Health Care

Plain English Breakdown

The bill summary and text do not specify the exact number of positions required for the program.

Freedom from Medical Debt Act

This bill requires the state treasurer to contract with a nonprofit entity to purchase and repay certain medical debts of Tennessee residents who meet income eligibility requirements.

What This Bill Does

• Creates the Freedom from Medical Debt Act, which requires the state treasurer to contract with a nonprofit entity to purchase and repay eligible debtors' medical debts at fair market value.
• Requires healthcare providers not to report patients' medical debt to consumer reporting agencies starting July 1, 2026.
• Prohibits consumer reporting agencies from including records of medical debt on consumer reports after July 1, 2026.
• Specifies that hospitals and ambulatory surgical treatment centers can sell their medical debts to nonprofits for the purpose of repaying patients' debts.
• Allocates $1 million in fiscal year 2026-27 from state interest earnings to fund this program.

Who It Names or Affects

• Tennessee residents who have medical debt and meet income eligibility requirements.
• Healthcare providers, including hospitals and ambulatory surgical treatment centers.
• Consumer reporting agencies.

Terms To Know

consumer report

A document that contains information about a person's credit history and financial reliability.

healthcare provider

An entity licensed to provide medical services, products, or devices.

Limits and Unknowns

• The exact number of positions required for the program cannot be predicted.
• Future appropriations beyond fiscal year 2026-27 are not specified and depend on available funds.

Official Summary Text

REPAYMENT OF MEDICAL DEBTS

This bill creates the Freedom from Medical Debt Act, which requires the
state treasurer
("treasurer")

to
contract with a nonprofit entity to provide for the nonprofit entity's repayment of eligible debtors' medical debts
. T
he treasurer
must
ensure that the nonprofit entity
(i) p
urchases the medical debt of eligible debtors from healthcare providers at fair market value
; and (ii) c
oordinates with the healthcare provider or debt collections agency to ensure that any adverse information resulting from the me
dical debt is removed from the debtor's consumer report following the repayment of the debt.

This bill authorizes a hospital or an ambulatory surgical treatment center to sell or otherwise transfer its medical debt to a nonprofit entity for the specific purpose of the nonprofit entity purchasing the medical debt of one or more patients by elimina
tion of the indebtedness.
A "h
ospital
"
means any
place
held out to the general public as ready, willing and able to furnish care in connection with the services of a physician or dentist for care, diagnosis or treatment
,
including such hospitals as are st
rictly maternity hospitals
. However, "hospital" does not mean

a
hospital or institution, operated by the department of mental health and substance abuse services or the department of disability and aging, specially intended for use in the diagnosis, care and treatment of those suffering from mental illness, intellect
ual disabilities, convulsive disorders, or other abnormal mental conditions
.

Interest Earnings

This bill provides that it
is the legislative intent that the treasurer's interest earnings in the sum of $1
million
be recognized in fiscal year 2026-2027 in the general appropriations act. It is further the legislative intent that such funds be available for the purpose of the treasurer contracting with a nonprofit entity to purchase and repay medical debts incurred
by residents of this state
.

DEBTOR ELIGIBILITY

T
o be eligible for repayment of medical debt,
this bill requires
the debtor
to meet all of the following requirements:



The debtor
must be a resident of this state
.


The debtor must have
a gross annual household income that is at or below

400% of the federal poverty level for the applicable household size
, which is
$128,60
0 for a family of four according to the federal
Department of Health and Human Services
.



The debtor ow
es medical debt in an amount that is 5% or more of the debtor's gross annual household income
.


The debtor has
a patient account that maintains an outstanding balance after more than

120 days have expired from the date the first bill is mailed to the debtor and after the healthcare provider has completed reasonable and customary attempts to collect the bill.

STATE NOT PLEDGED TO PAY

This bill requires a
ll contracts entered into in connection with the repayment of medical debt
to
contain a prominent statement to the effect that the state is not obligated to pay any portion of the medical debt, and that the faith and credit and the taxing power of the state is not pledged to the payment of the principal of or the interest on such
medical debts or related payment obligations of the nonprofit entity.

CONSUMER REPORTING

Beginning July 1, 2026,
this bill prohibits
a healthcare provider
from
report
ing
a patient's medical debt to a consumer reporting agency.
However, this bill
does not prohibit a healthcare provider from reporting a patient's medical debt to a debt collections agency.

This bill also prohibits
a consumer reporting agency
from
includ
ing
a record of medical debt

on a consumer report. If a

consumer reporting agency
does
include information in a consumer report
,
then the person to whom the consumer report applies may dispute the completeness or accuracy of such information, as provided under the federal Fair Credit Reporting Act
.

Violations and Penalties

A
violation of
the provisions above concerning reporting to agencies

constitute
s
a violation of the Tennessee Consumer Protection Act of 1977
("TCPA"). I
n addition to the penalties and remedies in
this bill, violations constitute
an unfair or deceptive act or practice affecting trade or commerce and is
subject to the penalties and remedies as provided in
the TCPA
,
which includes, but is not limited to, restraining orders, injunctions, private rights of action, and damages
.

Th
is bill provides that the
attorney general has all of the investigative and enforcement authority that the attorney general has under
TCPA
relating to alleged violations. The attorney general may institute any proceedings involving alleged violations in Davidson County circuit or chancery court or any other venue otherwise permitted by law.
This bill prohibits c
osts of any kind or nature
from
be
ing
taxed against the attorney general or this state in actions commenced
under this bill.

Current Bill Text

SENATE BILL 1598
By Lamar

HOUSE BILL 1859
By Brooks
HB1859
008169
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 4;
Title 8; Title 9; Title 47, Chapter 18; Title 63; Title
68 and Title 71, relative to medical debt.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. This act is known and may be cited as the "Freedom from Medical Debt
Act."
SECTION 2. Tennessee Code Annotated, Title 68, Chapter 1, Part 1, is amended by
adding the following as a new section:
(a) The state treasurer shall make and enter into a contract with a nonprofit
entity, upon such terms and conditions as the treasurer deems appropriate, to provide
for the nonprofit entity's repayment of eligible debtors' medical debts pursuant to this
section, including contracting for the publicizing of the availability of the entity to
determine a debtor's eligibility for such repayment.
(b) When entering into any contracts facilitating a nonprofit entity's repayment of
medical debts, the treasurer shall ensure that the nonprofit entity:
(1) Purchases the medical debt of eligible debtors from healthcare
providers at fair market value; and
(2) Coordinates with the healthcare provider or debt collections agency to
ensure that any adverse information resulting from the medical debt is removed
from the debtor's consumer report following the repayment of the debt.
(c) In order to be eligible for repayment of medical debt under this section, the
debtor must be a resident of this state who:
(1)

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(A) Has a gross annual household income that is at or below four
hundred percent (400%) of the federal poverty level for the applicable
household size; or
(B) Owes medical debt in an amount that is five percent (5%) or
more of the debtor's gross annual household income; and
(2) Has a patient account that maintains an outstanding balance after
more than one hundred twenty (120) days have expired from the date the first bill
is mailed to the debtor and after the healthcare provider has completed
reasonable and customary attempts to collect the bill.
(d) Any payment obligation under a contract entered into in connection with the
repayment of medical debt is not a debt, or pledge of the faith and credit, of the state but
is payable solely by the nonprofit entity. All such contracts must contain a prominent
statement to the effect that the state is not obligated to pay any portion of the medical
debt, and that the faith and credit and the taxing power of the state is not pledged to the
payment of the principal of or the interest on such medical debts or related payment
obligations of the nonprofit entity.
(e) As used in this section, "consumer report," "consumer reporting agency,"
"debt collections agency," "healthcare provider," and "medical debt" have the same
meanings as those terms are defined in § 47-18-5901.
SECTION 3. Tennessee Code Annotated, Title 47, Chapter 18, is amended by adding
the following as a new part:
47-18-5901.
As used in this part:
(1) "Consumer report" has the same meaning as defined by 15 U.S.C. §
1681a(d);

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(2) "Consumer reporting agency" has the same meaning as defined by
15 U.S.C. § 1681a(f);
(3) "Debt collections agency" means a person or entity hired to collect or
attempt to collect debts due or asserted to be due to another person or entity;
(4) "Healthcare provider" means a healthcare practitioner, person, or
facility licensed, authorized, certified, registered, or regulated under title 33, title
63, or title 68, and does not include a veterinarian licensed pursuant to the
Tennessee Veterinary Practice Act, compiled in title 63, chapter 12; and
(5) "Medical debt" means debt owed by a consumer to a healthcare
provider whose primary business is providing medical services, products, or
devices, or to the healthcare provider's agent or assignee, for the provision of
medical services, products, or devices.
47-18-5902.
(a) Beginning July 1, 2026, a healthcare provider shall not report a patient's
medical debt to a consumer reporting agency. This section does not prohibit a
healthcare provider from reporting a patient's medical debt to a debt collections agency.
(b) Beginning July 1, 2026, a consumer reporting agency shall not include on a
consumer report a record of medical debt.
(c) If a consumer reporting agency includes information in a consumer report in
violation of subsection (b), then the person to whom the consumer report applies may
dispute the completeness or accuracy of such information, as provided under the federal
Fair Credit Reporting Act (15 U.S.C. § 1681i).
47-18-5903.
(a) A violation of this part constitutes a violation of the Tennessee Consumer
Protection Act of 1977, compiled in part 1 of this chapter. A violation of this part

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constitutes an unfair or deceptive act or practice affecting trade or commerce and is
subject to the penalties and remedies as provided in the Tennessee Consumer
Protection Act of 1977, in addition to the penalties and remedies in this part.
(b) The attorney general and reporter has all of the investigative and
enforcement authority that the attorney general and reporter has under the Tennessee
Consumer Protection Act of 1977 relating to alleged violations of this part. The attorney
general and reporter may institute any proceedings involving alleged violations of this
part in Davidson County circuit or chancery court or any other venue otherwise permitted
by law.
(c) Costs of any kind or nature cannot be taxed against the attorney general and
reporter or this state in actions commenced under this part.
SECTION 4. Tennessee Code Annotated, Title 68, Chapter 1, Part 1, is amended by
adding the following as a new section:
Notwithstanding another law to the contrary, a hospital as defined in § 68-11-201,
or an ambulatory surgical treatment center as defined in § 68-11-201, may sell or
otherwise transfer its medical debt to a nonprofit entity for the specific purpose of the
nonprofit entity purchasing the medical debt of one (1) or more patients by elimination of
the indebtedness pursuant to SECTION 2.
SECTION 5. It is the legislative intent that the state treasurer's interest earnings in the
sum of one million dollars ($1,000,000) be recognized in fiscal year 2026-2027 in the general
appropriations act. It is further the legislative intent that such funds be available for the purpose
of the state treasurer contracting with a nonprofit entity to purchase and repay medical debts
incurred by residents of this state as set forth in SECTION 2.
SECTION 6. This act takes effect July 1, 2026, the public welfare requiring it.