laws the collector or the credit bureau broke, which deadline runs first, and what to save this week. If it is not a case we can take, we say so and tell you where to go.
(718) 484-7510The FDCPA and the FCRA require a company found liable to pay the consumer’s reasonable attorney’s fees and costs. Our fee arrangement is confirmed in a written retainer before we begin. English, Russian and Spanish in-house; an interpreter for any other language.