Michigan House Advances Second Medical Debt Package Requiring Hospital Financial Assistance Programs

Legislative Snapshot

• Bills: House Bills 6071, 6072, and 6073
• Jurisdiction: Michigan
• Status: Passed Michigan House of Representatives
• Key Provisions: Requires hospital financial assistance programs, expands patient notification requirements, limits certain medical debt reporting practices, increases hospital reporting requirements, and directs penalty funds toward medical debt relief.
• Effective Date: Not yet enacted
• Industry Impact: Hospitals may need to revise financial assistance policies, patient communications, and reporting practices, while medical debt collectors and creditors could face additional restrictions regarding credit reporting and consumer disclosures.

The Michigan House of Representatives has approved a second bipartisan package of medical debt legislation that would require hospitals to expand financial assistance programs, increase transparency around patient billing, and establish new safeguards before unpaid medical bills can be referred to collections.

House Bills 6071 through 6073 build on a separate package approved by the House earlier this year that would regulate how medical debt is collected. Together, the proposals represent a broader effort to reshape how medical debt is handled in Michigan, from the point of care through the collection process.

Hospitals Would Be Required to Expand Financial Assistance

Under the legislation, hospitals across Michigan would be required to maintain financial assistance programs designed to help patients who cannot afford their medical care.

Eligibility for assistance would be based on a patient’s income and financial circumstances. Hospitals would also be required to clearly inform patients about available financial assistance before unpaid medical bills could be sent to collections.

Supporters say the proposal is intended to help patients understand their options before facing collection activity while creating more consistent financial assistance standards across the state’s healthcare system.

New Collection-Related Consumer Protections

The legislation would establish additional restrictions related to medical debt collection.

Among the proposed protections are provisions that would:

• Prohibit debt collectors from falsely threatening to report medical debt to consumer reporting agencies.
• Require collectors to disclose when medical debt cannot be reported to credit bureaus.
• Prohibit medical creditors from reporting medical debt to credit reporting agencies.

If enacted, these provisions would further distinguish medical debt from other forms of consumer debt by limiting its effect on consumers’ credit histories.

Increased Hospital Oversight

The proposal would also require hospitals to report information regarding their financial assistance programs to the state.

Supporters say the reporting requirements are intended to improve transparency and allow policymakers to evaluate how financial assistance programs are being administered. Civil penalties collected for violations would be directed toward medical debt relief efforts for Michigan residents.

Complements the Earlier Medical Debt Reform Package

The newly approved legislation follows House passage of House Bills 5254 and 5255, which would establish the proposed Medical Debt Protection Act.

That earlier package would cap interest on medical debt, delay certain collection activities, regulate medical debt sales, and prohibit several aggressive collection practices, including certain wage garnishments and foreclosure-related actions tied to medical debt.

Taken together, the two legislative packages would establish both provider-facing requirements for hospitals and collection-related standards for creditors, medical debt buyers, and collection agencies.

Both packages now move to the Michigan Senate for further consideration.