Medical Debt on Your Credit Report in New York: Why It Should Not Be There and What to Do

If a hospital bill, an ambulance charge, or a collection account from a medical provider is sitting on your credit report and you live in New York, there is a good chance it should not be there at all. Since December 13, 2023, New York's Fair Medical Debt Reporting Act has barred New York medical providers from sending medical debt to the credit bureaus and barred the bureaus from reporting it. Yet medical debt still shows up on New Yorkers' credit reports, sometimes because a furnisher ignored the law, sometimes because a particular debt falls into one of the law's gaps. This article explains what the law covers, what it does not, the federal fight swirling around it, and the dispute steps that may get the account removed.

The scale of the problem explains why the legislature acted. A Peterson-KFF analysis estimated that Americans owed roughly $220 billion in medical debt as of the end of 2021. In New York, an Urban Institute study found that about 6 percent of consumers with a credit record, roughly 740,000 adults, had medical debt in collections on their credit reports as of February 2022, ranging from about 3 percent on Long Island to about 14 percent in Central New York. Those figures describe the landscape before New York's reporting ban and before the credit bureaus' own policy changes took effect.

What the Fair Medical Debt Reporting Act Does

The Fair Medical Debt Reporting Act, passed as S.4907-A/A.6275-A, was signed on December 13, 2023, became Chapter 727 of the Laws of 2023, and took effect immediately. A cleanup bill, A.9438, signed on November 22, 2024 as Chapter 514 of the Laws of 2024, refined the statute retroactively to the original December 13, 2023 effective date. The Act attacks the problem from both ends of the reporting pipeline.

On the provider side, a new Article 49-A of the Public Health Law (Sections 4925 through 4927) provides at PHL § 4926 that covered providers "shall not furnish any portion of a medical debt to a consumer reporting agency." The covered providers are hospitals licensed under Article 28 of the Public Health Law, health care professionals authorized under Title 8 of the Education Law, and ambulance services operating under Article 30 of the Public Health Law. Covered providers must also include terms in their contracts with collection entities barring those entities from reporting the debt, so a provider cannot launder the reporting through its collection agency.

On the bureau side, amendments to New York's credit reporting statute do the mirror-image work. GBL § 380-j(a)(3) prohibits a consumer reporting agency from reporting or maintaining information relative to a medical debt, and GBL § 380-j(f)(1)(viii) bars consumer reports containing "information relating to a medical debt regardless of the date it was incurred." Unlike the obsolescence rules that age ordinary negative information off a report after a set number of years, this is a flat ban with no time component. Old medical debt, new medical debt, paid or unpaid: under New York law, none of it belongs on a New York consumer's credit report.

What Counts as Medical Debt, and the Credit Card Trap

The protection is only as broad as the definition. Under GBL § 380-a(v), medical debt means an obligation for health care services, products, or devices provided by the three categories of providers described above. The definition contains one carve-out that matters enormously in practice: "Medical debt does not include debt charged to a credit card unless the credit card is issued under an open-ended or closed-ended plan offered specifically for the payment of health care services, products, or devices."

The practical consequences are stark. If you pay an emergency room bill with an ordinary general-purpose credit card, that balance becomes ordinary credit card debt the moment the charge posts. If the card later goes delinquent, the resulting collection account may lawfully appear on your credit report, because it is no longer medical debt in the statute's eyes. By contrast, a balance on a medical-only financing card, the kind offered at a provider's front desk specifically for health care charges, stays within the definition and remains protected. Two other boundary issues are worth flagging: debt owed to providers that do not fit the three statutory categories, including some out-of-state providers, may fall outside the definition, and how courts will treat some edge cases is not yet settled. Anyone deciding how to pay a large medical bill should understand that putting it on a regular credit card may convert protected debt into reportable debt.

Reported Anyway? The Statute Says the Furnished Portion Is Void

The statute carries a remarkable enforcement mechanism. PHL § 4927 provides: "Any portion of a medical debt that is furnished to a consumer reporting agency shall be void." Read plainly, a provider or collector that reports a medical debt to a credit bureau does not just violate the reporting ban. It risks extinguishing the underlying debt itself.

That voiding provision feeds a second argument that consumer attorneys are now making. If state law has voided a debt, a credit report tradeline showing a balance owed on that debt arguably misstates the consumer's legal obligation, which would make the tradeline inaccurate for purposes of the federal Fair Credit Reporting Act and its accuracy and reinvestigation provisions. Second Circuit precedent in another FCRA accuracy case suggests that a dispute does not fail at the threshold merely because resolving it involves a legal question rather than a purely factual one. To be clear, no court has yet ruled on this void-debt theory under New York's medical debt law, so it should be understood as an argument, not settled law. The New York Attorney General's own guidance is candid on this point, cautioning that "some provisions of the FMDRA may be interpreted in different ways. New York courts have not issued any decisions that clarify how to interpret those provisions."

The Federal Picture: Voluntary Bureau Changes and a Vacated Rule

New York's statute sits on top of a set of voluntary changes the three national credit bureaus made on their own. Effective July 1, 2022, Equifax, Experian, and TransUnion stopped reporting paid medical collections. Effective April 11, 2023, they removed medical collections under $500. They also extended the waiting period before a new medical collection can appear from six months to one year. Together, these changes removed roughly 70 percent of medical collection tradelines from consumer reports. But the limits matter: the changes are voluntary policies that the bureaus could reverse at any time, and they apply only to collection tradelines at the big three bureaus. They are not law.

A federal ban almost happened, and then it did not. On January 7, 2025, the CFPB finalized a rule under Regulation V that would have prohibited medical debt on credit reports nationwide. On July 11, 2025, the United States District Court for the Eastern District of Texas vacated the rule in Cornerstone Credit Union League v. CFPB, granting a joint motion filed by the CFPB itself together with the industry plaintiffs, over the opposition of consumer intervenors. The rule remains vacated, with no appeal reflected as of June 2026. The upshot is simple: there is no federal ban on medical debt reporting today. State laws are what stand between medical debt and consumers' credit reports, and more than a dozen states have enacted some form of medical debt reporting restriction.

Is New York's Law Preempted? Where Things Stand as of June 2026

Because this is attorney advertising and not cheerleading, the open legal question deserves a straight answer. On October 28, 2025, the CFPB published an interpretive rule titled "Fair Credit Reporting Act; Preemption of State Laws," 90 FR 48710, asserting that the FCRA preempts state laws that ban entire categories of information, such as medical debt, from credit reports. If that view ultimately prevailed in court, it would threaten laws like New York's.

Several things should be kept in mind as of June 2026. First, the interpretive rule is non-binding by its own terms. The CFPB itself wrote: "As guidance, this interpretive rule does not have the force or effect of law." The rule concedes that parties remain free to litigate the question. Second, the rule acknowledges contrary circuit precedent, including Galper v. JP Morgan Chase Bank, N.A., 802 F.3d 437, 446 (2d Cir. 2015), in which the Second Circuit, the federal appeals court that covers New York, read FCRA preemption of state credit reporting laws narrowly. Third, no court has ruled on whether the FCRA preempts New York's medical debt law. The Texas decision that vacated the federal rule did include language suggesting that state laws barring medical debt reporting would be preempted, but that statement was made without any state law before the court and is not binding on courts in New York. An industry test case, ACA International v. Fulford, No. 1:25-cv-03530 (D. Colo., filed November 5, 2025), challenges Colorado's similar law, but that case had produced no merits ruling as of June 2026, and there is no reported challenge to New York's law as of this writing. Fourth, New York's law remains in effect and is actively enforced and publicized by the New York Attorney General, whose consumer guidance on medical debt reporting was updated as recently as May 2026.

The practical takeaway does not depend on how the preemption fight ends. A New York consumer with medical debt on a credit report can dispute it right now under both New York law and the FCRA's accuracy provisions, because the dispute mechanics are the same either way.

Other New York Protections Against Medical Debt

The reporting ban is one piece of a broader package New York has built around medical debt. CPLR § 213-d sets a short statute of limitations for medical debt lawsuits: an 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 8 of the Education Law "shall be commenced within three years of treatment." A 2022 law, Chapter 648 of the Laws of 2022, bars hospitals and health care professionals that obtain medical debt judgments from garnishing the patient's wages or placing a lien on the patient's primary residence. And New York expanded hospital financial assistance requirements in the FY2025 state budget, broadening the pool of patients who can seek discounted care. A consumer facing a medical collection in New York should keep all of these protections in view, not just the credit reporting ban.

How to Get Medical Debt Off Your Credit Report

The New York Attorney General's guidance states that the bureaus "cannot place or maintain any information about a medical debt on your credit report" and advises consumers to dispute incorrectly reported medical debt. The dispute process that preserves the full range of federal remedies runs through the credit bureaus:

• Pull all three credit reports. Medical debt may appear at one bureau and not another, so check Equifax, Experian, and TransUnion separately.
• Send a written dispute to each bureau reporting the account. Identify the tradeline, state that it is a medical debt barred from New York consumer reports, and include supporting documents such as the medical bill or collection letter showing the provider. Under 15 U.S.C. § 1681i, the bureau must conduct a reasonable reinvestigation, free of charge, generally within 30 days, and must delete information that is inaccurate or cannot be verified.
• Route the dispute through the bureau, not only the furnisher. A dispute sent to the credit bureau triggers the furnisher's own investigation duties under 15 U.S.C. § 1681s-2(b). The FCRA gives consumers a private claim against a furnisher only for failures of those post-dispute duties, which arise when the dispute comes through the bureau. Writing the provider or collector directly can be useful, but it is not a substitute.
• Complain to the New York Attorney General if the debt is not removed. The AG's office enforces the Fair Medical Debt Reporting Act and maintains a consumer helpline at 1-800-771-7755.
• Keep everything. Dispute letters, certified mail receipts, bureau responses, and copies of each report are the evidentiary foundation for any later FCRA claim.

What You May Recover If the Error Is Not Fixed

The FCRA requires consumer reporting agencies to follow reasonable procedures to assure "maximum possible accuracy" of the information in consumer reports under 15 U.S.C. § 1681e(b), and it bars furnishers from reporting information they know to be inaccurate under 15 U.S.C. § 1681s-2(a). When a bureau or furnisher mishandles a medical debt dispute, the consumer may be entitled to damages. For willful violations, 15 U.S.C. § 1681n may support statutory damages of $100 to $1,000, punitive damages, and attorney's fees. For negligent violations, 15 U.S.C. § 1681o may support actual damages, such as a credit denial or a higher interest rate traceable to the erroneous tradeline, plus attorney's fees. The fee-shifting provisions mean most consumer protection attorneys handle these cases with no out-of-pocket cost to the client. No outcome can be promised in any particular case; every claim turns on its own facts.

At Rausa Russo Law, we represent New York consumers in credit reporting disputes, including medical debt that appears on a report despite the Fair Medical Debt Reporting Act. For the mechanics of the dispute process itself, see our article on how to dispute credit report errors. If you already disputed and the bureau claimed the account was verified, see our article on what to do when a dispute comes back verified. Consultations are free and most consumer protection cases are handled at no out-of-pocket cost.