By virtue of not signing it into law or vetoing it while it sat on the governor’s desk for 30 days, healthcare debt collection legislation in Maryland has become law, which, while not as restrictive as it was when it was introduced, will still require healthcare providers and debt collectors working medical debt accounts to make changes to their processes going forward. Most of the bill went into effect on June 1. The remaining portion is due to go into effect on January 1, 2022.
SB 514 and HB 565 “put sensible guardrails on hospital medical debt collection practices,” said state Sen. Brian Feldman, one of the sponsors of the bill, in a post on his Facebook page. “No one should face financial ruin or become homeless simply for getting sick or seeking medical care.”
The law requires acute care hospitals and chronic care hospitals to develop financial assistance policies that offer free medically necessary care to patients with family incomes below 200% of the federal poverty level and reduced-cost care to those tho have incomes above 200% of the federal poverty level. Hospitals will also have to provide a report every year detailing the total number of patients that were sued — either by the hospital or a debt collector — to collect on an unpaid hospital bill, the number of patients to whom the hospital has and has not reported or classified a bad debt, and the total dollar amount of charges provided but not paid by patients. That information is to be posted publicly to the website for the Maryland Health Care Commission.
Hospitals are also barred from selling debt, charging interest on a bill incurred by a self-pay patient before a judgment is obtained, and prohibited from reporting unpaid debts to credit reporting agencies or filing a civil action to collect on unpaid debts for 180 days after the initial bill is provided.
Hospitals are also barred from placing certain accounts with debt collectors, such as though where the hospital was notified that an appeal or review of a health insurance decision is pending.
Debt collectors will be required to have explicitly authorized contracts to collect debts from facilities regulated by the law, and will be required to abide by the hospitals’ credit and collection policy.