Medical Debt: Patient Rights, Hospital Financial Assistance and Billing Dispute Process

What Are Your Rights on Medical Debt?

You have specific federal rights when you get a medical bill: protection from certain surprise out-of-network charges under the No Surprises Act, the right to ask a nonprofit hospital about its financial assistance (charity care) program before you’re sent to collections, and the right to dispute a bill you think is wrong. This guide walks through each right, shows you the billing dispute process step by step, and explains where medical debt currently stands on your credit report.

If a debt collector threatens you with arrest, wage garnishment “today,” or refuses to identify themselves, that can be a sign of illegal collection practices or a scam. Do not give bank information over the phone to an unverified caller. You can report suspicious collection activity to the Consumer Financial Protection Bureau or the Federal Trade Commission.

Is Medical Debt Still Reported to Credit Bureaus?

Yes, medical debt can still appear on your credit report. In January 2025, the CFPB finalized a rule that would have banned nearly all medical debt from credit reports, but a federal court in the Eastern District of Texas vacated that rule in July 2025, ruling the CFPB exceeded its authority under the Fair Credit Reporting Act. The rule never took effect.

What is still in place: the three nationwide credit bureaus (Equifax, Experian, and TransUnion) voluntarily agreed in 2023 to:

Remove medical collection accounts under $500 from credit reports
Remove paid medical collection accounts from credit reports, regardless of the amount
Wait at least one year after a bill goes to collections before reporting it (up from the previous 60- to 180-day window)

These voluntary bureau policies are separate from the vacated federal rule and remain in effect. Some states have also passed their own medical debt credit reporting laws; whether those state laws still apply is being contested in court, so check your state attorney general’s office for the current status in your state.

The No Surprises Act: What It Covers

The No Surprises Act is a federal law, in effect since January 1, 2022, that limits what you can be billed when you unexpectedly receive care from an out-of-network provider. It generally applies to:

Most emergency services, including emergency care at an out-of-network hospital or freestanding emergency room
Non-emergency care from an out-of-network provider (like an anesthesiologist or radiologist) at an in-network hospital, outpatient facility, or surgical center
Out-of-network air ambulance services

In these situations, you generally cannot be billed more than your plan’s in-network cost-sharing amount for that service. The law does not cover ground ambulance rides. If you’re uninsured or self-pay, you also have the right to a written “Good Faith Estimate” before scheduled care, and you can dispute a bill that comes in substantially higher than that estimate through the No Surprises Act’s dispute process.

Nonprofit Hospitals and Charity Care: A Legal Obligation

Most U.S. hospitals are nonprofit organizations that receive a federal tax exemption. In exchange, federal tax law (Internal Revenue Code Section 501(r)) requires every nonprofit hospital to:

Maintain a written Financial Assistance Policy (FAP), often called a charity care policy
Publish that policy, in plain language, on the hospital’s website and in admission and emergency areas
Make reasonable efforts to find out whether you qualify for financial assistance before sending your account to aggressive collection actions, such as lawsuits, wage garnishment, or credit reporting
Give you written notice, at least 30 days before starting those collection actions, that financial help is available

Financial assistance eligibility, discount levels, and application steps vary by hospital. Ask the hospital’s billing office directly for a copy of its Financial Assistance Policy, or look for it on the hospital’s website, often under “Billing,” “Financial Assistance,” or “Patient Resources.”

The Medical Billing Dispute Process

Follow these general steps if you believe a medical bill is wrong or too high. Because hospital and insurer procedures differ, confirm the specific process with your provider and plan.

Request an itemized bill. Ask the billing office for a full itemized statement showing every charge, not just a summary balance.
Compare it to your Explanation of Benefits (EOB). Your insurer’s EOB shows what was billed, what insurance paid, and what you owe. Look for services you didn’t receive, duplicate charges, or incorrect billing codes.
Ask about the Financial Assistance Policy. If the provider is a nonprofit hospital, ask whether you qualify for a payment plan before agreeing to one.
Put your dispute in writing. Send a letter identifying the specific charges you dispute and why, and request a response and a hold on collection activity while the provider investigates. Send it by a method that gives you proof of delivery.
Escalate if needed. If the provider doesn’t resolve the dispute, or if a No Surprises Act protection applies, you can file a complaint with the No Surprises Help Desk or the CFPB.

Payment Plans: What to Ask Before You Agree

Before signing any payment plan, ask the billing office these questions:

Does this plan charge interest or fees, and if so, how much?
Is a lower amount available if I qualify for financial assistance instead?
What happens if I miss a payment?
Will this account be reported to a credit bureau or sent to a debt collector while I’m on the plan?

Get the agreed terms in writing before you make a payment. A hospital’s Financial Assistance Policy may reduce your balance more than a standard payment plan would, so it’s worth asking about financial assistance first.

When to Consult a Licensed Attorney

Consider talking to a consumer law attorney or a legal aid organization if you’re facing a lawsuit over medical debt, wage garnishment, a bank account levy, or if a collector appears to be violating debt collection law. Many areas have free or low-cost legal aid for medical debt disputes; your state bar association’s lawyer referral service or local legal aid office can help you find one.

Frequently Asked Questions

Can a hospital send my bill to collections while I’m applying for financial assistance?

Under federal tax rules, a nonprofit hospital must make reasonable efforts to determine your eligibility for its Financial Assistance Policy before taking extraordinary collection actions, and must give you written notice at least 30 days in advance. Ask the billing office in writing whether your financial assistance application is pending before any collection action begins.

Does the No Surprises Act apply to all medical bills?

No. It applies to specific situations involving out-of-network emergency care, certain out-of-network providers at in-network facilities, and out-of-network air ambulance services. It does not cover ground ambulance transport or care you knowingly and voluntarily choose from an out-of-network provider after receiving proper notice and consent.

Will paying off a medical collection remove it from my credit report?

Under the credit bureaus’ 2023 voluntary policy, paid medical collection accounts should be removed from your report regardless of the amount. If a paid account is still showing 30 to 60 days after payment, you can dispute it directly with the credit bureau.

What’s the difference between medical debt and a scam collection call?

Legitimate debt collectors must, by law, provide written validation of a debt including the amount and the original creditor. Be cautious of any caller who demands immediate payment by gift card or wire transfer, refuses to send anything in writing, or threatens immediate arrest — these are common scam tactics, not lawful collection practices.