EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1324*
HOUSE BILL 1324
J3 5lr3381
By: Delegates Spiegel, Amprey, Fair, Kaiser, Kaufman, Lopez, Palakovich Carr,
Shetty, Solomon, Tomlinson, Wells, and Woorman
Introduced and read first time: February 7, 2025
Assigned to: Health and Government Operations
A BILL ENTITLED
AN ACT concerning 1
Hospitals – Medical Debt Collection – Sale of Patient Debt to Nonprofit 2
Organizations 3
FOR the purpose of authorizing a hospital, under certain circumstances, to sell the medical 4
debt of patients if the debt is sold to a nonprofit organization for the purpose of 5
canceling the debt; requiring that a hospital’s financial policy require the hospital to 6
dismiss actions pending against a patient for the collection of debt that was sold and 7
prohibit the hospital from engaging in specified collection activities on patient debt 8
that was sold; and generally relating to hospital debt collection policies and the sale 9
of patient debt to nonprofit organizations. 10
BY repealing and reenacting, without amendments, 11
Article – Health – General 12
Section 19–214.2(a) 13
Annotated Code of Maryland 14
(2023 Replacement Volume and 2024 Supplement) 15
BY repealing and reenacting, with amendments, 16
Article – Health – General 17
Section 19–214.2(b), (f), (m), and (n) 18
Annotated Code of Maryland 19
(2023 Replacement Volume and 2024 Supplement) 20
BY adding to 21
Article – Health – General 22
Section 19–214.2(m) 23
Annotated Code of Maryland 24
(2023 Replacement Volume and 2024 Supplement) 25
2 HOUSE BILL 1324
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2
Article – Health – General 3
19–214.2. 4
(a) (1) Each hospital annually shall submit to the Commission: 5
(i) At times prescribed by the Commission, the hospital’s policy on 6
the collection of debts owed by patients; and 7
(ii) A report including: 8
1. The total number of patients by race or ethnicity, gender, 9
and zip code of residence against whom the hospital, or a debt collector used by the hospital, 10
filed an action to collect a debt owed on a hospital bill; 11
2. The total number of patients by race or ethnicity, gender, 12
and zip code of residence with respect to whom the hospital has and has not reported or 13
classified a bad debt; and 14
3. The total dollar amount of the charges for hospital services 15
provided to patients but not collected by the hospital for patients covered by insurance, 16
including the out–of–pocket costs for patients covered by insurance, and patients without 17
insurance. 18
(2) The Commission shall post the information submitted under paragraph 19
(1) of this subsection on its website. 20
(b) The policy submitted under subsection (a)(1) of this section shall: 21
(1) Provide for active oversight by the hospital of any contract for collection 22
of debts on behalf of the hospital; 23
(2) [Prohibit] EXCEPT AS PROVIDED IN SUBSECTION (M) OF THIS 24
SECTION, PROHIBIT the hospital from selling any debt; 25
(3) Prohibit the charging of interest on bills incurred by self–pay patients 26
before a court judgment is obtained; 27
(4) Describe in detail the consideration by the hospital of patient income, 28
assets, and other criteria; 29
(5) Prohibit the hospital from reporting to a consumer reporting agency or 30
filing a civil action to collect a debt within 180 days after the initial bill is provided; 31
HOUSE BILL 1324 3
(6) Describe the hospital’s procedures for collecting a debt; 1
(7) Describe the circumstances in which the hospital will seek a judgment 2
against a patient; 3
(8) In accordance with subsection (c) of this section, provide for a refund of 4
amounts collected from a patient or the guarantor of a patient who was later found to be 5
eligible for free care within 240 days after the initial bill was provided; 6
(9) If the hospital has obtained a judgment against or reported adverse 7
information to a consumer reporting agency about a patient who later was found to be 8
eligible for free care within 240 days after the initial bill was provided for which the 9
judgment was awarded or the adverse information was reported, require the hospital to 10
seek to vacate the judgment or strike the adverse information; 11
(10) Provide a mechanism for a patient to: 12
(i) Request the hospital to reconsider the denial of free or 13
reduced–cost care; 14
(ii) File with the hospital a complaint against the hospital or a debt 15
collector used by the hospital regarding the handling of the patient’s bill; and 16
(iii) Allow the patient and the hospital to mutually agree to modify 17
the terms of a payment plan offered under subsection (e) of this section or entered into with 18
the patient; [and] 19
(11) Prohibit the hospital from collecting additional fees in an amount that 20
exceeds the approved charge for the hospital service as established by the Commission for 21
which the medical debt is owed on a bill for a patient who is eligible for free or 22
reduced–cost care under the hospital’s financial assistance policy; 23
(12) REQUIRE THE HOSPITAL TO DISMISS ACTIONS P ENDING AGAINST 24
A PATIENT FOR COLLECTION OF DEBT T HAT WAS SOLD UNDER S UBSECTION (M) OF 25
THIS SECTION; AND 26
(13) PROHIBIT THE HOSPITAL FROM: 27
(I) ENGAGING IN COLLECTIO N ACTIVITIES ON 100% OF THE 28
OUTSTANDING AMOUNT O F THE COMMISSION–SET CHARGE FOR DEBT SOLD UNDER 29
SUBSECTION (M) OF THIS SECTION; AND 30
(II) COLLECTING ON JUDGMEN TS ENTERED INTO ON P ATIENT 31
DEBT THAT WAS SOLD U NDER SUBSECTION (M) OF THIS SECTION . 32
4 HOUSE BILL 1324
(f) (1) For at least 180 days after issuing an initial patient bill, a hospital may 1
not report adverse information about a patient to a consumer reporting agency or 2
commence civil action against a patient for nonpayment. 3
(2) A hospital shall report the fulfillment of a patient’s payment obligation 4
within 60 days after the obligation is fulfilled to any consumer reporting agency to which 5
the hospital had reported adverse information about the patient, INCLUDING IF THE DEB T 6
WAS SOLD UNDER SUBSE CTION (M) OF THIS SECTION . 7
(3) A hospital may not report adverse information to a consumer reporting 8
agency regarding a patient who at the time of service was uninsured or eligible for free or 9
reduced–cost care under § 19–214.1 of this subtitle. 10
(4) A hospital may not report adverse information about a patient to a 11
consumer reporting agency, commence a civil action against a patient for nonpayment, or 12
delegate collection activity to a debt collector: 13
(i) If the hospital was notified in accordance with federal law by the 14
patient or the insurance carrier that an appeal or a review of a health insurance decision 15
is pending within the immediately preceding 60 days; [or] 16
(ii) If the hospital has completed a requested reconsideration of the 17
denial of free or reduced–cost care that was appropriately completed by the patient within 18
the immediately preceding 60 days; OR 19
(III) IF THE HOSPITAL SOLD THE DEBT UNDER SUBSECTIO N (M) 20
OF THIS SECTION . 21
(5) If a hospital has reported adverse information about a patient to a 22
consumer reporting agency, the hospital shall instruct the consumer reporting agency to 23
delete the adverse information about the patient: 24
(i) If the hospital was informed by the patient or the insurance 25
carrier that an appeal or a review of a health insurance decision is pending, and until 60 26
days after the appeal is complete; or 27
(ii) Until 60 days after the hospital has completed a requested 28
reconsideration of the denial of free or reduced–cost care. 29
(M) (1) (I) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , A 30
HOSPITAL MAY SELL DE BT OWED TO THE HOSPI TAL BY A PATIENT FOR HOSPITAL 31
SERVICES TO A NONPROFIT ORGANIZATI ON THAT IS EXEMPT FRO M TAXATION 32
UNDER § 501(C)(3) OF THE INTERNAL REVENUE CODE FOR THE SOLE PURPOSE OF 33
CANCELING THE DEBT . 34
HOUSE BILL 1324 5
(II) THE CONTRACT BETWEEN THE HOSPITAL AND THE 1
NONPROFIT ORGANIZATI ON PURCHASING THE DEBT UNDER THIS SUBSECTIO N 2
SHALL: 3
1. STATE THAT THE SOLE PUR POSE OF THE SALE OF THE 4
DEBT IS TO CANCEL TH E DEBT; AND 5
2. INCLUDE A WRITTEN AGR EEMENT FROM THE 6
PATIENT ALLOWING THE DEBT TO BE SOLD . 7
(III) THE PATIENT IS NOT RE SPONSIBLE TO THE HOS PITAL OR 8
THE NONPROFIT ORGANI ZATION FOR ANY AM OUNT OF THE DEBT THA T IS SOLD 9
UNDER THIS SUBSECTIO N OR ANY INTEREST , FEES, OR COSTS ASSOCIATED WITH THE 10
DEBT OR THE SALE . 11
(2) DEBT SOLD UNDER THIS SUBSECTION MAY NOT BE SUBJECT T O 12
LEGAL RIGHTS OR CONT RACTUAL ASSIGNMENT L IMITS THAT PREVENT T HE SALE OF 13
THE DEBT, INCLUDING LIMITS DUE TO: 14
(I) CURRENT LIENS OR LEGAL PROCE SSES; 15
(II) AN EXPECTATION THAT THE DEBT WILL YIELD ADDITIONAL 16
REIMBURSEMENTS FROM A THIRD–PARTY PAYER; OR 17
(III) AN OPEN APPEAL WITH AN INSURANCE COMPANY . 18
(3) DEBT SOLD UNDER THIS SUBSECTION MAY BE SOLD WITH A 19
DISCOUNT OF COMMISSION CHARGES . 20
(4) THE COMMISSION SHALL TREA T THE AMOUNT OF PAYM ENTS TO 21
HOSPITALS UNDER THIS SUBSECTION AS AN OFF SET TO UNCOMPENSATED CARE 22
AMOUNTS REPORTED BY HOSPITALS. 23
[(m)] (N) The Commission shall review each hospital’s implementation of and 24
compliance with the hospital’s policies and the requirements of this section. 25
[(n)] (O) (1) On or before February 1 each year, beginning in 2023, the 26
Commission shall compile the information required under subsection (a) of this section and 27
prepare a medical debt collection report based on the compiled information. 28
(2) The report required under paragraph (1) of this subsection shall be: 29
(i) Made available to the public free of charge; and 30
6 HOUSE BILL 1324
(ii) Submitted to the Senate Finance Committee and the House 1
Health and Government Operations Committee in accordance with § 2–1257 of the State 2
Government Article. 3
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 4
October 1, 2025. 5