April 6, 2020: On April 3, 2020, Governor Andrew M. Cuomo signed the Fiscal Year 2021 Enacted Budget. True to form, like other state fiscal year budgets, New York’s was replete with amendments to existing laws, and in some instances created new laws. One amendment included in the bill, of particular interest to members of RMAI, was contained in SB 7506-B/AB 9506-B on page 318, lines 15-21.

The new section provides:

Part YY § 4.  The civil practice law and rules is amended by adding a new section 213-d to read as follows:

§ 213-d. Actions to be commenced within three years; medical debt.  An action on a medical debt by a hospital licensed under article twenty-eight of the public health law or a health care professional authorized under title eight of the education law shall be commenced within three years of treatment. (hyperlinks added for your convenience)

The amendment took effect immediately on April 3, 2020, upon the bill’s signing by Governor Cuomo.

So what does this mean? RMAI urges caution in the interpretation of this new law. One reading of this text would seem to suggest it only applies to New York licensed hospitals and New York licensed health care professionals (e.g. “An action on a medical debt by a hospital . . . or a health care professional . . .” (emphasis added). However, some could construe the language to include the assignee of such entities. It would have been clearer if the text read “originated by” rather than the way it was worded. Members who purchase medical debt from, or sell medical debt owed to, New York licensed hospitals and New York licensed health care professionals should consider this limitation:

  • when placing a value on portfolios that include this type of debt;
  • when determining the workflow applicable to this type of debt; and
  • when determining how long they wish to hold the debt prior to commencing legal action or reselling the debt.

RMAI encourages those businesses that purchase New York originated medical debt or have New York originated medical debt in their existing portfolio to consult with independent legal counsel. In addition to other documentation required upon purchasing medical debt in accordance with RMAI Certification Standard B1, members would be well advised to require the date of treatment associated with the medical debt in order to accurately calculate this three-year statute of limitation.

Visit the RMAI COVID-19 resource page on the RMAI website to access other legislative and regulatory guidance and relevant information.

This alert is intended for members of the Receivables Management Association International and is for informational purposes only and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.