Card-on-File Policies for Patient Balances: What State Laws Require and What a Compliant Authorization Looks Like
Connecticut and New York now limit how medical practices can ask for, store, and charge a patient’s card. Here is how to check your own policy.
High-deductible health plans have changed what patients owe at the front desk. More of each bill lands on the patient after insurance pays, and many practices ask patients to keep a card on file so balances can be collected later. State lawmakers have started to set limits on that practice.
Connecticut and New York have adopted rules on how a card on file can be requested, stored, and used, and the other New England states have related medical debt laws. Even if you are not in these states, the rules make a useful checklist for your own patient payment policy.
Why card-on-file policies are under the microscope
Patient responsibility keeps growing. In an August 2026 MGMA Stat article, MGMA reported, citing KFF, that the average deductible among 2026 ACA Marketplace plan selections rose 37% to a record $3,786, up from $2,759 in 2025. The same article cites 2025 MGMA DataDive data showing practices collected about 72% of copayments at the time of service but only 26.83% of patient-due balances.
That gap makes a card on file tempting. But a stored card can be charged when the patient is not present, and the sponsor memo for a New York bill that has passed both houses describes its purpose as safeguarding card information from being stored and charged without the patient’s consent.
What Connecticut requires
Effective October 1, 2025, Connecticut Public Act 25-97, Section 4 says a health system or health care provider may not require a patient to provide bank account information, a credit card number, a debit card number, or any other form of electronic payment to be kept on file as a prerequisite to seeing the patient or providing any health care service.
Penalties. A violation is an unfair trade practice under Connecticut law. Law-firm summaries note penalties of up to $5,000.
The bill is still owed. The law does not change a patient’s obligation to pay for care.
Voluntary cards are allowed. A provider may request and store payment information if the patient agrees.
What New York requires
Two New York laws took effect on October 20, 2024, according to the National Law Review’s summary:
General Business Law § 519-a bars hospitals and providers from requiring credit card pre-authorization, or a card on file, before emergency or medically necessary services.
Risk notice. The same section requires providers to notify patients that paying by credit card means giving up state and federal medical-debt protections.
Public Health Law § 18-c requires consent to pay to be obtained separately from consent to treatment and, as described in that summary, only after the patient has received services and discussed costs. On October 18, 2024, the state Department of Health put implementation of this provision on hold pending further guidance.
Watch for changes The National Law Review noted significant ambiguities, including that the statute does not define "medically necessary." A separate bill (S2393/A8460) would require a patient’s signed written consent before a card is kept on file, plus a written notice in 12-point type or larger. It passed the Senate on April 22, 2026 and the Assembly on June 1, 2026. We could not confirm it became law, so check its status. |
New England state-by-state
Status is as of late October 2026, and bills change quickly, so confirm before you act. Connecticut is covered above.
State | Card on file | Related medical debt rules |
|---|---|---|
Massachusetts | No enacted law found. | A proposed DPH rule (105 CMR 95.00) would bar licensed providers from reporting medical debt to credit bureaus. New collection contracts from Jan 15, 2027 would need to prohibit reporting, and existing ones by Apr 15, 2027. Hearing held July 27, 2026; still proposed when we checked. |
Rhode Island | S.3090 would bar requiring a card on file as a prerequisite to care (voluntary cards allowed). Passed the Senate 38-0 on June 4, 2026; House outcome unconfirmed. | Since Jan 1, 2025, providers may not furnish medical debt to credit bureaus, and collection contracts must prohibit it (§ 6-60-2). P.L. 2025 ch. 300 (eff. Jan 1, 2026) bars wage garnishment, and executions or attachments against a principal residence, on medical-debt judgments. |
Vermont | No law found. | Act 21 (eff. July 1, 2025): credit bureaus may not report or keep medical debt (9 V.S.A. § 2466d). Large health care facilities and medical debt collectors may not report it (18 V.S.A. § 9485). A state program buys and forgives eligible debt. |
Maine | No enacted law found (LD 2174 died in 2024). | P.L. 2025 ch. 201 (eff. Sept 24, 2025): medical creditors, collectors, and debt buyers may not report medical debt to credit bureaus. P.L. 2024 ch. 663 (eff. Aug 9, 2024): no interest or fees on known medical debt; limits on suing lower-income consumers without notice. |
New Hampshire | No law found. | No state ban on reporting medical debt, and no 2026 enactment, found. Charitable trusts must post charity-care policies, and wage garnishment needs a new court order each pay period (Healthcare Value Hub, June 2025). Our coverage here is thinner, so confirm with counsel. |
Key risks for your practice
Risk | What it looks like |
|---|---|
⚠ Making a card mandatory | An intake form, script, or booking step that requires a card can be read as a prerequisite to care. |
⚠ Bundled consent | One form combining treatment and payment consent may conflict with New York’s separate-consent rule (on hold pending state guidance). |
⚠ Missing risk notice | New York expects patients to be told which medical-debt protections they give up by paying with a credit card. |
⚠ Unclear permission to charge | Charging amounts a patient did not expect invites disputes, complaints, and chargebacks. |
Key terms, defined
Term | Meaning |
|---|---|
Card on file | Payment card information stored by the practice or its processor to be charged later with the patient’s permission. |
Pre-authorization | A hold or approval request placed on a card before care is provided. |
Patient balance | What the patient owes after the insurer processes the claim: deductible, coinsurance, copay, or non-covered services. |
Condition of care | Something a patient must do before being seen. Connecticut bars making a stored payment method one. |
Consent to payment | The patient’s agreement to pay, kept separate from consent to treatment under New York law. |
What a compliant authorization looks like
We did not find a statute that supplies a template form. Treat these elements as practical guidance drawn from the laws above and common practice, and have your attorney review the final form.
Voluntary language. Say plainly that a card is a choice and care does not depend on it.
A separate document. Keep payment authorization apart from the treatment consent.
Clear scope. Say what may be charged, such as the balance after the insurer processes the claim, and how the patient is told first.
Risk notice. Where New York rules apply, include the required notice about medical-debt protections.
Signature, date, and a copy. Good practice, and what the pending New York bill would require.
A way to revoke. Explain how to remove the card and whom to contact.
Secure storage. Use a payment processor that meets industry security standards, not paper files or spreadsheets.
Step by step: how to review your policy
Collect every document and script that mentions a card. Check the intake packet, financial policy, patient portal, online scheduling, website, and telehealth forms, and look for wording that makes a card mandatory.
Separate treatment consent from payment consent. Use two documents, and decide when in the visit the payment consent is presented.
Add voluntary language and the risk notice. Make the card clearly optional and, where required, include the credit card risk notice.
Offer other ways to pay. Payment at the visit, portal payments, or a payment plan give patients who decline an easy path to settle balances.
Train the front desk. Try a short script: "Would you like to keep a card on file for your balance? It is optional, and you can choose another way to pay."
Document and revisit. Record each authorization, list the states where your patients live, and re-check requirements when laws change.
Why accuracy matters
Card-on-file policies sit where billing, compliance, and patient trust meet. A form that says "required" where the law says "optional" can create legal exposure, and a vague one can create patient disputes and write-offs. A clearly documented authorization gives your team something to point to if a charge is questioned. Because these rules keep changing, review the policy periodically.
Conclusion
Next step Card-on-file programs can still help collect patient balances, as long as the card is optional, the authorization is clear, and your process matches the law where your patients are. If you would like a second set of eyes on how patient balances flow through your billing process, the Streamline Billing Services team is happy to talk. |
About Streamline Billing Services: Streamline Billing Services is a full-service medical billing, credentialing, and revenue cycle management (RCM) partner for medical practices across New England and beyond. We care about your business, and we’re here to help you get paid accurately and on time.
This article is for educational purposes only and is not legal advice. Consult your attorney about your practice’s obligations.
Sources
Sources and image credits
Connecticut: Harris Beach Murtha, Connecticut health care providers cannot require credit cards on file (Oct 1, 2025); Public Act 25-97, Section 4
New York: National Law Review, New York New Healthcare Payment Laws (Oct 18, 2024); NY Senate, GBL § 519-a and Bill S2393; NY Department of Health, hospital financial assistance letter
Patient balances: MGMA Stat article (Aug 12, 2026)
Massachusetts: DPH proposed 105 CMR 95.00
Rhode Island: S 3090, P.L. 2024 ch. 225, P.L. 2025 ch. 300
Vermont: 9 V.S.A. § 2466d, 18 V.S.A. § 9485, State Treasurer program
Maine: P.L. 2025 ch. 201, P.L. 2024 ch. 663, Senate release on LD 2115, LD 2174 status
New Hampshire: Healthcare Value Hub, Medical Debt Prevention
Images: Kaboompics.com (cover), Pavel Danilyuk, SHVETS production, and Alexander Zvir via Pexels (Pexels license).
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