The D.C. Council has given final approval to its medical debt overhaul, sending the Medical Debt Mitigation Amendment Act of 2026 to Mayor Muriel Bowser and moving the District closer to one of the most restrictive local frameworks in the country for how medical debt is reported, collected, and enforced.
The Council passed the measure on a second and final reading June 2 and transmitted the enrolled bill to the mayor June 16, with her response due July 1. After mayoral approval, the act faces a 30-day period of congressional review before taking effect, and its provisions apply six months after the fiscal impact is incorporated into an approved budget.
For the collection industry, the final version of the bill confirms several provisions that will directly affect recovery strategies on District healthcare portfolios. Providers and debt collectors would be barred from reporting the existence or amount of medical debt to consumer reporting agencies. Collection activity could not begin until 180 days after a consumer receives the first posted bill, and collectors would be required to give at least 90 days’ notice before starting.
Interest on medical debt would be capped at 3% annually, and collectors could not charge interest at all on debt tied to a financial-assistance facility when the patient is receiving assistance and has not defaulted. The bill also prohibits property liens against a patient’s primary residence and bars wage garnishment for households earning less than 500% of the federal poverty level.
Several provisions reach the secondary market. Any medical debt sold to a collection entity must retain the terms of the patient’s existing payment plan. Facilities subject to financial-assistance rules must report annually on how often they sell debt, the dollar amounts sold, and the business name of each buyer, along with any litigation filed against patients. Where a judgment was entered but the patient was never screened for assistance and later qualifies, the provider or collector must move to vacate or reduce it.
The act also restricts medical lending products, treating certain violations as unfair or deceptive trade practices, and caps hospital liens at 33% of a patient’s injury recovery.
Read the latest version of the bill
