New Financial Assistance for Civilians Treated in Military Hospitals

The Department of Defense (DoD) operates a worldwide network of military treatment facilities, including 45 hospitals and 606 clinics. These facilities are not open to civilians for routine care. However, many of these facilities, particularly the 40+ that provide emergency services and 14 trauma centers, provide critical care to civilians who are not eligible for military health services. Annually, more than 20,000 civilians receive treatment in these facilities.

The DoD aggressively pursues collection for medical services provided to civilians at military treatment facilities pursuant to its authority under the Debt Collection Improvement Act. Unpaid medical debts that are more than 180 days delinquent are transferred to the Treasury Department, often leading to severe financial consequences for patients, including the seizure of tax returns and administrative wage garnishment.

This article describes new regulations that can provide pathways to financial assistance for some civilian patients: discounts, repayment agreements, and waivers.  The article also sets out the eligibility requirements for financial assistance and how to apply for assistance. For information on financial assistance regarding other medical providers and other medical debt issues, see NCLC’s Collection Actions Chapter 9.

The Legal Foundation for Changes

The National Defense Authorization Act for Fiscal Year 2023 provided the DoD with new authority to:

• Apply a sliding scale fee for individuals not eligible for military health services;
• Stop balance billing of insured patients, limiting their responsibility to only copayments, coinsurance, and deductibles; and
• Waive fees entirely if the medical procedure significantly enhanced the skills of the healthcare providers.

These changes were formally implemented with the finalization of regulations on February 6, 2026, which amended 32 C.F.R. part 220 (91 Fed. Reg. 5303 (Feb. 6, 2026)). The new rules took effect on March 9, 2026.

Required DoD Form to Obtain Discounts, Waivers; Private Insurance Coverage

Whether or not they have health insurance, all patients must file Third Party Collection Program/Medical Services Account/Other Health Insurance (DD Form 2569). Patients who do not file this form are not eligible for discounts or waivers.

For patients with health insurance, DoD will submit insurance claims and suspend further collection until the claim has been processed or 120 days have passed. DoD will then bill the patient for “any remaining copays, co-insurance, deductibles, nominal fees and non-covered services.”

Discounts for Civilian Patients

The new regulations establish the Military Health System’s Modified Payment and Waiver Program (MPWP). Civilians that are not DoD beneficiaries and who received care on or after June 21, 2023 are eligible to apply for the MPWP.

The Military Health System maintains a website with general information about MPWP, a page that answers frequently asked questions, and an eligibility calculator. Information about the MPWP must also be posted at military treatment facilities. Information about how to apply and the application deadline must also be included with patient invoices.

How to Apply for Discounts

Patients seeking a discount under the MPWP must complete and sign the following forms:

• Request for Medical Debt Discount, Military Health System Modified Payment and Waiver Program (DD Form 3201) and
• Third Party Collection Program/Medical Services Account/Other Health Insurance (DD Form 2569).

Applicants must also gather and submit the following financial documentation:

• Most recent federal tax return;
• Last two paystubs; and
• The medical bill for which the discount is being sought.

These documents and the two forms must all be mailed to:

DHA Debt Adjudication Office/UBO

3130 General Hudnell Dr., Suite 416

San Antonio, TX 78226-4417 

DD Form 3201 specifies that the application must be submitted “within 90 days of the date on [the] medical invoice.” However, the regulations state that patients may still apply after their account has been transferred to Treasury and does not specify the 90-day deadline listed in the form.

Applicants typically receive a written notification of the decision on the MPWP application within about 30 business days.

Patients may “request reconsideration” for MPWP if their financial circumstances have significantly changed.

Available Discounts

Patients that successfully apply for a MPWP discount are eligible for the following discounts based on the patient’s household income relative to the Federal Poverty Guidelines (FPG).

Voluntary Repayment Agreements

Whether or not patients receive a discount, they can sign up for a Voluntary Repayment Agreement by completing Request for Medical Debt Discount, Military Health System Modified Payment and Waiver Program (DD Form 3201).

Installment Period: Up to 72 months

Minimum Monthly Payment: $25

Interest Status: Interest free

If the patient does not pay as agreed, the unpaid balance will be transferred to the Treasury’s collection program, which may add interest, late payment penalties, and administrative charges.

Waivers of Patients’ Bills

Beyond the income-based discount, a patient’s bill may be fully or partially waived if the care provided enhanced the knowledge, skills, and abilities of health care providers at the military treatment facility.

To be considered for a waiver, the patient must first apply for a discount using the process outlined above. After receiving the discounted bill, the patient must again submit Request for Medical Debt Discount, Military Health System Modified Payment and Waiver Program (DD Form 3201) to specifically apply for a waiver.

Decisions on granting a waiver are discretionary, with final authority resting with the Director of the Defense Health Agency. Decisions are usually issued within 90 days.

The DoD will report waivers (but not discounts) to the IRS, which may result in taxable income to the patient.