On April 3, New York Gov. Andrew M. Cuomo signed the State’s 2021 Executive Budget into law, which includes a provision shortening the time period for a lawsuit to be filed on medical debt to three years. Although budgetary constraints caused by the coronavirus (“COVID-19”) pandemic have forced the State to scrap numerous policy initiatives originally intended to be included in the 2021 budget, Gov. Cuomo – speaking at one of his now-daily “fireside chat” press briefings – nonetheless praised the State’s legislative and executive bodies for finding a way to include many new policy initiatives for the upcoming year.  

Among the initiatives included in the final budget was an amendment to New York’s statute of limitations for collecting medical debt. Effective immediately upon the bill’s signing, a new Section 213-d was added to New York’s Civil Practice Law and Rules, shortening the time for a hospital and/or healthcare professional to commence an action to collect on medical debt from six years to three years from the date of treatment.

The idea to shorten the statute of limitations on the collection of medical debt originally was proposed as part of the Patient Medical Debt Protection Act, which was introduced to the State’s legislature during October 2019. That bill, which seeks to reduce the growing number of medical debt recovery actions brought by hospitals and healthcare providers against patients, proposed reducing the statute of limitations for collecting medical debt to two years. By including the proposed reduction of the statute of limitations as part of the State’s 2021 budget, the Cuomo administration was able to ensure that the patient-protecting amendment was enacted prior to the conclusion of the 2020 legislative session.

While the new section 213-d expressly applies to medical debt collection actions brought “by a hospital…or healthcare provider,” it remains to be seen whether courts will apply the reduced statute of limitations to actions commenced by third parties seeking to collect medical debt as an assignee of the hospital/healthcare provider.