Senate Bill 1598, also known as the "Freedom from Medical Debt Act," aims to alleviate medical debt for eligible residents of Tennessee. The bill mandates the state treasurer to contract with a nonprofit entity to facilitate the repayment of medical debts for individuals who meet specific criteria, including having a gross annual household income at or below 400% of the federal poverty level or owing medical debt that exceeds 5% of their income. The nonprofit is required to purchase medical debt at fair market value and ensure that any adverse information related to the debt is removed from the debtor's consumer report after repayment.

Additionally, the bill prohibits healthcare providers from reporting a patient's medical debt to consumer reporting agencies starting July 1, 2026, while allowing them to report to debt collections agencies. It establishes that violations of this part will be treated as violations of the Tennessee Consumer Protection Act, granting the attorney general enforcement authority. The bill also allows hospitals and ambulatory surgical treatment centers to transfer medical debt to a nonprofit for the purpose of debt elimination. The legislative intent includes recognizing $1 million in interest earnings for the state treasurer to support this initiative in the fiscal year 2026-2027. The act is set to take effect on July 1, 2026.