November 1, 2024 - Raquel Frier
New York State recently implemented significant changes to patient consent and payment laws that affect healthcare providers across the state. On October 20, 2024, new laws governing patient consent and payment procedures went into effect, prompting healthcare providers in New York to reassess their current practices. These changes, which are aimed at enhancing patient rights and financial transparency, introduce new requirements that impact how healthcare providers obtain patient consent, discuss costs for medical services, and process payments. As a result of these changes, healthcare providers face the challenge of adapting their policies and operations to ensure compliance. The following overview outlines key changes that providers need to be aware of to effectively comply with these new legal requirements.
Treatment and Payment Consents
The new Section 18-c of the Public Health Law requires that healthcare providers obtain patient consent for treatment, procedures, examinations, or other health care services separately from patient consent to pay for such services. This change forces providers to depart from the common practice of obtaining combined patient consent for treatment and payment. Further, Section 18-c stipulates that providers cannot seek patient consent for payment until two conditions are met: first, there must be a discussion about the costs of treatment, and second, the patient must have already received the healthcare services in question. To ensure compliance with this new law, providers may need to implement new patient consent protocols.
Ultimately, by mandating a cost discussion before payment consent, the law promotes price transparency and may help reduce instances of surprise billing. However, it also creates potential new challenges for healthcare providers, who must now deliver services before securing payment consent.
Restrictions on Pre-Authorization and “Cards on File“
Section 519-a of the General Business Law introduces restrictions on healthcare providers’ billing practices. Specifically, it prohibits providers from mandating credit card preauthorization or requiring patients to keep a credit card “on file” as a prerequisite for receiving emergency or medically necessary services. As a result, this may lead to more conservative treatment approaches, as providers may be hesitant to perform procedures without upfront payment assurance.
New Patient Credit Card Notification Requirements
Section 519-a also requires that healthcare providers educate patients about the potential risks associated with using credit cards to pay for medical expenses. More specifically, providers must inform patients that they may lose certain state and federal protections related to medical debt when using credit cards. In anticipation of these legal changes, the New York State Department of Health issued guidance regarding the specific content of these patient notifications. Such guidance clarifies that patient notifications should include the following components: (i) medical bills paid by credit card are no longer considered medical debt; (ii) by paying with a credit card, patients are forgoing federal and state protections around medical debt; (iii) protections that patients must acknowledge forgoing include (a) prohibitions against wage garnishment and property liens, (b) prohibition against reporting medical debt to credit bureaus, and (c) limitations on interest rates; and (iv) patients must affirmatively acknowledge forgoing these protections by paying with a credit card.
Limitations on Provider Involvement in Medical Credit Applications & Prohibition on Assisting with Credit Card/Loan Applications
Pursuant to Section 349-g of the General Business Law, providers can no longer complete any portion of a patient’s application for medical credit cards and third-party medical installment loans or otherwise arrange for an application that is not completely filled out by the patient. This restriction may significantly impact how healthcare facilities assist patients in managing their medical expenses.
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These new statutes likely require changes to previously existing workflows and documentation processes among health care providers in New York. In order to ensure compliance with these legal changes, health care providers should audit their consent forms and payment processes, and stay informed about additional anticipated forthcoming guidance. AEL is continuing to monitor these legal changes. If you have any questions, please reach out to us and we will be happy to assist.