Protects patients from liens against their primary residence and wage garnishment due to money judgments arising from actions brought by hospitals or health care professionals.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7363A
SPONSOR: Gottfried TITLE OF BILL:
An act to amend the civil practice law and rules, in relation to
protecting patients from certain penalties due to money judgments aris-
ing from actions brought by hospitals or health care professionals
PURPOSE OR GENERAL IDEA OF BILL:
To protect patients from certain penalties due to money judgments
brought by hospitals or health care providers.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill amends paragraph (b) of Section 5201 of the Civil
Practice Law and Rules to prohibit a lien being placed on a person's
primary residence for medical debt judgments.
Section 2 of the bill amends paragraph (b) of Section 5231 of the Civil
Practice Law and Rules to prohibit wage garnishment for medical debt
judgments.
JUSTIFICATION:
New Yorkers struggle with health care costs, even when they have insur-
ance. i Over 50,000 New York patients have been sued for medical debt by
non-profit hospitals in the past five years-4,000 during the COVID-19
pandemic (March December 2020). Eight percent of New Yorkers have delin-
quent medical debt that appears on their credit reports. The problem is
most pervasive upstate: in Oswego County, this increases to 23% of resi-
dents and there are 16 other upstate counties where between 16 and 23%
of residents have an adverse credit entry for delinquent medical debt.
ii Medical debt is strongly associated with housing instability, and
even homelessness. iii Communities of color in New York are almost twice
as likely to have medical debt than their white counterparts. New York
State provides its non-profit hospitals with $1.1 billion in Indigent
Care Pool funds to support the provision of uncompensated care. While
most hospitals do not sue their patients, a significant minority do sue
their patients for relatively small amounts: the median court case is
for $1,900 dollars. These cases do little to stabilize a hospital's
finances but can have devastating financial consequences for the
patient. Once a hospital or health care provider secures a judgment in a
medical debt court case, they have the ability under New York State law
to place liens on a patient's home or garnish a patient's wages to
satisfy the medical debt judgment. This bill would promote housing
stability for patients by prohibiting nonprofit hospitals and health
care providers from imposing liens on a patient's primary residence to
satisfy a judgment in a medical debt lawsuit. New York's hospitals have
taken over 2,000 liens against their patient's homes. One hospital in
Albany County took over 250 liens in 2018 alone. Ten states and juris-
dictions already have placed protections on the family home, including:
Arkansas, Washington DC, Florida, Iowa, Kansas, Maryland, Oklahoma,
Puerto Rico, South Dakota, and Texas. This bill would also promote
income stability by prohibiting non-profit hospitals from securing wage
garnishments after prevailing in a medical debt lawsuit. A review of
wage garnishment data in medical debt cases in Albany, Fulton and Onon-
daga counties indicated that most of the patients worked in low-wage
service occupations such as retail, fast food and health care entities.
V Four states ban wage garnishments (North Carolina, Pennsylvania, South
Carolina, and Texas). Maryland recently banned hospitals from placing
wage garnishments on patients who are eligible for financial assistance.
PRIOR LEGISLATIVE HISTORY:
New bill
FISCAL IMPLICATIONS:
None
EFFECTIVE DATE:
Immediately.
1 Altarum Healthcare Value Hub and Community Service Society of New
York, "New Yorkers Struggle to Afford High Healthcare Costs; Support a
Range of Government Solutions Across Party Lines," March 2019,
HTTPS : / /WWW CSSNY.ORQ/NEWS/ENTRY/NEW-
STATEWIDE-HEALTHCARE-AFFORDABILITY SURVEY.CT
ii Urban Institute, "Debt in America: An Interactive Map," December
2019,
HTTPS //APPS.URBAN.ORG/ FEATURES/DEBT- INTERACTIVEMAP/?TYPE-OVERALI
&VAL- IABLE=PCTW MEDICAL DEBT IN COLLECTIONS&STATE=36&COUNTY= 36075.ct.
The counties are Cattaraugus, Cayuga, Chautauqua, Columbia, Cortland,
Greene, Jefferson, Madison, Onondaga, Rensselaer, Schenectady, Schuyler,
Seneca, Steuben, Sullivan, and Washington.
iii Seifert, R . "Home Sick: How Medical Debt Undermines Housing Securi-
ty," St Louis Univ Law J, 51:325; Bienlenberg, J. "Presence of Any
Medical debt Associated with Two Additional Years of Homelessness in a
Seattle Sample," The J of Health Care Organizations, 57:1-10, Jan. 2020.
iv Urban Institute, "Debt in America: An Interactive Map," December
2019,
HTTPS://APPS.URBAN.ORGIFEATURES/DEBT=/
INTERACTIVEMAP/?TYPE=OVERALL&VARIAE=PCT W MEDICAL DEBT IN
COLLECTIONS&STATE=36&COUNTY=36075
Amanda Dunker and Elisabeth Benjamin, "Discharged Into Debt: Medical
Debt and Racial Disparities in Albany County," January 2021,
HTTPS://WWW.CSSNY.ORG/PUBLICATIONS/ENTRY/ DISCHARGED-INTO-DEBT-MEDI-
CAL-DEBTAND-RACIAL- DISPARITIES-IN-ALBANY-COUNTY
STATE OF NEW YORK
________________________________________________________________________
7363--A
Cal. No. 295
2021-2022 Regular Sessions
IN ASSEMBLY
May 6, 2021
___________
Introduced by M. of A. GOTTFRIED, DINOWITZ, STECK, FAHY, McDONALD,
REYES, HEVESI, BRAUNSTEIN, L. ROSENTHAL, MAMDANI, SEAWRIGHT, SIMON,
WOERNER, CRUZ, BURGOS, GALEF, GONZALEZ-ROJAS, EPSTEIN, SOLAGES,
BICHOTTE HERMELYN, O'DONNELL, MITAYNES, BURDICK, FORREST, OTIS,
COLTON, McDONOUGH, BENEDETTO, J. RIVERA, KELLES, GIBBS, KIM, FERNAN-
DEZ, RAMOS, ANDERSON, THIELE -- read once and referred to the Commit-
tee on Codes -- recommitted to the Committee on Codes in accordance
with Assembly Rule 3, sec. 2 -- reported from committee, advanced to a
third reading, amended and ordered reprinted, retaining its place on
the order of third reading
AN ACT to amend the civil practice law and rules, in relation to
protecting patients from certain penalties due to money judgments
arising from actions brought by hospitals or health care professionals
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision (b) of section 5201 of the civil practice law
2 and rules is amended to read as follows:
3 (b) Property against which a money judgment may be enforced. A money
4 judgment may be enforced against any property which could be assigned or
5 transferred, whether it consists of a present or future right or inter-
6 est and whether or not it is vested, unless it is exempt from applica-
7 tion to the satisfaction of the judgment. A money judgment entered upon
8 a joint liability of two or more persons may be enforced against indi-
9 vidual property of those persons summoned and joint property of such
10 persons with any other persons against whom the judgment is entered. No
11 property lien shall be entered or enforced against a debtor's primary
12 residence in an action arising from a medical debt and brought by a
13 hospital licensed under article twenty-eight of the public health law or
14 a health care professional authorized under title eight of the education
15 law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11180-03-2
A. 7363--A 2
1 § 2. Subdivision (b) of section 5231 of the civil practice law and
2 rules, as amended by chapter 575 of the laws of 2008, is amended to read
3 as follows:
4 (b) Issuance. Where a judgment debtor is receiving or will receive
5 money from any source, an income execution for installments therefrom of
6 not more than ten percent thereof may be issued and delivered to the
7 sheriff of the county in which the judgment debtor resides or, where the
8 judgment debtor is a non-resident, the county in which he is employed;
9 provided, however, that (i) no amount shall be withheld from the judg-
10 ment debtor's earnings pursuant to an income execution for any week
11 unless the disposable earnings of the judgment debtor for that week
12 exceed the greater of thirty times the federal minimum hourly wage
13 prescribed in the Fair Labor Standards Act of 1938 or thirty times the
14 state minimum hourly wage prescribed in section six hundred fifty-two of
15 the labor law as in effect at the time the earnings are payable; (ii)
16 the amount withheld from the judgment debtor's earnings pursuant to an
17 income execution for any week shall not exceed twenty-five percent of
18 the disposable earnings of the judgment debtor for that week, or, the
19 amount by which the disposable earnings of the judgment debtor for that
20 week exceed the greater of thirty times the federal minimum hourly wage
21 prescribed by the Fair Labor Standards Act of 1938 or thirty times the
22 state minimum hourly wage prescribed in section six hundred fifty-two of
23 the labor law as in effect at the time the earnings are payable, which-
24 ever is less; (iii) if the earnings of the judgment debtor are also
25 subject to deductions for alimony, support or maintenance for family
26 members or former spouses pursuant to section five thousand two hundred
27 forty-one or section five thousand two hundred forty-two of this arti-
28 cle, the amount withheld from the judgment debtor's earnings pursuant to
29 this section shall not exceed the amount by which twenty-five percent of
30 the disposable earnings of the judgment debtor for that week exceeds the
31 amount deducted from the judgment debtor's earnings in accordance with
32 section five thousand two hundred forty-one or section five thousand two
33 hundred forty-two of this article; and (iv) no amount shall be imposed
34 in judgments arising from a medical debt action brought by a hospital
35 licensed under article twenty-eight of the public health law or a health
36 care professional authorized under title eight of the education law.
37 Nothing in this section shall be construed to modify, abrogate, impair,
38 or affect any exemption from the satisfaction of a money judgment other-
39 wise granted by law.
40 § 3. This act shall take effect immediately.
