A committee of council members for the Council of the District of Columbia has released a report on a medical debt collection bill that was introduced last year, moving the bill a step closer to being enacted. The legislation, now titled the Medical Debt Mitigation Amendment Act of 2026, was reported favorably by the Committee on Health and includes several revisions that directly impact how medical debt can be collected, reported, and enforced in the District.
The big picture: The bill reflects a broader trend of states and local governments taking a more active role in regulating medical debt. Nearly 90,000 District residents currently carry medical debt, according to the report, prompting lawmakers to pursue a more proactive approach beyond one-time debt forgiveness programs.
What changed in the committee version: The Committee Print introduces several notable updates that industry participants should be watching closely:
- Expanded collection restrictions:
- Prohibits wage garnishments and property liens for certain patients based on income thresholds
- Requires a 180-day waiting period before collections can begin, along with 90 days’ notice
- Credit reporting limitations:
- Maintains a prohibition on providers reporting medical debt to consumer reporting agencies
- Includes legal analysis asserting the provision does not conflict with the Fair Credit Reporting Act
- Financial assistance framework:
- Requires free care for patients at or below 200% of the federal poverty level
- Establishes a sliding scale for reduced-cost care up to 500% of the federal poverty level
- Narrows screening requirements, allowing hospitals to target specific patient groups instead of universal screening
- Payment plan structure:
- Caps monthly payments at 3% of household income
- Removes earlier provisions that would have required debt forgiveness after 36 months or capped total payments
- Operational and compliance changes:
- Adds reporting requirements on collection practices, lawsuits, and use of third-party collectors
- Aligns enforcement with existing health system regulations and gives the Office of the Attorney General clearer authority
New guardrails on lending and collections behavior: The bill also restricts how medical lending products can be promoted, particularly in situations where patients may lack full capacity to consent, such as during treatment. In addition, providers must include clear disclosures about financial assistance options before pursuing collections.
Why it matters: The proposal represents a tightening regulatory environment at the local level. The combination of delayed collection timelines, limits on credit reporting, and expanded financial assistance requirements could materially affect recovery strategies, particularly in healthcare portfolios.
The bill will now move to the full Council for consideration, with an implementation timeline tied to funding and rulemaking.
