Patient Debt Relief Act

The Patient Debt Relief Act requires Medicare-participating hospitals to establish clear financial assistance policies by January 2026, including publicly available eligibility criteria and 30-day pre-payment screening for charity care. It prohibits hospitals from placing home liens, garnishing wages, or selling debt to collectors without offering income-based repayment plans (capping payments at 4% of gross monthly income) and eliminates interest for patients earning under 250% of the poverty line. Hospitals failing to comply face civil penalties up to $1 million per violation. The bill also creates a $100 million grant program to fund nonprofits that discharge medical debt for individuals meeting income thresholds (5% of income or under 400% of poverty line), with quarterly reporting requirements. These provisions apply directly to hospitals and low-income patients with medical debt.