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New York hospitals can no longer place liens or garnish wages due to medical debt

This stock image shows the front entrance sign to a hospital's emergency room department.
Annette Shaff
Adobe Stock
In New York state, new legislation bars hospitals and medical providers from placing liens on patients’ homes or garnishing their wages.

(WSKG) — New York’s hospitals and medical providers can no longer place liens on patients’ homes, or garnish their wages, due to medical debt. Gov. Kathy Hochul signed legislation last week prohibiting those collection practices, effective immediately.

Before the legislation, hospitals and medical providers could put liens on patients’ homes or take up to 10% of their paychecks to collect on unpaid medical bills.

Elisabeth Benjamin is the vice president of health initiatives at Community Service Society, a New York advocacy and research group. She argues wage garnishment and liens are extreme ways of collecting on medical debt, and according to the group’s research, far too common.

“In our research, we had found that New York nonprofit hospitals had been taking thousands of liens on patients’ primary residences every year, and garnishing thousands of people’s wages,” Benjamin said.

According to the group, just 20 hospitals in 15 counties are responsible for 80 percent of New York’s medical debt cases.

Benjamin said because all hospitals in New York are nonprofit and receive funding from the state for uncompensated care, there’s no reason for such aggressive debt collection methods.

“We’re just saying, ‘Don’t do the most extreme, aggressive things to patients.’ If you put a lien on someone’s home, that is really ruining their credit. They can’t get a student loan, they can’t get a home loan, they can’t get a mortgage,” Benjamin said.

Last year, a Community Service Society report found that 56 hospitals across the state reported placing nearly 5,000 liens on patients’ homes in 2017 and 2018.

Another CSS report last July found that from 2015 to 2020, five of New York’s nonprofit hospitals garnished the wages of nearly 13,000 patients.