Client Alert: New Time Limits for Collecting Medical Debt

By Nancy Levitin, Jeffrey Neuman and Svetlana Minevich

To Nursing Home Business Offices:

Before passage of the 2021 New York State Budget, medical debt did not receive special treatment under the law. This meant that, as nursing home collection attorneys, we faced the same time limits for filing our lawsuits as attorneys who sued to get their credit card company or car dealership clients paid.

As of April 3, 2020, a new time constraint went into effect that limits when a lawsuit can be filed to collect medical debt. By revising the law that governs the filing of lawsuits, which in New York State is called Civil Practice Law and Rules (CPLR), litigants will have only three (3) years from the date of treatment to collect payment. This represents a substantial reduction from the six (6) year statute of limitation that previously applied to these types of actions.

What does this mean for nursing home providers?

While debt always becomes more difficult to collect with time, it is now more imperative than ever that facilities institute procedures to regularly review their A/R ledgers. Every debt more than three (3) months out should be closely looked at both from the perspective of the need to secure a precautionary Medicaid pick up date and possibly refer for legal action.

A special caution applies when the facility suspects fraud. Uncovering evidence of impermissible transfers and unexplained withdrawals of the resident’s funds can be especially challenging, and securing the proof needed to sustain a cause of action under NYS Debtor-Creditor Law can be particularly time-consuming. Accordingly, attorneys need as much lead time as possible to build these cases for filing before the applicable statute of limitations runs out.

The Reimbursement and Recovery Department at Abrams Fensterman is always available to assist in reviewing ledgers, discuss accounts of concern, explore the Medicaid option, and work up cases for litigation and guardianship. Please do not hesitate to reach out and stay safe.

If you are a health care provider with specific concerns or questions about the above, feel free to contact Jeffrey Neuman, Esq., Svetlana Minevich, Esq., Nancy Levitin, Esq. or any Abrams Fensterman healthcare collection attorney at (516) 328-2300.