Press Release
CSS Report Highlights Practice of State-Run Hospitals Suing Patients Likely Eligible for Hospital Financial Assistance
Bill pending in Albany would prohibit all state-run hospitals from suing patients for medical debt
A new Community Service Society of New York (CSS) report on the medical debt collection practices of state-run hospitals in New York found that the five hospitals were responsible for more that 80 percent of all medical debt lawsuits brought in New York in 2023. In nearly all of the cases, the report found that patients who were sued were likely eligible for financial assistance under the State Hospital Financial Assistance Law (HFAL). And more than a third of the lawsuits were filed against patients living in zip codes where residents are disproportionately people of color.
The report follows a series of CSS “Discharged into Debt” reports, issued from 2019 to 2022, that examined the pervasiveness of predatory debt collection practices deployed by many of the state’s 213 non-profit hospitals. Turning the focus to the five state-run hospitals, the new report revealed that these hospitals actually accelerated lawsuits against patients from 2020 to 2023, while medical debt lawsuits by New York’s nonprofit hospitals significantly declined over the same period.
State-run hospitals appear to provide less financial assistance to their patients than their non-profit peers, despite receiving over $530 million in Disproportionate Share Hospital Funding to offset their uncompensated care losses. In addition, SUNY Downstate received another $100 million as part of the FY25 State budget. The hospitals and representatives of the New York Attorney General’s Office indicate that a Division of Budget Memorandum requires them to sue patients with past due medical debts. However, this Memorandum fails to mention or describe the need for hospitals to comply with the HFAL. Indeed, the report argues that state-run hospitals are potentially pursuing lawsuits in lieu of offering financial assistance to their patients. These lawsuits—which ruin patients’ lives—have a negligible impact on the hospitals’ operating margins: even if they prevailed in every case, the proceeds would be less than 1 percent of their annual revenues.
There is an abundance of research underscoring the adverse impacts of medical debt on patients’ fiscal and physical health. Low-income people and people of color are disproportionately impacted by medical debt, often resulting in patients delaying or forgoing health care entirely because of costs. Some of the research has found correlations between medical debt and higher mortality rates, sub-par quality of care and housing insecurity.
The new CSS report, co-authored by CSS Health Policy Manager Mia Wagner, CSS Senior Department Administration for Health Initiatives Marielle Ray, and CSS Vice President of Health Initiatives Elisabeth Benjamin, analyzed the medical debt lawsuits brought by two of the five state-run hospitals: Roswell Park Comprehensive Cancer Center in Buffalo and SUNY Upstate Medical University in Syracuse. Among some of the report findings were:.
- The five State-run hospitals were responsible for more than 80 percent of all medical debt lawsuits brought in New York in 2023, reflecting the simultaneous acceleration of lawsuits brought by State-run facilities and decline in those brought by their 213 public and non-profit counterparts.
- Nearly all cases were filed against patients who were likely eligible for financial assistance under the State Hospital Financial Assistance Law.
86 percent of Roswell medical debt lawsuits were filed against patients who lived in zip codes where the median income was under 300 percent of the FPL.
79 percent of SUNY Upstate medical debt lawsuits were filed against patients who lived in zip codes where the median income was under 300 percent of the FPL.
- Over a third of cases were filed against patients who lived in zip codes where residents are disproportionately people of color, potentially contributing to driving the significant racial disparities in medical debt in Erie County and Onondaga County.
36 percent of Roswell medical debt lawsuits were filed against patients who reside in zip codes with higher number of residents of color when compared to the county average.
48 percent of SUNY Upstate medical debt lawsuits were filed against patients who reside in zip codes with higher number of residents of color when compared to the county average.
- Both hospitals processed a smaller number of applications (8 and 3 for Roswell and SUNY Upstate, respectively) for financial assistance per bed than the average of all hospitals in New York, which was 31 applications per bed, suggesting that they are precipitously suing patients in lieu of offering financial assistance.
The authors of the report analyzed the publicly available database of the New York State Unified Court System to identify medical debt lawsuits filed by the New York State Attorney General’s office on behalf of state-run hospitals between 2019 and 2023. In all, 16,466 lawsuits were filed during this time period by the following hospitals: Stony Brook University Hospital (9,064), SUNY Upstate Medical University (6,397), Rosewell Park Comprehensive Care Center (660), University Hospital at Downstate (250), and Helen Hayes Hospital (95).
The CSS report comes as Albany lawmakers are considering legislation (A.8170/S.7778) that would ban state-run hospitals from suing patients for medical debt. As part of the FY25 state budget agreement, nonprofit hospitals are now banned from suing patients with incomes below 400 percent of the federal poverty level. The law goes into effect in October.
“I am thankful to CSS for releasing a report on the pervasive medical debt collection practices among state run hospitals and for highlighting my bill, S.7778, as a measure to counteract these shameful actions,” said State Senator Gustavo Rivera, Chair of the Senate Health Committee and prime sponsor of the bill. "We have made significant progress in our efforts to eliminate medical debt in New York including the passage of another measure in this budget to reform the Hospital Financial Assistance Law. I will continue working diligently with partners like CSS to eradicate medical debt from our State once for all.”
“My legislation would stop this practice,” said Assemblymember Amy Paulin, Chair of the Assembly Health Committee and prime sponsor of A.8170. “The State should not be suing residents to pay for hospital care that is often unexpected."
“This new report underscores what our research has consistently shown. Namely, that medical debt cases are overwhelmingly brought against low-income, people of color,” said David R. Jones, President and CEO of the Community Service Society of New York. “Besides causing financial harm, these lawsuits are not significant income generators for hospitals. In fact, our research found that they represent a tiny fraction of hospital revenue in contrast to the hundreds of millions of dollars they receive for uncompensated care. It’s time to end this practice and require all hospitals to comply with the Hospital Financial Assistance Law.”
“The state-run hospitals’ indiscriminate filing of medical debt lawsuits against people who are poor and/or people of color must stop,” said Elisabeth Benjamin, VP of Health Initiatives at the Community Service Society of New York. “The proceeds, which wipe out a patients’ fiscal security, are negligible relative to the hospitals’ annual revenues.”