Patient Debt Relief Act

The Patient Debt Relief Act (HR 7478) requires Medicare-participating hospitals to implement new financial assistance and debt collection standards starting January 1, 2028. It prohibits hospitals from garnishing wages, placing home liens, or selling medical debt to collectors without offering income-based repayment plans (capping payments at 4% of monthly income) and providing clear eligibility information with bills. Hospitals failing to comply face civil penalties up to $1 million per violation, with annual audits and a public portal for patients to report noncompliance. The bill also creates a $100 million grant program to discharge medical debt for individuals meeting income thresholds (5% of income or household income ≤400% of poverty line). These changes directly affect hospitals and patients burdened by medical debt, aiming to standardize fair collection practices.