There are several reasons why hospitals and clinics in New York and across the country are experiencing financial challenges, including rising costs, inadequate reimbursement rates from insurance companies, and a high number of unpaid medical bills.
To help individuals cope with medical bills, Andrew Mark Cuomo, the former governor of New York, reduced the number of years a medical provider has to collect unpaid bills by half, from six to three years.
In recent weeks, the state imposed new legislation adding additional restrictions on collecting medical debt by restricting wage garnishment on judgments resulting from medical charges and prohibiting entering or enforcing liens on homes for medical bills.
While this may seem like a positive step, it may ultimately end up hurting both hospitals and patients. Here is why: when hospitals and clinics cannot collect unpaid medical bills, they may be forced to raise prices to compensate for the lost revenue. Consequently, this leads to higher healthcare costs, making it more difficult for patients to afford the care they need.
In addition, hospitals and medical clinics may be forced to cut back on staffing or reduce the services they offer to stay financially viable. Thus, this leads to longer wait times and reduced patient care access.
Having the statute of limitations shortened has also made medical professionals increasingly eager to be paid in full upfront. In addition, the fact that these providers have little time on their hands makes it necessary for them to send unpaid bills to medical debt collection agencies sooner rather than later.
Overall, the financial challenges hospitals and medical clinics face in New York and across the country are complex and multifaceted. While the governor's efforts to limit medical debt recovery seem like a good idea, they have already backfired. Instead, a more comprehensive approach is needed to address the underlying financial challenges patients and critical healthcare providers face.
