Proposal would limit how providers and collectors collect medical debt

Health care entities and collection agencies would be barred from using or threatening listed methods to collect medical debt. The listed methods involve arrest, a consumer’s primary home, federal income tax refunds, and bank accounts. These proposed rules would apply to collection actions taken on or after January 1, 2026.

Health care entities and collection agencies would have to wait and give notice before taking defined extraordinary collection actions. These actions include selling or transferring a debt to a collector, using legal proceedings, reporting the debt to a credit reporting agency, and garnishing wages. The notice must identify the planned action and give a deadline at least 30 days later. For debt tied to services from a medical facility, it must say whether financial help is available and summarize the facility’s policy. The pause covers listed emergencies or health events in the consumer’s county. For a federal declaration, it applies only while the declaration has been in effect for less than six months. The pause also extends the time limit for bringing a debt claim. The 180-day wait starts when the first bill is sent. These proposed rules would apply to collection actions taken on or after January 1, 2026.

Health care entities and collection agencies would have to follow the provider’s billing policy, reverse certain collection actions, and refund excess payments after financial help is applied. These rules cover debt for medical services, products, or devices provided by a health care entity. The provider’s billing and collection policy must describe the action. If the consumer qualifies for help that eliminates the debt, the provider or collector must reverse the action, including removing a lien, attachment, or garnishment against the consumer’s property. If financial help leaves the consumer having paid more than the debt, the provider or collector must refund the excess within 60 days. The proposal says consumers cannot waive these protections. These proposed rules would apply to collection actions taken on or after January 1, 2026. Any excess payment must be refunded within 60 days.