Patient Debt Relief Act

Key Points

• Hospitals would be banned from taking extreme measures to collect medical bills, such as placing liens on homes or garnishing wages. These rules would apply to all hospitals that accept Medicare starting in 2028.
• Hospitals must screen patients for financial assistance before trying to collect payment. For families earning less than 250% of the poverty level, hospitals would be prohibited from charging interest or selling the debt to outside collection agencies.
• The bill creates a $100 million grant program for a nonprofit organization to buy up and forgive medical debt for people whose bills are more than 5% of their income or who earn less than 400% of the poverty line.
• Hospitals would have to offer repayment plans where monthly payments are capped at 4% of a person's monthly income. They also cannot sell a patient's debt to a collector until at least one year after the bill was due.
• To ensure hospitals follow these rules, the government would conduct annual audits and set up an online portal where patients can report unfair collection practices. Hospitals that break the rules could face fines up to $1 million.