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Two new healthcare laws in New York State aim to protect patients. Learn what these laws mean and how they might affect healthcare providers.
On October 20, 2024, two new New York healthcare laws went into effect. The first addresses a patient’s consent to payment for services, while the second governs the use of credit cards to pay for medical services. Although enforcement of the first law is currently on hold as the state develops additional guidance, healthcare providers should stay informed about potential issues and prepare for the changes ahead.
Consent to Payment Law
Under NY Public Health Law (PHL) Sec. 18-C, healthcare providers must obtain separate payment consent from patients in addition to their consent to receive treatment or other services. Patients may only consent to pay for services after receiving them and discussing the associated costs with their healthcare providers.
Uncertainties Surrounding the Consent to Payment Law
Unfortunately, the state has not yet given much guidance about implementing this law. On behalf of New York physicians, the Medical Society of the State of New York (MSSNY) sent a letter to the New York State Department of Health (DOH) outlining the potentially negative impacts of the new requirements.
The MSSNY explained that obtaining payment consent after performing all services disrupts the workflow of healthcare practices, as typically, paperwork is completed at the beginning of the process. The letter also highlighted the challenges of ensuring patients provide signatures as they leave the practice after receiving services. In addition, the MSSNY pointed out that existing state and federal laws already require healthcare providers to inform patients about costs before performing services.
In response to requests for clarification from the MSSNY and others, the DOH stated that this provision is on hold until further guidance is issued.
Potential Impact of the Consent to Payment Law on Healthcare Practices
The DOH clarified that this new law applies to all patients who receive direct healthcare services, regardless of the type of healthcare provider. This suggests that both self-pay and insured patients may be subject to this law.
A key concern is that many insurance companies require healthcare providers to bill patients for cost-sharing amounts, such as co-pays and deductibles. If patients refuse to sign the payment consent after receiving services, providers may face difficulty billing for those services.
To ensure fairness and address the issues raised by the MSSNY, the DOH will need to issue clear guidance on implementing the new requirements.
Credit Card Law
Under GBL Sec. 519-A, hospitals and healthcare providers cannot require credit card pre-authorization or require the patient to keep a credit card on file unless and until emergency or medically necessary services have been provided to the patient.
In addition, hospitals and healthcare providers must inform patients about the risks of using a credit card to pay for medical services. They are required to explain that patients who pay with a credit card will forfeit state and federal protections for medical debt.
Impact of the Credit Card Law on Healthcare Providers
Unlike the consent to payment law, the DOH has provided some guidance on the credit card law. First, healthcare providers may request— but may not require—patients to keep a credit card on file before providing emergency or medically necessary services.
Thus, if a patient chooses not to keep a card on file and has not received emergency or medically necessary services, they will need to provide their credit card information each time they receive services. This process could slow down payment and make the overall workflow less efficient.
Notice Requirements for Credit Card Use
In addition, healthcare providers must inform patients of the risks of paying for medical services with a credit card each time a credit card is used for payment. The notice must include all of the following:
- Medical bills paid by credit card are no longer treated as medical debt.
- Paying with a credit card forfeits federal and state protections for medical debt.
- Patients must acknowledge that they are giving up protections, including bans on wage garnishment and property liens, bans on reporting medical debt to credit bureaus, and limits on interest rates.
Patients must affirmatively acknowledge that they are giving up these protections if they pay with a credit card. To comply with this requirement, healthcare providers should update their patient intake policies and procedures to include this notice.
Get Legal Support
While the DOH has paused enforcement of the consent to payment law and has yet to issue further guidance, healthcare providers should make every effort to comply with the provisions currently in effect. Consulting with an experienced healthcare attorney can help you understand and adapt to both new laws. If you operate in one of the states where we practice, you can schedule an initial consultation to learn more.
This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.
