CSS Report Highlights the Practice of NY Hospitals Filing Liens on Patients’ Homes

A new report by the Community Service Society (CSS), “Discharged into Debt: Nonprofit Hospitals File Liens Against Patients’ Homes,” highlights how some hospitals secure liens against patients’ homes following a court-ordered medical debt judgement, contributing to housing insecurity and jeopardizing both the physical and fiscal health of their patients. The report is the fourth in a series examining the pervasiveness of predatory medical debt collection practices deployed by many nonprofit hospitals in New York. The median outstanding medical debt that triggers these lawsuits is only $1,900.

Using data self-reported by hospitals to the Department of Health, CSS found that 56 nonprofit hospitals in the state reported placing liens on 4,880 patients’ homes in 2017 and 2018, the most recent years for which data is available. Ironically, these 56 hospitals collected more than $442 million in state Indigent Care Pool (ICP) funds to support them in providing hospital financial assistance to patients as well as offset the costs associated with uncompensated care. Put another way, these 56 hospitals received an estimated 48 times more in ICP funds than they sought through court judgments followed by liens on patients’ homes. Most hospitals (133 of the 189 that submit data to the Department of Health) never placed liens on their patients’ homes at all.

This extreme collection practice predominately occurs outside of New York City. For example, 35 percent of all liens were placed on patients by hospitals located in the Capital District (St. Peter’s Health Partners, Albany Medical Center and Ellis Hospital).

For example, St. Peter’s Health Partners in Albany placed the most home liens (955) followed by Northwell Health (830). Together, these two systems accounted for nearly 40 percent of the liens hospitals placed in 2017 and 2018 (37 percent). CSS found that the practice of securing liens against patients’ homes is most widespread in hospitals based in 15 counties, where 100 or more liens were taken: Albany, Rensselaer, Broome, Fulton, Madison, Nassau, Schenectady, Otsego, Ulster, Schuyler, Saratoga, Onondaga, and Steuben. Liens are rarely imposed in the five boroughs of New York City, apart from Manhattan where 40 were taken.

Liens can affect a patient’s credit report and limit their ability to sell or refinance their homes. They can also complicate an individual’s ability to secure financing to purchase a car, vital for transportation in the areas where liens are a common practice because of their lack of public transportation or apply for a home equity loan. In recognition of the correlation between illness, medical debt, and housing insecurity, 10 states have laws on the books that bar the practice of placing liens on primary residences under any circumstances.

State Senator Gustavo Rivera and Assembly Member Richard Gottfried, the respective chairs of the Senate and Assembly health committees, have introduced S5622/A7363, a bill that would forbid New York’s nonprofit hospitals from engaging in the extraordinary collection practices of taking liens on patients’ homes in medical debt collection cases. The bill currently has 12 sponsors in the state legislature and would ban wage garnishment along with property liens stemming from medical debt.

"Putting liens on patients' homes for an average claim of $1,900 is outrageous," said Assembly Health Committee Chair and bill sponsor Richard Gottfried (Assembly District 75). "I appreciate that most hospitals don't do this, but too many do and too many people's finances are destroyed by it. I commend the Community Service Society for this comprehensive, disturbing report on a practice that keeps people from seeking necessary health care and punishes them when they do. It's time to stop this."

“New Yorkers should not fear financial ruin or losing the roof over their head for seeking the medical care they need. It is unconscionable that some hospital systems in our state still resort to filing liens against their patients' homes in order to collect on medical debt. This practice is detrimental to New Yorker's financial stability and physical health. I am committed to working with Assemblymember Gottfried, as well as the Community Service Society, to pass our bill next session so that this practice is eradicated once for all in New York State," said State Senator Gustavo Rivera (Senate District 33), Chairman of the Senate Health Committee.

"New Yorkers who are struggling with a health crisis have enough to worry about without having to fear that the hospital they've turned to for help might ruin their financial and housing security. Debt collection practices like these are positively medieval, and they have no place in our modern healthcare system,” said State Senator Liz Krueger (District 28).

“Our state invests billions of dollars into nonprofit hospitals to offset the costs of treating those who are unable to pay,” said State Senator Neil Breslin (Senate District 44). “Still, the data shows that these hospitals are putting thousands of patients’ homes in jeopardy by filing liens, in some cases for medical bills that amount to only a few thousand dollars. These kinds of predatory debt collection practices must end.”

“Health care is a fundamental human right, and no New Yorker should be deterred from seeking medical assistance for fear they will go into debt, or worse, lose their home,” said State Senator Michelle Hinchey (Senate District 46). “It is outrageous that a select few nonprofit institutions are resorting to filing liens on the homes of their patients and garnishing their hard-earned wages — extreme debt collection practices that disproportionately harm residents in our rural and upstate communities who already face existing health care inequities. I’m proud to co-sponsor legislation that will protect New Yorkers from these kinds of aggressive bill collection methods, and I will always fight for the fair and equitable health care system our residents need and deserve.”

Assemblymember Phil Steck (Assembly District 110) said, “Hospitals will tell you about how much they care about their patients. Liening property of unfortunate patients suffering during the covid pandemic is the antithesis of concern for patients."

Assemblymember John T. McDonald III (Assembly District 108) said, "Medical debt should not lead to a person losing their home. Taking a home from a person who is struggling with medical issues and working to pay those debts down will only lead to more difficulties and make it even harder for them to pay off the debt. By ensuring that a person's home is protected from a medical debt lien, a person who is struggling with health issues can work to get back on their feet. I am glad to co-sponsor this important legislation and thank Assembly Health Committee Chair Gottfried and Senate Health Committee Chair Rivera who are sponsoring this bill.”

“It’s wrong for nonprofit hospitals to hound their patients into debt through aggressive collection actions, lawsuits, liens and wage garnishments,” said Hazel N. Dukes, President of the NAACP New York State Conference. “These kinds of practices discourage people from seeking the medical services they need and deserve out of fear of falling into debt. We must protect vulnerable New Yorkers while urging reforms to the system so that all our hospitals – which are on the front lines battling this pandemic -- operate under the principle of protecting and serving its patients.”

“The good news is most hospitals do not resort to filing liens on patients’ homes,” said David R. Jones, President and CEO of the Community Service Society. “The bad news is the practice is common among certain hospital systems. These nonprofit, charitable hospitals must do a better job of complying with the state Hospital Financial Assistance law, by helping their patients deal with medical bills before they resort to extreme collection practices.”

“AARP New York supports this legislation because the indigent and uninsured should not have to fear losing their homes or wages as a result of onerous debt collection practices. This bill would also help disrupt disparities faced by New Yorkers of color, who are nearly twice as likely as white New Yorkers to have medical debt. Ten other states have already banned pursuit of debtors’ homes, and four states have prohibited pursuit of debtors’ wages. New York should join them,” said AARP New York’s State Director, Beth Finkel.

“We know that many moderate-income patients are unaware of hospital financial assistance and forego seeking medical care out of fear of being unable to afford it and falling into debt, said Elisabeth Benjamin, VP of Health Initiatives at the Community Service Society and co-author of the report. “Liens de-stabilize families and threaten their long-term economic security. Nonprofit  hospitals should be prohibited from taking liens on patients’ homes and instead should help patients with complex medical and insurance billing disputes and applications for financial assistance where there outstanding balances.” 

The “Discharged into Debt: New York’s Non-Profit Hospitals Seek Liens Against Patients’ Homes” report was co-authored by Elisabeth Benjamin and Amanda Dunker, CSS Director of Health Policy. It follows three previous reports on medical debt: “Discharged into Debt: New York’s Nonprofit Hospitals are Suing Patients,” which found that the hospitals who sue the most patients provide insufficient financial assistance and rely on professional debt collection law firms to go up against patients who are largely unrepresented; “Discharged into Debt: A Pandemic Update,” which documented that hospitals sued more than 5,300 patients for medical debt during the 10-month height of the COVID-19 pandemic when courts were effectively closed to patients; and, “Discharged into Debt: Racial Disparities and Medical Debt in Albany County,” which revealed how medical debt lawsuits disproportionately impact low-income communities of color. This report also described how these hospital judgements led to wage garnishments of low-wage workers, whose occupations in fast food, retail, and health care would typically render them eligible for financial assistance under New York State law.

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For more than 175 years, the Community Service Society of New York has been the leading voice on behalf of low-income New Yorkers and continues to advocate for the economic security of the working poor in the nation’s largest city. We respond to urgent, contemporary challenges with applied research, advocacy, litigation and innovative program models that help the working poor achieve a better quality of life and promote a more prosperous city. Visit us at www.cssny.org.

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