The state of New York Enacted SB7506-B, which reduces the statute of limitations for medical debts from six to three years.
The state of New York recently enacted SB7506-B, which added Section 213(d) to the N.Y. Civil Practice Law and Rules to reduce the applicable statute of limitations from six years to three years for any "action on a medical debt by a hospital licensed under Article 28 of the Public Health Law or a health care professional authorized under Title Eight of the Education Law."
The bill is effective immediately, and though the legislation is silent on whether the measure is prospective or retroactive, a review of relevant case law indicates that the three year limitations period will likely be deemed to apply to all claims accrued (i.e., debts for medical treatment provided) on or after April 3, 2020.
Case Law Analysis
Case law has determined that "[f]ederal courts addressing the issue, while disagreeing as to whether the legislature intended the 1996 amendment of [a different limitations period] to apply retroactively, have nonetheless found that it should be applied only prospectively." See Bovi v. United Parcel Serv., Inc., 992 F. Supp. 540, 543 (E.D.N.Y. 1997) citing FDIC v. Pelletreau & Pelletreau, 965 F. Supp. 381, 386 (E.D.N.Y.1997) ("1996 amendment should not be applied retroactively"); Mason Tenders District Council Pension Fund v. Messera, 958 F. Supp. 869 (S.D.N.Y.1997) (applying the six-year statute of limitations to malpractice claims); Durkin v. Shea, 957 F. Supp. 1360 (S.D.N.Y.1997) (finding that no clear legislative intent that amendment should apply retroactively and that amendment should not apply to previously commenced case); Estate of Re v. Kornstein Veisz & Wexler, 958 F. Supp. 907 (S.D.N.Y.1997) (finding legislature intended amendment to apply retroactively but that it could not apply in case where it would extinguish claim filed within limitations period then applicable).
Additionlly, case law has found that "N.Y. Stat. Law § 51 provides that statutes are generally construed as prospective unless the language of the statute expressly or by necessary implication requires that it be given a retroactive construction. A statute is retroactive, under § 51 if it takes away or impairs vested rights, affecting acts occurring or rights accruing before the law came into force." See Bovi v. United Parcel Serv., Inc., 992 F. Supp. 540, 543 (E.D.N.Y. 1997).
The New York State Collectors Association was intimately involved in advocating for industry priorities throughout the several months long budget process and was successful in amending and removing numerous provision that would have impacted the accounts receivable management industry. The original version of the budget bill that was expected to be voted on did not include the statute of limitations provisions. However, in the final hours of the voting session, which was being done remotely due to the COVID-19 response, the provision was inserted and passed.
ACA will update relevant SearchPoint documents to reflect the new limitations period and will notify ACA members when the documents are available for review. For more information, members should review Section 606(4) of New York SB7506-B and consult with their own legal counsel.