Virginia’s Medical Debt Protection Act took effect July 1, 2026, barring large health care facilities and medical debt buyers from charging interest or late fees on medical debt until it is 90 days past due and prohibiting certain aggressive collection actions. The law arrives as states move to fill a gap left by a vacated federal medical debt rule, making Virginia one of the states with the strongest patient protections in the country.
Key Takeaways
- Virginia’s Medical Debt Protection Act, House Bill 1725, took effect July 1, 2026.
- Large health care facilities and medical debt buyers cannot charge interest or late fees until 90 days after the final invoice due date, then capped at 3% per year.
- The law bars extraordinary collection actions until 120 days after the due date and requires 30 days’ written notice first.
- Wage garnishment is permanently prohibited for patients who qualify for financial assistance.
- The law took effect as a federal medical debt rule was vacated in court, leaving states as the primary source of new protections.
What the Law Does
Virginia’s Medical Debt Protection Act, codified as Chapter 59 of Title 59.1 of the Code of Virginia, was passed by the General Assembly in 2025, signed into law by Governor Glenn Youngkin on May 2, 2025, and given a delayed effective date of July 1, 2026. The law is designed to shield patients from aggressive medical debt collection, particularly by large health care facilities and companies that buy medical debt.
The Medical Debt Protection Act limits interest and fees at the front end. A large health care facility or medical debt buyer cannot charge a patient any interest or late fees on medical debt until 90 days after the due date on the final invoice. After that window, any interest or late fees are capped at 3% per year of the debt amount, a fraction of the rates common on credit cards.
The law also restricts what collectors can do. No medical creditor or medical debt collector may take an extraordinary collection action, such as a lawsuit, lien, or wage garnishment, until 120 days after the final invoice due date. Before initiating any such action, the creditor or collector must give the patient written notice at least 30 days in advance, including whether financial assistance is available, a list of the collection actions planned, and a deadline. Wage garnishment is permanently prohibited for any patient who qualifies for financial assistance under the applicable facility’s policy.
Who Is Covered
The Medical Debt Protection Act reaches beyond hospitals. Depending on the entity and the debt involved, it can apply to hospitals, hospital-affiliated outpatient facilities, large physician and specialty practices, skilled nursing and assisted living facilities, collection agencies, and medical debt buyers. A large health care facility is defined to include outpatient practices providing medical, surgical, behavioral, optical, radiology, laboratory, or dental services with annual revenues of at least $20 million, a definition that may capture larger physician groups and multispecialty clinics that do not think of themselves as hospital-regulated entities.
The law adds guardrails when medical debt is sold. A medical creditor cannot sell a patient’s medical debt to a debt buyer unless a binding written agreement bars the buyer from extraordinary collection actions, caps interest at 3% per year, and requires the debt to be recalled if the patient is found eligible for financial assistance. If a patient overpays a medical debt after financial assistance is applied, the facility or collector must refund the excess within 60 days. Violations are treated as prohibited practices under the Virginia Consumer Protection Act, giving the state enforcement tools.
Why It Matters Nationally
The timing underscores a broader national shift. Roughly 100 million Americans carry some form of medical debt. A federal medical debt rule from the Consumer Financial Protection Bureau, which would have removed medical debt from credit reports for millions of consumers, was vacated by a court in 2025. That outcome left states as the main source of new medical debt protections, and Virginia’s law is among a wave of state-level measures taking effect this year.
Virginia had already moved in this direction. A 2024 law, effective July 2024, prohibited hospitals, licensed providers, EMS agencies, and collectors from reporting medical debt to credit bureaus. The 2026 Medical Debt Protection Act builds on that by targeting billing, interest, and collection practices directly. Major advocates for the law included the American Cancer Society Cancer Action Network and the Virginia Poverty Law Center, which argued the measure would ease the financial fear that accompanies illness-related debt.
One caveat consumer advocates emphasize: the protections apply to medical debt itself. Paying a hospital bill with a general-purpose credit card converts the balance into credit card debt, which falls outside the law’s interest caps and collection limits. The scope of the protections and their enforcement will become clearer as facilities adjust billing systems and as related legal questions, including a federal preemption challenge in another state, play out.
Virginia’s Medical Debt Protection Act gives patients enforceable limits on how quickly and aggressively medical bills can be pursued, positioning the state among the strongest on medical debt as federal safeguards recede.
Frequently Asked Questions
When did Virginia’s Medical Debt Protection Act take effect? The law, House Bill 1725, took effect July 1, 2026, after being signed in May 2025 with a delayed effective date.
What does the law limit? It bars large health care facilities and medical debt buyers from charging interest or late fees until 90 days after the final invoice due date, then caps them at 3% per year, and restricts aggressive collection actions.
Who does the law apply to? It covers hospitals, large outpatient practices with at least $20 million in annual revenue, medical debt buyers, medical creditors, and medical debt collectors.
Can a hospital still garnish wages? Wage garnishment is permanently prohibited for patients who qualify for financial assistance. Others may face it only after a 120-day waiting period and 30 days’ written notice.
Does this apply outside Virginia? No. It is a Virginia state law, though it reflects a broader national trend of states enacting medical debt protections.
What happens if I pay with a credit card? Paying a medical bill with a general credit card can convert it into credit card debt, which is not covered by the law’s protections.
