Another consumer protection law that was enacted as part of New York Governor Hochul’s Fiscal Year 2025 Budget regulates the use of credit cards for the payment of health care services. As of October 20, 2024, New York General Business Law Section 519-a will provide for the following:
To start with, the new law defines the term “credit card” as it is defined in General Business Law Section 511: "Credit card" means and includes any credit card, credit plate, charge plate, courtesy card, or other identification card or device issued by a person to another person which may be used to obtain a cash advance or a loan or credit or to purchase or lease property or services on the credit of the issuer or of the holder.”
Specifically, the new law establishes a prohibition on credit card pre-authorization as follows: “No hospital or health care provider shall require credit card pre-authorization nor require the patient to have a credit card on file prior to providing emergency or medically necessary medical services to such patient.”
Additionally, the new law requires that hospitals and health care providers shall notify all patients about the risks of paying for medical services with a credit card. Such a notification “shall highlight the fact that by using a credit card to pay for medical services, the patient is forgoing state and federal protections that regard medical debt.” The New York State Department of Health has the authority to set the requirements for the contents of such notices.
As a result of this new law, health care providers will need to adjust their billing and administrative processes and must develop and implement a system for notifying patients about the risks of using credit cards for medical payments. Substantive guidance from the New York State Department of Health has not been issued yet.
This Legal Briefing is intended for general informational and educational purposes only and should not be considered legal advice or counsel. The substance of this Legal Briefing is not intended to cover all legal issues or developments regarding the matter. Please consult with an attorney to ascertain how these new developments may relate to you or your business. © 2024 Law Offices of Pullano & Farrow PLLC