From Credit Reporting to Collections, Washington, D.C. Rewrites Medical Debt Rules
Washington, D.C., has enacted a new law that will place broad restrictions on how medical debt can be collected and reported.
The Medical Debt Mitigation Amendment Act of 2026 became law on August 20, 2026, but its substantive requirements are not yet applicable. The law establishes new requirements for health care providers and debt collectors handling medical debt, including limits on credit reporting, collection timelines, interest, wage garnishment, and property liens.
Although the law originally provided that its requirements would apply six months after their fiscal effect was included in an approved budget and financial plan, the D.C. Council’s FY2027 Budget Support Emergency Act repeals that delayed-applicability provision beginning October 1, 2026.
Medical Debt Collection Must Wait 180 Days
Under the new law, health care providers and debt collectors will not be allowed to begin medical debt collection until 180 days after a patient receives their first posted medical bill.
Patients must also receive at least 90 days’ notice before medical debt collection begins.
For certain health care facilities, that notice must explain the availability of free or discounted care and tell patients how they can apply for financial assistance. Collection is also restricted while certain health insurance appeals are pending or were pending within the previous 90 days.
The law also limits the amount of interest that can be charged on medical debt to 3% per year. In some cases involving patients receiving financial assistance, debt collectors will not be allowed to charge interest unless the patient has defaulted.
Medical Debt Credit Reporting Prohibited
Another major change involves consumer credit reports.
Under the law, health care providers and debt collectors will be prohibited from reporting the existence or amount of a patient’s medical debt to a consumer reporting agency.
The law also adds protections against certain collection methods. A health care provider or debt collector will not be allowed to file a property lien on a patient’s primary residence to collect medical debt.
Wage garnishment will also be prohibited when a patient’s annual household income is below 500% of the federal poverty level.
New Financial Assistance Requirements
The law also creates financial assistance requirements for certain health care facilities.
Qualifying facilities will have to establish financial assistance policies for eligible patients. At a minimum, those policies must provide free care to qualifying patients with household income at or below 200% of the federal poverty level.
Patients with household income above 200% and up to 500% of the federal poverty level may qualify for reduced-cost care at levels set by the law.
For eligible patients receiving reduced-cost care, facilities must offer payment plans with monthly payments generally capped at 3% of the patient’s monthly household income.
If the facility later sells that medical debt to a collection entity, the terms of the payment plan must remain in place.
What the Law Means for Medical Debt Collection
The law creates new requirements at several stages of the medical debt process, from financial assistance and payment plans to collection activity and credit reporting.
Health care providers and debt collectors handling medical accounts in Washington, D.C., will need to account for the new waiting periods and collection restrictions once the law becomes applicable.
The law’s effective date was August 20, 2026, but its requirements will apply six months after its fiscal effect is included in an approved D.C. budget and financial plan.
