Navigating medical debt collection is a complex challenge for healthcare providers. Understanding medical debt collection laws that protect consumers from abusive credit collection practices is more important than ever.
Whether you’re a healthcare provider managing revenue or a patient facing medical bills, knowing your rights and obligations under federal and state laws is essential.
Here are the key medical debt collection laws shaping medical debt collection in 2026:
Contents
- 1 1. Fair Debt Collection Practices Act (FDCPA)
- 2 2. Fair Credit Reporting Act (FCRA)
- 3 3. No Surprises Act
- 4 4. HIPAA Privacy Rule
- 5 5. Consumer Financial Protection Bureau (CFPB) Oversight
- 6 6. Telephone Consumer Protection Act (TCPA)
- 7 7. State-Specific Medical Debt Laws
- 8 8. Nonprofit Hospital Financial Assistance Requirements
- 9 Frequently Asked Questions
- 10 Q1: What is the most important law protecting me from aggressive medical debt collectors?
- 11 Q2: Does the FDCPA apply to the hospital or doctor’s office billing me directly?
- 12 Q3: What should I do if I receive a surprise medical bill?
- 13 Q4: Can a debt collector discuss my medical debt with my family or employer?
1. Fair Debt Collection Practices Act (FDCPA)
The FDCPA is the primary federal law governing third-party debt collectors. It sets strict boundaries on how credit collection services can interact with consumers.
An Overview:
- Harassment, false statements, and calls outside of 8 AM – 9 PM
- Misrepresenting the amount owed or falsely claiming legal action
- Discussing customers’ debt with third parties without permission
The FDCPA applies only to third-party collectors, not original creditors.
2. Fair Credit Reporting Act (FCRA)
The FCRA regulates how medical debts appear on credit reports. Recent changes have significantly strengthened consumer protections.
An Overview:
- Medical debts cannot be reported to credit bureaus until 365 days after the date of service
- Paid medical debts must be removed from credit reports by all three major credit bureaus
- Medical debts are not included on credit reports
Important 2025-2026 update: In January 2025, the CFPB finalized a rule that would have removed all medical debt from credit reports. However, this rule was overturned by a federal court in July 2025.
3. No Surprises Act
Effective January 1, 2022, the No Surprises Act protects consumers from unexpected medical bills, particularly from out-of-network providers.
Protection coverage:
- Emergency services at out-of-network facilities
- Out-of-network providers at in-network hospitals (like anesthesiologists or lab services)
- Air ambulance services (ground ambulances not included)
For uninsured patients:
- Providers must give good-faith cost estimates before scheduled services
4. HIPAA Privacy Rule
The HIPAA Privacy Rule protects the confidentiality of patient health information during the portfolio recovery process.
What HIPAA means for debt collection:
- Collectors can only access billing-related information
- Full medical records cannot be demanded or disclosed
- Patient diagnoses and treatment details remain protected
Collection must comply with HIPAA when handling medical accounts, ensuring patient privacy is maintained even during collections.
5. Consumer Financial Protection Bureau (CFPB) Oversight
The CFPB enforces federal consumer financial laws and provides critical oversight of debt collection practices.
Key Aspects:
- Supervises banks and large non-bank entities
- Takes action against companies for violating federal consumer financial laws
- Issue regulations to implement various consumer protection laws
- Provides education material and manages a complaint system
6. Telephone Consumer Protection Act (TCPA)
The TCPA restricts how collectors can contact you via phone, text, or automated systems.
TCPA protections:
- Collectors need prior consent for automated calls and texts
- Cannot call before 8 a.m. or after 9 p.m.
This law prevents spam and harassment through excessive robocalls or text messages.
7. State-Specific Medical Debt Laws
Many states offer additional protections beyond federal law. These vary significantly by location.
Common state protections include:
- Stronger limits on wage garnishment
- Shorter statutes of limitations for collection lawsuits
- Complete bans on medical debt credit reporting
- Required financial assistance programs at nonprofit hospitals
8. Nonprofit Hospital Financial Assistance Requirements
Federal law requires nonprofit hospitals to maintain financial assistance or charity care policies.
Hospital obligations:
- Must inform patients about financial assistance programs
- Cannot take “extraordinary collection actions” (like credit reporting) until 120 days after the first post-discharge bill
- Must provide at least 30 days’ notice before reporting to credit bureaus
If you meet income requirements, you may qualify for free or significantly discounted care. Always ask about financial assistance options before paying.
How First Credit Services Ensures Compliant Medical Debt Collections
As a BPO service and debt collection agency, First Credit Services specializes in healthcare business process outsourcing. We offer customized solutions for hospitals, physician groups, and medical offices with our:
- 30+ Years of Experience – Trusted partner for leading healthcare providers
- HIPAA-Compliant Operations – Secure and regulatory-compliant RCM and EBO services
- Proven Results – We help reduce AR days, increase collections, and streamline workflows
- Omnichannel Engagement – AI-driven patient communication and revenue cycle solutions
By outsourcing healthcare back office operations to FCS, hospitals and physician groups can focus on patient care while ensuring financial stability.
Enhance your revenue cycle, optimize cash flow, and improve patient engagement with FCS’s specialized healthcare business process outsourcing solutions. Contact us today to learn more!
Frequently Asked Questions
Q1: What is the most important law protecting me from aggressive medical debt collectors?
The Fair Debt Collection Practices Act (FDCPA) is the primary federal law that prohibits harassment, lies, and abusive practices by third-party debt collectors. It restricts when and how they can contact you.
Q2: Does the FDCPA apply to the hospital or doctor’s office billing me directly?
No. The FDCPA typically applies only to third-party debt collection agencies. However, the original healthcare provider (the creditor) must still comply with other laws like the No Surprises Act, HIPAA, and state regulations.
Q3: What should I do if I receive a surprise medical bill?
The No Surprises Act protects you from most surprise bills for emergency services and out-of-network care at in-network facilities. If you receive one, contact the provider and your insurer immediately, and file a complaint with the CFPB if the issue isn’t resolved.
Q4: Can a debt collector discuss my medical debt with my family or employer?
Generally, no. The FDCPA prohibits collectors from discussing your debt with third parties without your permission, except to confirm your location. HIPAA also protects the privacy of your medical information.
