Patient Debt Relief Act

Summary

Requires hospitals that participate in Medicare to adopt written financial-assistance policies, screen patients for charity eligibility, delay collections while eligibility is determined, and follow new limits on medical-debt collection (including bans on liens on primary residences and wage garnishment). Establishes civil monetary penalties for noncompliant hospitals and creates a HHS grant program to fund a nonprofit to identify, buy, and discharge medical debt, with $100 million authorized for FY2027.

• Makes new hospital financial-assistance and debt-collection rules a condition of Medicare participation starting Jan 1, 2028.
• Requires written charity-care policies, public minimum eligibility criteria, screening, appeals, and a delay of collections until eligibility is determined.
• Prohibits liens on primary residences and wage garnishment to collect hospital medical debt; restricts sale or assignment of medical debt to collectors.
• Authorizes civil monetary penalties up to $1,000,000 per instance with a required notice (90 days) and cure period (45 days after notice).
• Creates a Medical Debt Relief Grant Program to fund one eligible nonprofit to acquire and discharge medical debt, with reporting and notification requirements.
• $100 million authorized for FY2027 for the grant program, available until expended.
• Defines eligible individuals by either medical debt ≥5% of MAGI or household income ≤400% of the federal poverty guideline.
• Grantee must notify individuals within 60 days after debt acquisition/discharge and report quarterly to HHS.
• Imposes administrative and compliance obligations on hospitals that could affect billing, collections, and front-end patient screening.
• Implementation details and exceptions (especially for sale/assignment of debt) depend on the complete statutory text and HHS rulemaking.