Indiana SB 85 Would Promote Charity Care, Impact Collections

A bill in Indiana that would promote charity care and impact bad debt collections has recently been referred to the House after passing the Senate. Indiana SB 85, introduced in late 2025, would authorize the attorney general to enforce provisions concerning health care debt wage garnishment and principal residence lien restrictions and establish a complaint process.

Hospitals would be required to:

• Offer a person who meets certain income guidelines and has received health services the opportunity to pay the charges through a payment plan that satisfies certain requirements.
• Develop a written notice about a charity care program operated by the hospital, provide the notice to patients, and post the notice.
• Include certain information concerning financial assistance on a billing statement.
• Requires a hospital that reports an annual gross patient revenue of at least $20,000,000 to provide written notice and information to a person who has requested an eligibility determination concerning a payment plan or charity care.

With Indiana SB 85, hospitals would be required to offer payment plans to patients earning less than 400% of the federal poverty level (FPL), or if their bill amount is more than 10% of their monthly household income. Those payment plans would have to extend for at least 24 months, and any one monthly payment would not be allowed to exceed 10% of the patient’s gross monthly household income. Interest rates would also be capped to 3% annually and if insurance coverage is denied, those payments would be paused while the patient appeals the decision for up to 120 days, or until the appeals process is exhausted.

Collections would also be impacted by Indiana SB 85 as collectors could not garnish wages of patients making less than 200% of the FPL and caps garnishments at 10% of their weekly disposable income for those above the 200% threshold. Current law allows for garnishment of up to 25% of a patient’s wages.

Indiana SB 85 would also block liens or forced sales of patients’ homes over medical debt but doesn’t prevent debt collectors from filing lawsuits against patients. Americollect will continue to track this bill as it enters the Indiana House.