New Consumer Protection Laws to Affect NY Healthcare Providers

On October 20, 2024, several significant consumer protection laws will go into effect, directly affecting healthcare providers throughout New York State. Introduced through the FY 2025 Executive Budget, these new laws reshape how providers must handle patient consent to pay for medical services and the use of credit cards for payment.

Separate Consent for Payment and Services (Public Health Law Section 18-C):

As outlined in the newly introduced Section 18-c of the Public Health Law, patient consent to treatment and patient consent to pay for medical services must be obtained separately. This new requirement may significantly affect providers who have been using a single, all-encompassing consent form to cover both treatment and payment as part of their patient intake process.

In addition, patient consent to pay for services cannot be obtained prior to the patient receiving services and discussing treatment costs with the provider. It remains unclear whether patients will need to provide a separate consent for each service or whether a single consent can cover multiple services or treatments. The New York Department of Health is expected to issue further guidance and clarification on how to comply with this new law.

Non-compliance with these consent requirements may result in significant penalties, including fines of $2,000 per violation.

Restrictions on Applications for Medical Financial Products (General Business Law Section 349-g):

The new Section 349-g of the General Business Law prohibits healthcare providers, as well as their employees or agents, from completing any part of a patient’s application for medical financial products, including third-party medical installment loans and medical credit cards that are issued specifically for the payment of healthcare services, products or devices. This restriction aims to ensure that patients complete the application process independently and that they do not enter into financial agreements that they may not fully understand or may feel pressured into.

While providers can still provide general financial information to the patient, such as brochures or educational materials, they must refrain from directly assisting the patient in filling out the application or otherwise arranging or establishing an application for a patient.

Violations of this provision can result in penalties of up to $5,000 per violation.

Restrictions on Credit Card Preauthorization (General Business Law Section 519-a):

The new Section 519-a of the General Business Law states that healthcare providers cannot require credit card preauthorization or that a patient keep a credit card on file with the provider before receiving emergency or medically necessary services.

While additional regulatory guidance is likely forthcoming, it is important to distinguish that, while this law prohibits providers from requiring patients to provide their credit cards before obtaining services, it does not per se prohibit providers from accepting credit cards to keep on file or for preauthorization purposes if the patient voluntarily provides a credit card to the provider.

Furthermore, under this new law, providers are also obligated to inform patients about the risks that may be associated with using credit cards to pay for medical services, particularly that the patient may forgo federal and state protections regarding medical debt.

Healthcare providers in New York should review their policies and procedures to ensure compliance with these changes. As further clarification from regulators is expected, providers should stay informed and consult legal counsel to ensure they meet all new legal requirements by the October 20th deadline.