Introduced by Representatives Vasquez, Horsford, Ruiz, Thanedar, Schrier, and Barragan, this bill seeks to amend the Social Security Act and the Public Health Service Act with several thoughtfully curated provisions.
First and foremost, the bill mandates new standards for hospitals receiving Medicare payments, focusing on financial assistance and debt collection practices. Starting January 1, 2026, hospitals must comply with specific requirements to ensure they offer adequate financial assistance and follow fair debt collection procedures.
Under the new rules, hospitals are required to have in place a charity care or financial assistance policy, publicize minimum eligibility criteria, and actively screen patients to identify those who may qualify for such assistance. To prevent unnecessary financial strain, they must determine eligibility for assistance at least 30 days before payment is due and allow patients to appeal any negative decisions. Bills sent to patients must include detailed information about financial assistance policies and medical debt collection limitations.
Speaking of limitations, the bill introduces stringent rules on how hospitals can pursue collection of medical debt. Hospitals would be forbidden from placing liens on patients’ homes or garnishing wages to recover dues and could only sell or assign medical debt to collectors under strict conditions. Not surprisingly, hospitals must also ensure that debt collectors adhere to these rules.
An intriguing aspect of the bill is the establishment of a penalty system for non-compliant hospitals. The Secretary of Health and Human Services (HHS) has the authority to impose penalties up to $1,000,000 for each instance of non-compliance, providing a strong incentive for hospitals to follow the new regulations.
A novel feature is the creation of a “Medical Debt Relief Grant Program” under the Public Health Service Act. This program, administered by the Secretary of HHS, will award grants to a qualified nonprofit organization tasked with acquiring and discharging the medical debt of eligible individuals. Eligible nonprofits will identify individuals whose medical debt exceeds 5 percent of their income or who live with income not exceeding 400 percent of the poverty line. With authorized funding of $100,000,000 for fiscal year 2025, this program promises considerable relief to those burdened by medical expenses.
The bill looks to address not just the financial strain of medical debt but also brings transparency and fairness into hospital billing and debt collection processes. By setting high standards and holding hospitals accountable, it aims to ensure patients aren’t left grappling with insurmountable debt at their most vulnerable moments.
At its core, the Patient Debt Relief Act envisions a healthcare system where financial ruin isn’t the price for medical care. If passed, this bill could herald a new era of accountability and compassion in the medical field, significantly benefiting those who rely on Medicare. Furthermore, it positions the federal government as a watchdog over hospital practices, ensuring patients get the fair treatment and assistance they deserve.
In summary, this legislation commences a significant step towards alleviating the often-devastating impact of medical debt on American families. It tackles the root of the problem with a systematic approach, requiring stringent financial assistance policies, fair debt collection methods, and establishing a grant program that directly helps those in need. As it moves through the legislative process, eyes will be on how it navigates potential roadblocks and whether it secures the necessary support to become law.
Ultimately, the bill offers hope and tangible solutions for many, potentially transforming the landscape of medical debt in the United States. It stands as a testament to the ongoing effort to create a more equitable healthcare system, acknowledging the enormous pressure that medical expenses can exert on individuals and families alike.
