New York Medical Debt Laws: Every Protection, With the Date It Took Effect

The laws, in one table

Hospital charges: the 2024 amendments

Public Health Law section 2807-k governs hospital financial assistance. The state budget enacted in 2024 amended it effective October 20, 2024, and the changes are the reason most hospital scripts are out of date.

The income ceiling moved from 300% to 400% of the federal poverty level. Charges to an uninsured patient are capped at 10% of the Medicaid rate between 201% and 300%, and 20% between 301% and 400%; below 200% the charge is zero. Insured patients whose out-of-pocket medical costs in the past 12 months exceed 10% of gross income are “underinsured” and get the same tiers applied to their share. Every hospital licensed in the state is bound, not only those in the Indigent Care Pool, and every hospital must accept the state’s uniform application. The full walkthrough is on the hospital financial assistance page.

Lawsuits: who cannot be sued, and when

Since October 2024 a hospital may not sue a patient whose household income is under 400% of the poverty level, and before filing any medical debt lawsuit the hospital’s chief financial officer must attest that the patient’s income is above that line. No hospital may sue, or send an account to a collector, within 180 days of the first bill after discharge.

Two older rules apply to every medical debt, hospital or not. The time limit to file a lawsuit over medical debt is three years from the date of treatment, set in the 2020 state budget in the Civil Practice Law and Rules. And since April 2022, interest on a consumer debt judgment, which includes medical debt, is capped at 2% a year, down from 9%.

A lawsuit that arrives anyway is not self-enforcing. It has to be answered by its deadline, and the defenses above go in the answer. That is the point at which free legal services stop being optional; New York City funds them, and “medical debt” plus “I have been served” moves a case up an intake queue.

Wages and homes: off limits since 2022

On November 23, 2022 the governor signed a law barring hospitals and health care professionals from collecting on a medical debt judgment by garnishing wages or placing a lien on the patient’s primary residence. It took effect immediately. The Community Service Society had documented thousands of home liens and wage garnishments by New York hospitals in the years before; those tools are gone for medical debt.

The law is prospective. A lien recorded before November 2022 was not automatically lifted, which is one of the fact-specific situations where a legal services lawyer earns their keep.

Credit reports: the state law and the federal fight

The Fair Medical Debt Reporting Act took effect on December 13, 2023. It bars hospitals, licensed health care professionals and ambulance services from reporting medical debt to consumer reporting agencies, requires their contracts with collection agencies and debt buyers to forbid it, and declares any medical debt furnished in violation to be void. Medical debt charged to an ordinary credit card is not protected, which is one more reason never to move a hospital bill onto a card.

In July 2025 a federal court vacated a federal rule that would have kept medical debt off credit reports nationwide, and said in passing that federal law preempts state laws on the same subject. The federal consumer bureau issued an interpretive rule in October 2025 agreeing. New York’s law was not struck down and remains on the books, but its enforceability is contested. What that means in practice, and the credit bureaus’ own voluntary rules, are on the credit report page.

Collectors: who regulates them

Collection agencies operating in New York State are regulated by the Department of Financial Services, and New York City separately licenses debt collectors through the Department of Consumer and Worker Protection, reachable through 311. Federal law adds the right to written validation of a debt and limits on harassment, contact hours and contacting your employer.

The procedural core does not change with the venue: validate in writing, apply to the hospital for financial assistance regardless of where the account sits, and answer any court paper by its deadline. What a collector can and cannot do, and the letter to send first.

Where these laws stop

They bind hospitals and health care providers in New York. A bill from an out-of-state hospital follows that state’s rules. A physician group’s own bill is covered by the garnishment, time limit, interest and credit reporting rules but not by the hospital financial assistance tiers, though most groups negotiate. And none of this erases a debt on its own: each protection has to be invoked, in writing, by the person who holds it.