Nonprofit New York hospitals keep suing patients for their wages. Gov. Kathy Hochul has a chance to end it

In New York, private nonprofit hospitals are going to extraordinary lengths to recover unpaid debts from their patients – including taking a chunk out of their wages.

Wage garnishment often affects low-wage workers, according to a new report released Wednesday by the Community Service Society of New York (CSS), a nonprofit that campaigns for consumer protections in health care. And the hospitals that engage in the practice don’t necessarily assess whether a patient qualifies for financial aid first, the report found.

Not all hospitals in New York go to the same lengths to pursue medical debts. According to the CSS, most of the state’s 212 nonprofit hospitals never or very rarely sue patients who are unable to afford care. But the organization found that 112 New York hospitals sued 53,182 patients in civil courts between 2015 and 2020, with lawsuits taking place in every county. The Bronx, Brooklyn, Manhattan and Queens were among the 15 counties most affected.

A bill that passed the state legislature in May would protect New Yorkers who fall into medical debt against both wage garnishment and having a lien placed on their homes — another extreme debt collection measure the Community Service Society examined in a separate report last November. The bill is now awaiting a signature from Governor Kathy Hochul.

“Inflation’s out of control. Wages don’t really go very far, especially for low-wage workers, and having a punishing 10% gross family wage garnishment is just a bridge too far for many people,” said Elisabeth Benjamin, vice president of health initiatives at CSS and one of the authors of the report.

The wage garnishment report highlights one instance involving Mather Hospital on Long Island. Run by Northwell Health, the largest private medical provider in the state, Mather Hospital targeted a CVS employee earning $500 a week and began deducting 10% of his earnings in August 2020, according to the report. The judgment on his case determined he owed the hospital more than $3,500, including interest.

In his response to the legal action taken by the hospital, the CVS employee noted that he had been making regular payments of $100 a month to pay off his debt but the hospital had stopped collecting the payments during the pandemic without any notice.

The same hospital began garnishing the wages of another patient in 2019 who wrote in her legal response that she was a single parent working at Toys R Us. “I cannot afford 10% of my salary,” she wrote, offering to pay the hospital $75 to $100 per month instead. She owed the hospital upwards of $5,000.

Northwell Health did not respond to a request for comment.

It’s unclear how frequently Northwell or other hospitals serving the New York City area resort to garnishing patients’ wages because CSS chose to focus on five upstate hospitals in “lawsuit hotspots” when analyzing how prevalent the practice is. But CSS noted that wage garnishment is not limited to one part of the state.

Analyzing a sample of 319 medical debt lawsuits that UHS Binghamton General Hospital brought against patients between 2015 and 2020, the report found that the hospital resorted to garnishing patients’ wages 46% of the time — the most of any hospital analyzed.

UHS Binghamton did not respond to a request for comment. Benjamin said nonprofit hospitals need to do more to ensure they are providing sufficient financial aid, rather resorting to lawsuits and wage garnishment — particularly since they receive funding from the state to provide charity care.

The report found that, among the patients whose wages were garnished by these upstate hospitals, the three most common sources of employment were in health care and social assistance (typically in low-wage sectors such as nursing homes and assisted living facilities), manufacturing and retail.

“We need to make sure that we protect folks’ livelihoods,” said State Senator Gustavo Rivera (D-Bronx), who was the primary sponsor of the bill protecting patients against wage garnishment and liens in his chamber.

Rivera sponsored a second bill awaiting Hochul’s signature that would protect patients from getting stuck with hidden “facility fees” that can jack up medical costs. Such fees are ostensibly meant to cover hospital overhead expenses but can also be tacked onto a bill for care that takes place in an outpatient clinic that happens to be owned by a hospital.

Rivera is also urging the state legislature to pass his single-payer bill, the New York Health Act. It would overhaul the current health insurance system in favor of a statewide public insurance program.

“The most important consumer protection of all would be to create a system in which people receive medical care just because they’re human beings and not having to do with whether they can afford it or not,” Rivera said.

In January 2021, following negative media attention, Northwell Health promised to press pause on the 2,500 lawsuits it was pursuing against patients for unpaid medical bills in 2020.

But in the past, the health system has defended its litigiousness.

“In the rare instances that Northwell Health takes legal action, it occurs only when a patient has been unresponsive to the multiple attempts made by Northwell Health to resolve the outstanding balance (including multiple offers for financial assistance, discounts and counseling) and the patient has a strong ability to pay the outstanding balance,” Northwell told Gothamist in March 2020.

Hochul’s office did not respond to a request for comment on the legislation addressing facility fees or the bill targeting wage garnishment and liens.

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