Senate Bill S7778

                                 
BILL NUMBER: S7778

SPONSOR: RIVERA
 
TITLE OF BILL:

An act to amend the public health law, in relation to prohibiting state-
operated hospitals from suing patients for medical debt

 
PURPOSE OR GENERAL IDEA OF BILL:

To prohibit state-operated hospitals from suing patients for medical
debt.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends the public health law by adding a new article 51.
Article 51 prohibits state university health care facilities authorized
under Article 8 of the education law, cancer institutes authored under
article 10-c of the public authorities law, and hospitals authorized
under section 2600 of the public health law from pursuing litigation
against patients for medical debt.

              

Section 2 is the effective date.

 
JUSTIFICATION:

This bill would protect New Yorkers who receive care from New York
State-operated hospitals from medical debt lawsuits. There are five
State-operated hospitals: SUNY Upstate (Syracuse), SUNY Downstate
(Brooklyn), SUNY Stony Brook (Long Island), Roswell Park (Buffalo) and
Helen Hayes (Rockland County). Together, they sue their patients at
disproportionate rates compared to other New York hospitals, suing over
3,000 patients per year. These lawsuits are pursued in State Supreme
Court by lawyers from the Attorney General's office.

An analysis of SUNY Upstate by the Community Service Society found that
over 50 percent of the cases were filed in zip codes where residents are
disproportionately people of color. They also found that 77% of patients
who were sued live in zip codes where the median income is under $70,000
a year and thus were likely eligible for hospital financial assistance
under state law. Another dozen patients who were sued lived in prison,
and thus were unlikely to have any significant income at all.

A July 2023 study by the Urban Institute indicates that 740,000 New
Yorkers are afflicted by medical debt and that it is disproportionately
shouldered by people of color, low-income people, and people who live in
rural parts of New York State. This report noted that areas where the
percentage of New Yorkers with medical debt are high coincide with areas
where there are hospital medical debt litigation hotspots. Medical bill-
ing is both confusing and difficult to navigate. Pricing is opaque and
insurance payments are bewildering.

New York State operated hospitals receive over $500 million annually in
federal and state disproportionate share hospital (DSH) funding.  They
also benefit from local, state, and federal tax exemptions.  Private and
voluntary hospitals in New York receive only a portion of the DSH fund-
ing for which they could be eligible because the need in New York is
greater than New York's DSH funding cap. By contrast, these five State-
operated hospitals receive the full amount of funding for which they are
eligible, with the State paying the entire non-federal share of the DSH
funding. Unlike these State-run hospitals, locally operated government-
run public hospitals are only able to receive the full amount of DSH
funding when their localities pay a portion of the non-federal share.
Moreover, the largest government-run public hospital system in New York
State, New York City Health and Hospitals, does not sue any patients at
all.

Suing patients is expensive and does little to offset the State-run
hospitals' margins. For example, the total amount SUNY Upstate sued
patients for in one year was just $16 million. SUNY Upstate's annual
operating budget was $1.5 billion, indicating its practice of suing its
patients will do little to ameliorate its bottom line.

This bill would prohibit State-run hospitals from suing patients for
medical debt and prevent them from perpetuating medical debt collection
tactics that place an obscene burden on low-income New Yorkers who seek
necessary medical care.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATION:

None.

 
EFFECTIVE DATE:
Immediately.