Bill Introduced in Maryland to Overhaul Collection of Medical Debts

A bill has been introduced in both Houses of the Maryland state legislature that would create a threshold amount for which collection lawsuits can be filed while also establishing credit reporting guidelines, limiting the fees that can be collected for individuals who qualify for reduced or free medical care, limiting the amount of interest that can be charged, and imposing rules on payment plans.

The bill — HB0565 was introduced in the House of Delegates by Del. Lorig Charkoudian and SB0514 in the Senate by Sen. Brian Feldman.

Hospitals and healthcare providers would be barred from filing collection lawsuits if the amount owed by the patient is less than $1,000 or sending any bill to a collection agency if the amount owed was less than $1,000. The bill would also bar spouses from being held liable for any unpaid debt.

Hospitals and healthcare providers would also be prohibited from furnishing information to a credit reporting agency or filing a collection lawsuit within 180 days after providing the patient with his or her initial bill. They would also be required to document they attempted to work out a payment plan with a patient before placing an account with a debt collector.

Providers would also be barred from attaching liens to a patient’s primary residence or garnishing an individual’s wages if the patient qualified for reduced or free medical care.

The president of the Maryland Hospital Association expressed concerns about the bill.

“Maryland hospitals want everyone to know we’re committed to delivering the care people need without imposing financial hardship,” said Bob Atlas in a statement. “Hospitals already have taken many steps to ensure that people who are uninsured or whose insurance coverage has large gaps receive appropriate aid based on demonstrated need.

While we support the intent of the bill, there are some areas of concern. The complex provisions of this proposal demand careful thought to prevent unintended adverse consequences and get to the root of these issues. We will continue to listen to and to work with anyone who can offer sensible suggestions to improve the processes hospitals use to administer the payment process.”

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