Patient Debt Relief Act

• Hospitals would have to publish a charity care or financial assistance policy, screen patients for eligibility, decide eligibility at least 30 days before payment is due, allow appeals, and pause collection until eligibility is determined. The bill adds civil monetary penalties for noncompliance up to $1,000,000 per instance with a 90-day notice and a 45-day window to show corrective action.

• Patients and households would get stronger protections against harsh collections. Hospitals may not place liens, foreclose on homes, or garnish wages, and they generally cannot sell or assign debt unless it is over one year past due and a repayment option exists with monthly payments capped at 4 percent of gross monthly income; households at or below 250 percent of the poverty line cannot be charged interest or have their debt sold or assigned.

• The bill creates a grant program to let the Department of Health and Human Services fund at most one eligible nonprofit to acquire and discharge medical debt. An "eligible individual" is someone whose medical debt is 5 percent or more of their modified adjusted gross income (MAGI) or whose household income is at or below 400 percent of the federal poverty line; grantees must notify people within 60 days and report quarterly.

*Authorizes $100 million for fiscal year 2027 for the grant program, increasing federal outlays to carry out medical debt relief.*