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HB-5255, As Passed House, June 23, 2026
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SUBSTITUTE FOR
HOUSE BILL NO. 5255
A bill to limit interest and charges on medical debt; to limit
actions taken to collect medical debt; to limit the sale of medical
debt; to require information to be provided regarding medical debt;
and to provide remedies.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act may be cited as the "medical debt protection 1
act". 2
Sec. 2. As used in this act: 3
(a) "Consumer" means a resident of this state. 4
(b) "Consumer reporting agency" means that term as defined in 5
15 USC 1681a. 6
(c) "Emergency medical condition" means, regardless of the 7
final diagnosis rendered, the condition of an emergency patient, as 8
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that term is defined in section 20904 of the public health code, 1
1978 PA 368, MCL 333.20904. 2
(d) "Emergency services" means all of the following with 3
respect to an emergency medical condition: 4
(i) Both of the following: 5
(A) A medical screening examination as required under 42 USC 6
1395dd that is within the capability of the emergency department of 7
a hospital, including ancillary services routinely available to the 8
emergency department to evaluate the emergency medical condition. 9
(B) Further medical examination and treatment, to the extent 10
those are within the capabilities of the staff and facilities 11
available at the hospital, as are required under 42 USC 12
1395dd(e)(3) to stabilize the patient. 13
(ii) As it relates to any mental health service or substance 14
use disorder service, as those terms are used in the definition of 15
service in section 100d of the mental health code, 1974 PA 258, MCL 16
330.1100d, rendered at a behavioral health crisis service provider, 17
both of the following: 18
(A) A behavioral health assessment that is within the 19
capability of a behavioral health crisis service provider, 20
including ancillary services routinely available to evaluate the 21
emergency medical condition. 22
(B) Further examination and treatment, to the extent that 23
those are within the capabilities of the staff and facilities 24
available at the behavioral health crisis service provider, as are 25
required so that the patient's condition does not deteriorate. 26
(e) "Extraordinary collection action" means any action taken 27
to obtain payment of a medical debt to which any of the following 28
apply: 29
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(i) The action involves reporting adverse information about an 1
individual to consumer reporting agencies. 2
(ii) The action involves deferring, denying, or requiring a 3
payment before providing emergency services or urgent services 4
because of an individual's nonpayment of medical debt. 5
(iii) The action requires a legal or judicial process, 6
including, but not limited to, any of the following: 7
(A) Placing a lien on an individual's property. 8
(B) Foreclosing on an individual's real property. 9
(C) Attaching or seizing an individual's bank account or any 10
other personal property. 11
(D) Commencing a civil action against an individual. 12
(E) Causing an individual's arrest. 13
(F) Garnishing an individual's wages. 14
(f) "Financial assistance policy" means a written policy made 15
under 26 CFR 1.501(r)-1 to 1.501(r)-7 or another written policy for 16
providing financial assistance to patients adopted by a large 17
health care facility or medical creditor voluntarily or otherwise 18
as required by applicable federal or state statute, regulation, or 19
rule. 20
(g) "Health care good" includes, but is not limited to, a 21
medical product, a medical device, any durable medical equipment, 22
or a prescription drug. 23
(h) "Health care service" means any of the following: 24
(i) A service included in or incidental to the furnishing of 25
any medical, behavioral, mental health, substance use disorder, 26
nursing home, dental, or optometric care. 27
(ii) A service included in or incidental to hospitalization. 28
(iii) A service furnished to an individual for the purpose of 29
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preventing, alleviating, curing, or healing human physical illness 1
or injury, or behavioral, mental health, or substance use disorder. 2
(i) "Large health care facility" means a person that is either 3
of the following: 4
(i) A hospital as that term is defined in section 20106 of the 5
public health code, 1978 PA 368, MCL 333.20106. 6
(ii) A person that provides 1 or more health care services and 7
that has an annual revenue of not less than $20,000,000.00. 8
(j) "Medical creditor" means the person that provided a health 9
care service or health care good that gave rise to the medical debt 10
and to which the medical debt is owed or, if the medical debt has 11
been sold, to which the medical debt was previously owed. 12
(k) "Medical debt" means a debt owed by a consumer to a person 13
whose primary business is providing a health care service or health 14
care good, or to the person's agent or assignee, for the provision 15
of a health care service or health care good. Medical debt 16
includes, but is not limited to, medical bills that are not past 17
due or that have been paid. Medical debt does not include debt 18
charged to a credit card unless the credit card is issued under an 19
open-end or closed-end credit plan offered solely for the payment 20
of a health care service or heath care good. 21
(l) "Medical debt buyer" means a person that is engaged in the 22
business of purchasing medical debt or collecting medical debt on 23
behalf of another person, whether the medical debt buyer collects 24
the medical debt directly or hires an attorney or other person to 25
collect the medical debt. 26
(m) "Medical debt collector" means a person that regularly 27
collects or attempts to collect, directly or indirectly, medical 28
debts originally owed, due, or asserted to be owed or due to 29
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another. Medical debt collector includes a medical debt buyer. 1
(n) "Patient" means the person that owes the medical debt, 2
including the individual who received the health care service or 3
health care good and a parent or guardian that is legally liable 4
for the medical debt. 5
(o) "Urgent services" means a health care service the delay of 6
which could seriously jeopardize an individual's life, health, or 7
ability to regain maximum function. 8
Sec. 3. (1) A large health care facility or medical debt buyer 9
shall not charge a patient interest or a late fee on medical debt 10
until 90 days after the due date applicable to the final invoice 11
for the medical debt. 12
(2) A large health care facility or medical debt buyer shall 13
not charge interest or late fees on medical debt that exceeds 3 14
percent of the amount of the medical debt per annum. 15
(3) A medical creditor or medical debt collector shall not use 16
any of the following extraordinary collection actions to collect a 17
medical debt: 18
(a) Causing an individual's arrest. 19
(b) Foreclosing on an individual's real property. 20
(c) Placing a lien on an individual's personal property. 21
(d) Garnishing the wages of an individual who qualifies for 22
financial assistance under the financial assistance policy 23
applicable to the underlying medical debt. 24
(4) A medical creditor shall not sell an individual's medical 25
debt to a medical debt buyer unless, before the sale, the medical 26
creditor has entered into a legally binding written agreement with 27
the medical debt buyer under which all of the following apply: 28
(a) The medical debt buyer is prohibited from engaging in any 29
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extraordinary collection action described in subsection (3) to 1
obtain payment. 2
(b) The medical debt buyer is prohibited from charging 3
interest on the debt at a rate higher than 3 percent per annum. 4
(c) The debt is returnable to or recallable by the medical 5
creditor on a determination by the medical debt buyer that the 6
individual is eligible for financial assistance under the financial 7
assistance policy applicable to the underlying medical debt. 8
(d) The medical debt buyer is required to adhere to specified 9
procedures that ensure that the individual does not pay, and has no 10
obligation to pay, the medical debt buyer more than the individual 11
is responsible for paying in compliance with this act. 12
(5) A medical creditor that sells medical debt to a medical 13
debt buyer under an agreement described in subsection (4) is liable 14
for any actions taken by the medical debt buyer in relation to the 15
medical debt, subject to any indemnification provisions agreed to 16
by the creditor and the buyer. 17
(6) A medical creditor or medical debt collector shall not 18
take any extraordinary collection action until 120 days after the 19
due date applicable to the final invoice for a health care service 20
or health care good. Not later than 30 days before taking any 21
extraordinary collection action, a medical creditor or medical debt 22
collector shall provide the patient a notice that includes all of 23
the following: 24
(a) If the medical debt resulted from a health care service 25
provided by a large health care facility, a statement of whether 26
financial assistance is available for eligible individuals and a 27
plain-language summary of any financial assistance policy. 28
(b) A list of any extraordinary collection actions that will 29
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Final Page
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be taken to obtain payment. 1
(c) A deadline after which the extraordinary collection 2
actions will be initiated, which must be 30 days or more after the 3
date the notice is provided. 4
(7) A large health care facility or medical debt collector 5
collecting medical debt for a health care service or health care 6
good provided by a large health care facility shall not use any 7
extraordinary collection action unless the action is described in 8
the large health care facility's billing and collections policy. 9
(8) If a patient has paid any part of a medical debt in excess 10
of the amount owed after receiving any financial assistance offered 11
by a large health care facility, the large health care facility or 12
medical debt collector, as specified in the agreement required by 13
subsection (4), shall refund the excess amount to the patient not 14
later than 60 days after the excess payment is determined. 15
Sec. 4. A violation of this act is a prohibited practice under 16
and subject to the enforcement provisions of the Michigan consumer 17
protection act, 1976 PA 331, MCL 445.901 to 445.922. 18
Enacting section 1. This act does not take effect unless all 19
of the following bills of the 103rd Legislature are enacted into 20
law: 21
(a) Senate Bill No. 95. 22
(b) House Bill No. 5254. 23