WASHINGTON, D.C. — The District of Columbia’s sweeping Medical Debt Mitigation Amendment Act of 2026 has cleared the District’s legislative process and is projected to take effect Sept. 18, creating a broad prohibition on medical-debt credit reporting while imposing new limits on collection activity, wage garnishment, liens, medical lending promotion and hospital financial-assistance practices.
The legislation is particularly consequential for providers, collection agencies, debt buyers and furnishers because it bars a health care provider or debt collector from reporting “the amount or existence” of any medical debt owed by a patient to a consumer reporting agency. The measure defines medical debt broadly to include a bill that is not yet past due and that arises from medical services, products or devices.
Core Reporting Prohibition
New D.C. Code language provides that a health care provider or debt collector may not report any medical debt to a consumer reporting agency. The prohibition applies to both the dollar amount and the mere existence of the debt.
The law’s definition matters operationally. It covers debt owed directly to a provider for medical services, products or devices, including a current bill that has not yet become delinquent. However, charges placed on a general-purpose credit card are excluded unless the card qualifies as a “medical lending product” under the statute.
For collectors and provider clients, the restriction means medical accounts associated with District patients should be segregated from any furnishing workflow well before an account reaches traditional credit-reporting decision points. Collection entities are defined to include those that purchase medical debt or collect medical debt on behalf of another.
Broader Collection Limits
The credit-reporting ban is part of a substantially wider medical-debt overhaul. Among the new restrictions:
-
Providers and debt collectors generally may not begin medical-debt collection until 180 days after the patient receives the first posted medical bill and must provide at least 90 days’ notice before commencing collection activity.
-
Interest on medical debt is capped at 3% annually. For debt related to services at facilities subject to the law’s financial-assistance-policy requirements, collectors may not charge interest when a financially assisted patient has not defaulted on a payment plan.
-
A provider or collector may not file a lien against a patient’s primary residence.
-
Wage garnishment is prohibited for patients with annual household income below 500% of the federal poverty level.
-
Collection activity, litigation, arbitration, referral or sale to a debt buyer is restricted when the creditor knows or should know that an insurance appeal tied to the medical debt is pending or was pending within the prior 90 days.
The act also provides that medical-debt collection does not include posting the first bill, sending monthly statements or attempting to verify insurance coverage or eligibility. That distinction should be important as providers and their agency partners revise account-placement, notice and pre-collection procedures.
Financial Assistance Requirements
The new law requires covered health care facilities to establish financial-assistance policies for medically necessary services and to make them readily available to eligible patients. Facilities must offer free care to patients with household income at or below 200% of the federal poverty level. They also must provide discounted care for patients earning more than 200% and up to 500% of the federal poverty level, with required reductions ranging from 40% to 75% depending on income.
Covered facilities must affirmatively offer financial-assistance screening to uninsured patients, individuals enrolled in specified public-assistance programs, people experiencing homelessness or at risk of homelessness, and certain patients previously approved for aid. Patients may apply for assistance for up to 240 days after the first bill, and a facility or collection entity must cease collection activity while an eligible patient’s application is pending.
Where reduced-cost care applies, facilities must offer a payment plan with a monthly installment generally capped at 3% of the patient’s monthly household income. Medical debt sold to a collection entity retains the payment-plan terms. A provider or collector cannot accelerate or default a plan without at least three consecutive missed payments, three reasonable attempts at contact, written notice and a good-faith effort to renegotiate if requested.
Medical Lending Provisions
The measure also targets medical financing practices. Providers may not assist patients in completing applications for medical lending products and may not promote such products to patients who are sedated, receiving treatment or in a treatment area, subject to limited exceptions.
Other restrictions prohibit providers from charging a medical credit product before the procedure or before costs are incurred, charging credit when insurance will cover the service except for patient cost-sharing, requiring credit-card preauthorization before emergency services, or offering a medical lending product at a covered facility before financial-assistance screening has been offered or completed. Violations of those medical-lending restrictions are treated as unfair or deceptive trade practices under D.C. law.
Compliance Timeline
Although the measure is projected to become effective Sept. 18, its substantive provisions apply six months after the act’s fiscal effect is included in an approved District budget and financial plan. The District’s chief financial officer must certify that inclusion, and the Council’s budget director must publish notice of the certification in the D.C. Register.
The delayed applicability date gives providers, agencies, debt buyers and service providers time to reassess their District portfolios. Key compliance priorities include identifying covered medical accounts, disabling furnishing pathways, updating placement and dispute procedures, reviewing insurance-appeal holds, revising payment-plan processes, and confirming that provider-client contracts reflect the new restrictions.
The law reflects the continuing state and local expansion of medical-debt protections. A Congressional Research Service overview reported that 11 states had enacted laws restricting or prohibiting medical-debt credit reporting as of June 2025, while federal medical-debt policy has remained subject to legal and regulatory change.
Upcoming Events
