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Maryland Medical Debt Collection Requirements Bill Awaits Governor’s Signature


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The bill, passed unanimously in the state House and Senate, includes requirements for hospitals to submit debt collection policies to the state each year and prohibits certain practices when collecting medical debt. If signed by the governor, the bill would take effect Jan. 1, 2022.

4/7/2021 10:30

Maryland could become the latest state to have a medical debt collection bill on the books after SB 514 and HB 565 were approved 47-0 and 134-0 in the state’s Senate and House, respectively.

The bill includes requirements for hospital debt collection policies and payment arrangements, according to the bill’s fiscal and policy note.

It also prohibits a hospital from taking specified actions when collecting debt.

A hospital must annually submit its policy on the collection of debts owed by patients as well as a specified report to the Health Services Cost Review Commission (HSCRC), which HSCRC must compile into an annual medical debt collection report.

By Dec. 1, 2021, the Maryland Health Care Commission (MHCC) must examine and report on the feasibility of using the state-designated Health Information Exchange (HIE) to support determination of patients’ financial status for determining eligibility for free or reduced-cost care or an income-based payment plan.

By Jan. 1, 2022, HSCRC must develop and report on guidelines for an income-based payment plan and study the impact on uncompensated care of providing specified refunds or requiring hospitals to forgive specified judgments or strike specified adverse information.

The bill generally takes effect Jan. 1, 2022; however, provisions related to HSCRC and MHCC study and reporting requirements take effect June 1, 2021.

When attempting to collect debt owed on a hospital bill, a hospital may not, among other things:

  • Request a lien against a patient’s primary residence.
  • Request the issuance of or take action causing a court to issue a body attachment or an arrest warrant against a patient.
  • Request a writ of garnishment of wages or file an action resulting in an attachment of wages if the patient is eligible for free or reduced-cost care.
  • Make a claim against the estate of a deceased patient if the deceased patient was known by the hospital to be eligible for free care or if the value of the estate after tax obligations are fulfilled is less than half of the debt owned (however, a hospital may offer the family of the deceased patient the ability to apply for financial assistance).
  • File an action against a patient or give notice to a patient until after 180 days after the initial bill was provided.
  • File an action against a patient until the hospital determines whether the patient is eligible for free or reduced-cost care.

If a hospital delegates collection activity to a debt collector, the hospital and the debt collector must be jointly and severally responsible for meeting the hospital debt collection requirements.

The Maryland legislature is scheduled to adjourn April 12, and May 12 is the final date for an extended legislative session. May 2 is the final date to present bills to Gov. Larry Hogan, and they must be signed by June 1.

New Mexico Gov. Michelle Lujan Grisham recently signed a medical debt bill and Maryland’s bill awaits a signature from Gov. Larry Hogan by June 1.

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