What Providers Need to Know About 4 New Patient Financing Shifts

Newly enacted and advancing legislation this quarter reflects four clear directions: 

1. More prescriptive payment-plan mandates: income-based plans, minimum terms, forgiveness after a set period, and collection pauses while a plan is current (DC, Pennsylvania). 
2. Financial-assistance screening and notice required before collections can begin (Indiana, Illinois). 
3. Interest-rate caps on medical debt / payment plans: they constrain interest-charging competitors (Louisiana, Virginia, Rhode Island). 
4. State enforcement emerging as a parallel channel alongside legislation (Washington). 

Patient billing legislation continued moving at a steady pace in the second quarter of 2026. Where Q1 activity centered on financial assistance screening, income-based payment plans, and collections timing, Q2 continued building on those trends through more prescriptive payment plan requirements, expanded financial assistance obligations, additional interest rate caps, and increased state enforcement activity. Here are four developments providers should have on their radar. 

1. More prescriptive payment plan requirements 

Relevant Bills: D.C. B26-0438; Pennsylvania SB 371 

Payment plan requirements got more specific this quarter. D.C. and Pennsylvania both advanced bills that go further than the income-based standards several states set earlier in the year. Pennsylvania’s bill would require hospitals to negotiate a reasonable payment plan before initiating collections, forgive any remaining balance after 36 monthly payments, and pause collection activity entirely while a patient stays current. D.C.’s bill requires facilities to offer income-based payment plans to low-income patients. Providers offering payment plans will want to review whether their current structure meets these emerging standards. 

For providers, this introduces: 

• Minimum term and forgiveness requirements that limit how payment plans can be structured 

• A pause on collections activity while a patient remains current on a plan 
• Growing pressure to standardize payment plan terms rather than set them case by case 

2. Financial assistance screening and notice required before collections 

Relevant Bills: Indiana HEA 1271; Illinois PA 104-0521 and PA 104-0490 

Indiana and Illinois introduced requirements that a patient be screened for financial assistance and given proper notice before a provider can move an account to collections. Indiana’s law requires hospitals to disclose payment assistance programs and notify patients before collections begin. Illinois now requires hospitals to use a uniform Attorney General financial assistance form, with approvals valid for at least 12 months, and bars liens on a patient’s primary residence. Together, these add a documented checkpoint between an aged balance and a collections referral. 

For providers, this introduces: 

• A required screening and notice checkpoint immediately before any collections referral 

• Standardized financial assistance forms with longer approval windows in some states 

• Additional documentation providers need to keep on hand to demonstrate compliance 

3. Interest rate caps on medical debt and payment plans 

Relevant Bills: Louisiana Act 897 (SB 414); Virginia HB 1725 

Louisiana and Virginia both enacted interest rate caps on medical debt this quarter. Louisiana caps interest on medical debt at 3 percent, though the law carves out open-end and closed-end credit from federally insured institutions. Virginia bars interest and late fees on medical debt until 90 days after the final invoice, then caps them at 3 percent per year, and also requires 30 days notice before extraordinary collection actions. Rhode Island already has a similar cap in place, limiting medical debt interest to a floating rate tied to the one-year Treasury yield, with a floor of 1.5 percent and a ceiling of 4 percent per year. Together, these caps apply pressure to any financing product that charges interest, while reinforcing the position of 0% financing models already below the threshold. 

For providers, this introduces: 

• A ceiling on interest that can be charged on medical debt and payment plans 

• Added due diligence when evaluating financing partnerships in affected states 

• New notice and waiting period requirements tied to collection timing 

4. State enforcement emerging alongside new legislation 

Relevant Development: Washington Attorney General consent decree, April 2026 

Not every development this quarter came from a new bill. In Washington, the Attorney General secured a consent decree requiring a medical debt collector to provide roughly $1.5 million in relief after collection notices sent to about 400,000 residents were found to be missing required disclosure language. This shows that compliance risk extends to how existing rules are being enforced, not just which new bills are moving through statehouses. 

For providers, this introduces: 

• Enforcement risk tied to existing disclosure and notice requirements, not just new legislation 

• A reminder that regulatory exposure can increase without any new bill being signed 

• Greater incentive to audit current collection notices and disclosures for compliance gaps 

What this means going forward 

Q2 activity continued building on the direction established earlier in the year. A few themes are worth tracking as the year continues. Payment plan requirements are becoming more detailed and less flexible for providers to define independently. Screening and notice requirements now apply at multiple points across the billing cycle. Interest rate caps continue expanding across states. Enforcement of existing rules is increasing alongside new legislation, which means compliance is an ongoing effort rather than a one-time policy update. 

Also worth noting, the CFPB’s medical debt credit reporting rule was vacated in 2025 and its state preemption position reversed. With less federal involvement, states are likely to continue leading on this issue.  

The takeaway: Providers relying on established payment plan structures should review them against this quarter’s changes. Many of these bills are still advancing and may pick up amendments before final passage, but the direction is consistent enough to start preparing now.