Summary of Bill 

The state of Washington passed a new law —ESSB 5480—which will change how medical debt can be reported and collected. Governor Bob Ferguson signed the bill into law Tuesday, April 22, planning to take effect on July 27, 2025. This bill aims to reduce long term financial damage caused by unpaid medical bills; however, it causes far-reaching implications for healthcare providers and collection agency partners.  

Key Facts 

Medical Debt Cannot Be Reported to Credit Agencies 

Medical debt may not be reported to any consumer credit reporting agency and if it is reported, the debt is void and unenforceable.  

Expanded Definition of Medical Debt 

The definition of “Medical Debt” now includes any amount owed to providers for medical services, products, or devices, whether the debt is past due or has already been paid. Medical debt excludes cosmetic surgery unless it is reconstructive following trauma or illness. From the original bill, the final version was narrowed, excluding certain detailed categories of medical equipment and credit card debt. 

Collection Agencies Must Follow Stricter Rules 

Mandatory first-notice disclosures must be detailed for medical debt along with a pause in collection upon request for itemized statements by the patient. Collection agencies cannot report medical debt to credit bureaus at any time.  

Consumer Protection Act Enforcement 

Violations of the credit reporting ban or collection disclosure requirements will be classified as unfair and deceptive trade practices and are subject to enforcement under RCW 19.86. This may result in fines, penalties, or litigation.  

Impact on Credit Reports 

All medical debt is excluded from credit reports maintained by consumer reporting agencies in Washington. This fact applies regardless of age or status of the debt.  

Final Takeaway 

ESSB 5480 introduces new compliance requirements that directly impact healthcare providers and their revenue cycle practices. While the law aims to address concerns around credit reporting and transparency, it places increased responsibility on providers to adjust their billing and collection workflows. State will remain committed to supporting clients through these changes. With the law taking effect on July 27, 2025, now is the time for providers to review processes and protocols to stay ahead of evolving state regulations.