EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0765*
HOUSE BILL 765
J3 EMERGENCY BILL 5lr0749
SB 1006/24 – FIN
By: Delegate Ivey
Introduced and read first time: January 29, 2025
Assigned to: Health and Government Operations
A BILL ENTITLED
AN ACT concerning 1
Hospitals – Medical Debt Collection – Sale of Patient Debt 2
FOR the purpose of authorizing a hospital, under certain circumstances, to sell the medical 3
debt of patients if the debt is sold to a governmental unit or an entity under contract 4
with the unit for the purpose of canceling the debt; requiring that a hospital’s 5
financial policy require the hospital to dismiss actions pending against a patient for 6
the collection of debt that was sold and prohibit the hospital from engaging in 7
specified collection activities on patient debt that was sold; requiring a purchaser of 8
medical debt to notify the patient of certain information and to take certain other 9
actions; and generally relating to hospital debt collection policies and the sale of 10
patient debt. 11
BY repealing and reenacting, with amendments, 12
Article – Health – General 13
Section 19–214.2(a), (b), (f), (m), and (n) and 19–219(a)(3) 14
Annotated Code of Maryland 15
(2023 Replacement Volume and 2024 Supplement) 16
BY adding to 17
Article – Health – General 18
Section 19–214.2(m) 19
Annotated Code of Maryland 20
(2023 Replacement Volume and 2024 Supplement) 21
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 22
That the Laws of Maryland read as follows: 23
Article – Health – General 24
19–214.2. 25
2 HOUSE BILL 765
(a) (1) Each hospital annually shall submit to the Commission: 1
(i) At times prescribed by the Commission, the hospital’s policy on 2
the collection of debts owed by patients; and 3
(ii) A report including: 4
1. The total number of patients by race or ethnicity, gender, 5
and zip code of residence against whom the hospital, or a debt collector used by the hospital, 6
filed an action to collect a debt owed on a hospital bill; 7
2. The total number of patients by race or ethnicity, gender, 8
and zip code of residence with respect to whom the hospital has and has not reported or 9
classified a bad debt; [and] 10
3. The total dollar amount of the charges for hospital services 11
provided to patients but not collected by the hospital for patients covered by insurance, 12
including the out–of–pocket costs for patients covered by insurance, and patients without 13
insurance; AND 14
4. FOR HOSPITAL DEBTS OW ED BY PATIENTS OF TH E 15
HOSPITAL THAT THE HO SPITAL SOLD TO A GOVE RNMENTAL UNIT OR CON TRACTOR 16
UNDER SUBSECTION (M) OF THIS SECTION: 17
A. THE TOTAL DOLLAR AMOU NT OF THE DEBT SOLD BY 18
THE HOSPITAL FOR THE REPORTING YEAR ; 19
B. THE TOTAL DOLLAR AMOU NT PAID TO THE HOSPI TAL 20
BY THE UNIT OR CONTR ACTOR WH O PURCHASED THE DEBT ; AND 21
C. THE TOTAL NUMBER OF P ATIENTS WHOSE DEBT W AS 22
SOLD, IN FULL OR IN PART , TO THE UNIT OR CONTR ACTOR WHO PURCHASED THE 23
DEBT. 24
(2) The Commission shall post the information submitted under paragraph 25
(1) of this subsection on its website. 26
(b) The policy submitted under subsection (a)(1) of this section shall: 27
(1) Provide for active oversight by the hospital of any contract for collection 28
of debts on behalf of the hospital; 29
(2) [Prohibit] EXCEPT AS PROVIDED IN SUBSECTION (M) OF THIS 30
SECTION, PROHIBIT the hospital from selling any debt; 31
HOUSE BILL 765 3
(3) Prohibit the charging of interest on bills incurred by self–pay patients 1
before a court judgment is obtained; 2
(4) Describe in detail the consideration by the hospital of patient income, 3
assets, and other criteria; 4
(5) Prohibit the hospital from reporting to a consumer reporting agency or 5
filing a civil action to collect a debt within 180 days after the initial bill is provided; 6
(6) Describe the hospital’s procedures for collecting a debt; 7
(7) Describe the circumstances in which the hospital will seek a judgment 8
against a patient; 9
(8) In accordance with subsection (c) of this section, provide for a refund of 10
amounts collected from a patient or the guarantor of a patient who was later found to be 11
eligible for free care within 240 days after the initial bill was provided; 12
(9) If the hospital has obtained a judgment against or reported adverse 13
information to a consumer reporting agency about a patient who later was found to be 14
eligible for free care within 240 days after the initial bill was provided for which the 15
judgment was awarded or the adverse information was reported, require the hospital to 16
seek to vacate the judgment or strike the adverse information; 17
(10) Provide a mechanism for a patient to: 18
(i) Request the hospital to reconsider the denial of free or 19
reduced–cost care; 20
(ii) File with the hospital a complaint against the hospital or a debt 21
collector used by the hospital regarding the handling of the patient’s bill; and 22
(iii) Allow the patient and the hospital to mutually agree to modify 23
the terms of a payment plan offered under subsection (e) of this section or entered into with 24
the patient; [and] 25
(11) Prohibit the hospital from collecting additional fees in an amount that 26
exceeds the approved charge for the hospital service as established by the Commission for 27
which the medical debt is owed on a bill for a patient who is eligible for free or 28
reduced–cost care under the hospital’s financial assistance policy; 29
(12) REQUIRE THE HOSPITAL TO DISMISS ACTIONS P ENDING AGAINST 30
A PATIENT FOR COLLEC TION OF DEBT THAT WA S SOLD UNDER SUBSECT ION (M) OF 31
THIS SECTION; AND 32
(13) PROHIBIT THE HOSPITAL FROM: 33 4 HOUSE BILL 765
(I) ENGAGING IN COLLECTIO N ACTIVITIES ON 100% OF THE 1
OUTSTANDING AMOUNT O F THE COMMISSION–SET CHARGE FOR DEBT SOLD UNDER 2
SUBSECTION (M) OF THIS SECTION; AND 3
(II) COLLECTING ON JUDGMEN TS ENTERED INTO ON P ATIENT 4
DEBT THAT WAS SOLD U NDER SUBSECTION (M) OF THIS SECTION . 5
(f) (1) For at least 180 days after issuing an initial patient bill, a hospital may 6
not report adverse information about a patient to a consumer reporting agency or 7
commence civil action against a patient for nonpayment. 8
(2) A hospital shall report the fulfillment of a patient’s payment obligation 9
within 60 days after the obligation is fulfilled to any consumer reporting agency to which 10
the hospital had reported adverse information about the patient, INCLUDING IF THE DEB T 11
WAS SOLD UNDER SUBSE CTION (M) OF THIS SECTION . 12
(3) A hospital may not report adverse information to a consumer reporting 13
agency regarding a patient who at the time of service was uninsured or eligible for free or 14
reduced–cost care under § 19–214.1 of this subtitle. 15
(4) A hospital may not report adverse information about a patient to a 16
consumer reporting agency, commence a civil action against a patient for nonpayment, or 17
delegate collection activity to a debt collector: 18
(i) If the hospital was notified in accordance with federal law by the 19
patient or the insurance carrier that an appeal or a review of a health insurance decision 20
is pending within the immediately preceding 60 days; [or] 21
(ii) If the hospital has completed a requested reconsideration of the 22
denial of free or reduced–cost care that was appropriately completed by the patient within 23
the immediately preceding 60 days; OR 24
(III) IF THE HOSPITAL SOLD THE DEBT UNDER SUBSE CTION (M) 25
OF THIS SECTION . 26
(5) If a hospital has reported adverse information about a patient to a 27
consumer reporting agency, the hospital shall instruct the consumer reporting agency to 28
delete the adverse information about the patient: 29
(i) If the hospital was informed by the patient or the insurance 30
carrier that an appeal or a review of a health insurance decision is pending, and until 60 31
days after the appeal is complete; or 32
(ii) Until 60 days after the hospital has completed a requested 33
reconsideration of the denial of free or reduced–cost care. 34 HOUSE BILL 765 5
(M) (1) (I) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , A 1
HOSPITAL MAY SELL DEBT OWE D TO THE HOSPITAL BY A PATIENT FOR HOSPIT AL 2
SERVICES TO A GOVERN MENTAL UNIT OR AN EN TITY THAT IS UNDER C ONTRACT 3
WITH THE UNIT FOR TH E SOLE PURPOSE OF CA NCELING THE DEBT . 4
(II) THE CONTRACT BETWEEN THE HOSPITAL AND THE 5
GOVERNMENTAL UN IT OR CONTRACTOR PUR CHASING THE DEBT UND ER THIS 6
SUBSECTION SHALL STA TE THAT THE SOLE PURPOS E OF THE SALE OF THE DEBT IS 7
TO CANCEL THE DEBT . 8
(III) THE PATIENT IS NOT RE SPONSIBLE TO THE HOS PITAL, THE 9
GOVERNMENTAL UNIT , OR THE CONTRACTOR FO R ANY AMOUNT OF THE DEBT THAT 10
IS SOLD UNDER THIS S UBSECTION OR ANY INT EREST, FEES, OR COSTS ASSOCIATED 11
WITH THE DEBT OR THE SALE. 12
(2) DEBT SOLD UNDER THIS SUBSECTION: 13
(I) MUST BE FOR HOSPITAL SERVICES PROVIDED AT LEAST 2 14
YEARS BEFORE THE DAT E OF THE SALE; 15
(II) MAY NOT BE EXPECTED T O YIELD ADDITIONAL 16
REIMBURSEMENTS FROM A THIRD–PARTY PAYOR; 17
(III) MAY NOT BE SUBJECT TO AN OPEN APPEAL WITH AN 18
INSURANCE COMPANY ; AND 19
(IV) MUST BE FOR AN INDIVI DUAL WHOSE FAMILY IN COME IS AT 20
OR BELOW 500% OF THE FEDERAL POVERTY LEVEL OR WHO HAS MEDICAL DEBT 21
EXCEEDING 5% OF THE INDIVIDUAL ’S FAMILY INCOME , AS DETERMINED BY THE 22
GOVERNMENTAL UNIT OR CONTRACTOR PURCHASIN G THE DEBT. 23
(3) DEBT SOLD UNDER THIS SUBSECTION MAY BE SO LD WITH A 24
REDUCTION OF COMMISSION CHARGES . 25
(4) THE COMMISSION SHALL TREA T THE AMOUNT OF PAYM ENTS TO 26
HOSPITALS UNDER THIS SUBSECTION AS AN OFF SET TO UNCOMPENSATED CARE 27
AMOUNTS REPORTED BY HOSPITALS. 28
(5) THE PURCHASER OF THE DEBT SHALL: 29
(I) NOTIFY THE PATIENT TH AT THE DEBT HAS BEEN 30
CANCELED; AND 31
6 HOUSE BILL 765
(II) IF THE HOSPITAL OBTAI NED A JUDGMENT AGAIN ST THE 1
PATIENT OR REPORTED ADVERSE INFORMATION TO A CONSUMER REPORT ING 2
AGENCY ABOUT THE PAT IENT, SEEK TO VACATE THE J UDGMENT OR STRIKE TH E 3
ADVERSE INFORMATION . 4
[(m)] (N) The Commission shall review each hospital’s implementation of and 5
compliance with the hospital’s policies and the requirements of this section. 6
[(n)] (O) (1) On or before February 1 each year, beginning in 2023, the 7
Commission shall compile the information required under subsection (a) of this section and 8
prepare a medical debt collection report based on the compiled information. 9
(2) The report required under paragraph (1) of this subsection shall be: 10
(i) Made available to the public free of charge; and 11
(ii) Submitted to the Senate Finance Committee and the House 12
Health and Government Operations Committee in accordance with § 2–1257 of the State 13
Government Article. 14
19–219. 15
(a) The Commission may review the costs, and rates, quality, and efficiency of 16
facility services, and make any investigation that the Commission considers necessary to 17
assure each purchaser of health care facility services that: 18
(3) [The] EXCEPT AS PROVIDED IN § 19–214.2(M) OF THIS SUBTITLE , 19
THE rates are set equitably among all purchasers or classes of purchasers without undue 20
discrimination or preference. 21
SECTION 2. AND BE IT FURTHER ENACTED, That this Act is an emergency 22
measure, is necessary for the immediate preservation of the public health or safety, has 23
been passed by a yea and nay vote supported by three–fifths of all the members elected to 24
each of the two Houses of the General Assembly, and shall take effect from the date it is 25
enacted. It shall remain effective through December 31, 2027, and, at the end of December 26
31, 2027, this Act, with no further action required by the General Assembly, shall be 27
abrogated and of no further force and effect. 28