A proposal that would reshape how interest is applied to medical debt in Washington is now under consideration in the House. Washington Senate Bill 5993 cleared the Senate with a 29–19 vote and has been forwarded for additional review.
The measure centers on limiting the amount of interest that can be added to medical debt. An earlier draft would have eliminated prejudgment interest entirely. However, during committee review, lawmakers revised the language to instead establish a simple interest cap of 1% per year.
In addition to adjusting the rate, the Senate adopted language clarifying when the cap would apply. The 1% limit would only affect medical debt incurred after December 31, 2026, meaning existing balances would not fall under the new standard.
The cap would remain in place both before and after a court judgment is issued, ensuring the same interest limit applies throughout the collection process for qualifying debt.
The amended bill also outlines circumstances in which interest cannot be charged. Hospitals would be prohibited from adding or collecting interest while a patient is undergoing a required charity care screening. Interest would likewise be barred if a debt is ultimately found to be invalid, not legally owed, or otherwise unenforceable.
The legislation continues to draw attention from stakeholders, including members of the Northwest Collectors Association in Washington. Industry representatives have emphasized the need for lawmakers to weigh the potential effects on health care providers and the financial services sector, alongside the financial strain experienced by patients.
Next Steps
The proposal is scheduled to be reviewed by the Washington House Civil Rights & Judiciary Committee on February 18, where lawmakers will evaluate the revised language and determine how to proceed.
Author: Jennifer Evancic
Jennifer.Evancic@ResourceManagement.com
Jennifer Evancic is a third-party auditor valued by creditors and large organizations for her knowledge in call monitoring within the collections industry. With meticulous attention to detail and a firm grasp of regulatory requirements, she ensures compliance with clients’ criteria and state and federal regulations.
Jennifer audits collections calls, ensuring they meet client-specific criteria and comply with regulations, providing valuable insights and maintaining industry standards.
Beyond her auditing responsibilities, Jennifer takes the lead in organizing and facilitating monthly call calibrations. These sessions serve as a collaborative forum where clients and their vendors come together to discuss call monitoring results and address any findings or areas for improvement. Jennifer’s guidance fosters open communication and ensures alignment between clients and vendors, driving continuous improvement in collections practices.
Jennifer stays up-to-date with compliance and industry best practices by participating regularly in peer meetings, regulatory updates and industry webinars. This keeps her informed about emerging issues and ensures she remains a knowledgeable leader in collections compliance.
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