HR7478-119

What This Bill Does

The bill adds hospital financial assistance and debt collection rules to Medicare conditions of participation beginning January 1, 2028. Hospitals must publish charity-care eligibility, screen patients for assistance, decide applications at least 30 days before payment is due, allow appeals, and stop collection until eligibility is decided. Hospitals may not use liens, home foreclosure, or wage garnishment, and medical debt generally cannot be sold until more than one year has passed and a repayment program capped at 4 percent of gross monthly income has failed. Separately, HHS would award up to one nonprofit a $100 million FY2027 grant to identify eligible people and buy and discharge medical debt.

Who Benefits and How

Patients with medical debt, low-income hospital patients, homeowners, workers facing wage garnishment, and eligible individuals below 400 percent of poverty or with medical debt above 5 percent of modified adjusted gross income benefit from new limits on aggressive collections and a federal debt-discharge grant. Nonprofit medical debt relief organizations benefit from eligibility for a large HHS grant. CMS and patients benefit from a complaint portal and annual random hospital audits that make compliance visible.

Who Bears the Burden and How

Medicare participating hospitals must create or revise charity-care policies, screen patients, include assistance information with bills, delay collections during determinations, offer appeals, avoid liens and wage garnishment, limit debt sales, and comply with audits beginning in 2029. Debt collectors must honor lien and garnishment limits on purchased hospital debt. HHS and CMS must build the complaint portal by January 1, 2028, audit hospitals annually, enforce penalties up to $1 million per instance, define medical debt for the grant program, award and oversee the nonprofit grant, and collect quarterly reports.

Key Provisions

• Requires Medicare participating hospitals to follow financial-assistance and medical-debt collection rules beginning January 1, 2028.
• Bars hospitals from using liens, home foreclosure, or wage garnishment to collect covered medical debt.
• Limits medical debt sales unless one year has elapsed and a repayment program capped at 4 percent of gross monthly income has failed.
• Authorizes civil monetary penalties up to $1 million per noncompliance instance after notice and a 45-day correction window.
• Creates a $100 million FY2027 HHS grant for one nonprofit to acquire and discharge eligible medical debt.