NY Voids Medical Debt If Credit Reported

On December 13, New York Governor Kathy Hochul signed into law the Fair Medical Debt Reporting Act. This new law is effective immediately and prohibits the credit reporting of any medical debt in New York. And “any” means any – it is not just negative information; there can be no furnishing of any information regarding any medical debt in New York.

The prohibition applies to any “hospital licensed under article twenty-eight of this chapter, a health care professional authorized under title eight of the education law, or an ambulance service certified under article thirty of this chapter.” This means that the restriction includes medical provider, e.g., hospitals, New York licensed doctors, or dentists.

While the new prohibition is technically not targeted at collection agencies; the law prohibits medical providers from credit reporting medical debt. But, the new law extends to collection agencies, because the law will require medical providers to amend their contracts to prohibit third party debt collectors from credit reporting on their behalf.

If the debt is credit reported in violation of the restriction, New York now mandates that the debt “is void.” In other words, wrongly credit reporting a debt means the debt has been waived.

Last, the new law also instructs the credit reporting agencies that credit bureaus shall not “report or maintain in the file on a consumer "any information regarding a medical debt regardless of the date the debt was incurred. We believe this restriction means that the credit reporting agencies will delete any current reporting for any consumer with a New York address and will block any attempts to furnish information on medical debt going forward for anyone with a New York address, even though the prohibition applies to the medical provider’s, not the consumer’s location.

Confused as to how to be a proper furnisher and credit report? We are here to help.

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