Indiana's Senate Bill 225 (Public Law 124, effective July 1, 2026) blocks hospitals from collecting medical debt—through lawsuits, wage garnishment, credit reporting, or liens—when the hospital is not complying with state pricing transparency requirements. If your hospital failed to post required price information online, the state law gives you a legal shield against debt collection efforts for care received during that noncompliance period. This protection targets a gap in patient safety: hospitals are required by state law to disclose what procedures cost, but had faced no penalty if they refused. With approximately $2.2 billion in medical debt owed by Indiana residents, the law attempts to make pricing transparency enforceable by disarming debt collection as a threat.
Table of Contents
- What Types of Collection Are Blocked
- What Hospitals Must Post and How Compliance Is Checked
- How to Defend Yourself Against Collection
- Who Can Enforce This Law and What Remains Your Responsibility
- Frequently Asked Questions
What Types of Collection Are Blocked
The collection ban is comprehensive. Under the law, a hospital, debt collector, or third-party agency cannot pursue any collection method—including filing lawsuits, garnishing wages, reporting debt to credit agencies, placing liens on property, or selling the debt to another collector—for medical services provided while the hospital was out of compliance with pricing transparency rules.
The protection applies only to debt incurred during periods when the Indiana Department of Health officially determined the hospital was noncompliant. Once a hospital comes into compliance, the collection ban no longer applies to future debt. This means older debts from noncompliant periods remain protected, but debts from compliant periods do not.
What Hospitals Must Post and How Compliance Is Checked
Indiana law requires hospitals to post pricing information online for at least the 70 shoppable services specified in federal CMS rules, plus the 30 most common services the hospital provides. "Shoppable services" are procedures—like MRI scans or knee X-rays—that patients can typically schedule in advance and comparison-shop between providers. Posting means listing the cash price and the negotiated rates with major insurers.
The Indiana Department of health checks each hospital's compliance twice a year and notifies hospitals of their status. As of early 2026, roughly 70% of Indiana hospitals fully comply with federal price transparency requirements, leaving approximately 30% subject to potential collection restrictions. This means a significant portion of Indiana residents may have leverage against bills from hospitals that have not posted the required data.
How to Defend Yourself Against Collection
If a hospital or debt collector attempts to collect from you, you can raise the hospital's noncompliance as an affirmative defense in court. This legal argument shifts the burden: you do not have to prove you owe nothing; instead, you argue that the hospital cannot collect because it violated state law during the period you received care.
To use this defense, you will need to document when you received the service and show that the Indiana Department of Health found the hospital noncompliant during that time. Keep records of bills, statements, and any collection notices. If you are sued or contacted by a debt collector, respond to the suit (do not ignore it) and mention the hospital's noncompliance in your court filing or answer. Consulting an attorney is advisable if a lawsuit is filed, as court procedures vary and errors can result in a judgment against you.
Who Can Enforce This Law and What Remains Your Responsibility
The Indiana Attorney General has authority to suspend a hospital's collection privileges and bring enforcement actions against hospitals that attempt collection during noncompliance. If you encounter collection attempts from a noncompliant hospital, you can file a complaint with the Attorney General's office in addition to using the defense in court. The law does not erase the debt itself or require the hospital to forgive it; it only blocks collection methods.
Once a hospital achieves compliance with pricing transparency, it can resume collection efforts on that debt. The law also does not cover debt from hospitals that *are* compliant, and it does not address other debts you may owe—only those tied to a noncompliant hospital's noncompliant period. If you have a payment plan or insurance coverage dispute, those issues are separate and the law does not address them.
Frequently Asked Questions
How do I know if my hospital is compliant or noncompliant?
The Indiana Department of Health publishes compliance status semiannually. Contact your hospital's billing department or the Department of Health directly to request your hospital's compliance determination for the specific date you received care.
Can I be sued even if the hospital is noncompliant?
Yes, a hospital can file a lawsuit, but you have a legal defense to raise in court. Do not ignore a lawsuit—respond to it and cite the hospital's noncompliance in your answer.
What if the hospital is now compliant but was noncompliant when I received care?
The law protects debt from the noncompliant period. Once compliant, the hospital can resume collection, so the timing of compliance matters.