Medical Debt Rights: The No Surprises Act, Charity Care, and Your Options

Medical debt is the leading cause of bankruptcy in the United States, affecting an estimated 100 million Americans. Unlike other forms of consumer debt, medical debt often arises from unexpected emergencies and situations where patients have little or no ability to shop around or negotiate prices. The good news is that federal and state laws provide significant protections for patients, and there are multiple strategies for reducing or eliminating medical bills.

This guide covers your rights under the No Surprises Act, how to access charity care, how to negotiate medical bills, and what to do if your medical debt goes to collections.

The No Surprises Act: Ending Surprise Medical Bills

The No Surprises Act, which took effect on January 1, 2022, is one of the most significant consumer protection laws for patients. It primarily protects patients from "surprise" or "balance" bills that arise when patients unknowingly receive care from out-of-network providers.

Key protections under the No Surprises Act include:

• Emergency services. You cannot be balance billed for emergency services, regardless of whether the facility or provider is in your insurance network. You are only responsible for your in-network cost-sharing amounts (copays, coinsurance, and deductibles).
• Out-of-network providers at in-network facilities. If you receive care at an in-network hospital but are treated by an out-of-network doctor (such as an anesthesiologist, radiologist, or pathologist), you are protected from balance billing for those services.
• Air ambulance services. The Act protects patients from surprise bills for air ambulance services provided by out-of-network providers.
• Good faith estimates for uninsured patients. If you are uninsured or paying out of pocket, healthcare providers must give you a "good faith estimate" of expected charges before providing scheduled services. If the final bill exceeds the estimate by $400 or more, you can dispute it through a patient-provider dispute resolution process.

If you receive a surprise medical bill that you believe violates the No Surprises Act, call the No Surprises Help Desk at 1-800-985-3059 or file a complaint at cms.gov/nosurprises.

Charity Care: Free or Reduced-Cost Hospital Care

Nonprofit hospitals are required by federal law (Internal Revenue Code Section 501(r)) to have financial assistance policies, commonly known as "charity care" programs. These programs can reduce or completely eliminate your hospital bills based on your income and family size.

What you need to know about charity care:

• Eligibility. Each hospital sets its own income thresholds, but many cover patients earning up to 200-400% of the Federal Poverty Level (FPL). For a family of four in 2026, 200% FPL is approximately $62,400 and 400% FPL is approximately $124,800.
• How to apply. Ask the hospital's billing department or financial counseling office for a financial assistance application. You will typically need to provide proof of income (pay stubs, tax returns), identification, and a list of your household members.
• Retroactive applications. You can apply for charity care even after receiving a bill. Many hospitals allow applications for up to 240 days after the first billing statement.
• Required disclosures. Nonprofit hospitals are required to publicize their financial assistance policies, make applications widely available, and translate them into the primary languages spoken by their patient population.
• Billing restrictions. Before denying financial assistance, hospitals must make reasonable efforts to determine whether patients qualify. They cannot send bills to collections or take extraordinary collection actions (such as lawsuits or wage garnishments) before completing the financial assistance process.

Negotiating Your Medical Bills

Even if you do not qualify for charity care, there are effective strategies for reducing your medical bills:

1. Request an itemized bill. Always ask for a detailed, line-by-line breakdown of your charges. Medical billing errors are extremely common — studies suggest that up to 80% of medical bills contain errors. Look for duplicate charges, services you did not receive, and inflated pricing codes.
2. Compare prices. Use tools like Healthcare Bluebook or FAIR Health to look up the average cost of your procedures in your area. If your bill significantly exceeds the average, use this data as leverage in negotiations.
3. Ask for the cash-pay rate. Hospitals often charge uninsured patients significantly more than they charge insurance companies. Ask for the cash-pay or self-pay discount, which can be 30-70% less than the billed amount.
4. Negotiate a payment plan. Most hospitals and medical providers will set up interest-free payment plans. Ask for monthly payments you can afford. Get the agreement in writing before making payments.
5. Offer a lump-sum settlement. If you can pay a portion of the bill upfront, offer a lump-sum payment in exchange for the remainder being forgiven. Providers often prefer receiving some payment immediately rather than waiting months or risking that the debt becomes uncollectible.
6. Hire a medical billing advocate. Professional medical billing advocates review your bills for errors and negotiate on your behalf. They typically charge a percentage of the amount they save you.

Medical Debt and Your Credit Report

Major changes in how medical debt affects credit reports have taken effect in recent years:

• Paid medical debt removed. The three major credit bureaus (Equifax, Experian, and TransUnion) no longer include paid medical collection debt on credit reports.
• One-year waiting period. Unpaid medical debt cannot appear on your credit report until it has been in collections for at least one year, giving you time to resolve the debt or dispute errors.
• Small debts excluded. Medical collection debts under $500 are no longer reported on credit reports.
• FICO Score 9 and VantageScore changes. Newer credit scoring models give less weight to medical collections than other types of debt.

Despite these improvements, large unpaid medical debts in collections can still significantly impact your credit. If you have medical debt on your credit report, review it for accuracy and dispute any errors with the credit bureaus.

When Medical Debt Goes to Collections

If your medical debt is sent to a collection agency, you retain all the protections of the Fair Debt Collection Practices Act (FDCPA):

• Debt validation. Within 30 days of first contact, you have the right to request written verification of the debt, including the original creditor, the amount owed, and an itemized statement.
• Dispute rights. If you dispute the debt in writing within 30 days, the collector must stop collection efforts until they provide verification.
• Harassment protections. Collectors cannot call you before 8 a.m. or after 9 p.m., use threats or profanity, call your workplace if you tell them not to, or misrepresent the amount owed.
• Statute of limitations. Every state has a statute of limitations on medical debt, typically between three and six years. Once the statute expires, the collector can no longer sue you to collect, though the debt itself does not disappear.

Government Programs That Can Help

Several government programs may help cover medical costs or provide financial relief:

• Medicaid — Provides free or low-cost health coverage for low-income individuals and families. Eligibility varies by state, and some states have expanded Medicaid to cover adults earning up to 138% of FPL.
• Medicare Savings Programs — Help low-income Medicare beneficiaries pay for premiums, deductibles, and copays.
• ACA Marketplace subsidies — Premium tax credits and cost-sharing reductions can significantly reduce insurance costs for people who buy coverage through the Health Insurance Marketplace.
• Hill-Burton facilities — Some hospitals that received federal construction funding under the Hill-Burton Act are required to provide a certain amount of free or reduced-cost care. Visit hrsa.gov/get-health-care/affordable/hill-burton to find Hill-Burton facilities near you.
• State financial assistance programs — Many states have their own medical debt relief programs, hospital rate-setting commissions, or patient protection laws that go beyond federal requirements.

Steps to Take Right Now If You Have Medical Debt

1. Request an itemized bill and review it carefully for errors.
2. Ask the provider about financial assistance or charity care programs.
3. Negotiate the bill — request cash-pay rates or payment plans.
4. Check if you qualify for Medicaid, marketplace subsidies, or other programs.
5. If the debt is in collections, send a debt validation letter within 30 days.
6. Check your credit report for accuracy and dispute any errors.
7. Consult a patient advocate or legal aid organization for help.

Medical debt should never prevent you from seeking necessary care. Many resources exist to help you manage and reduce medical bills. Do not ignore medical debt — take action early, and explore every available option before making payments you cannot afford.