EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0981*
SENATE BILL 981
J3 5lr2417
CF HB 268
By: Senator Hershey
Introduced and read first time: January 28, 2025
Assigned to: Finance
A BILL ENTITLED
AN ACT concerning 1
Hospitals – Financial Assistance and Collection of Debts – Policies 2
FOR the purpose of altering provisions of law related to a hospital’s financial assistance 3
and collection of debts policies; specifying the percentage by which a hospital is 4
required to reduce a patient’s out–of–pocket expenses under certain circumstances; 5
adding to the notice requirements relating to a hospital’s financial assistance policy; 6
prohibiting a hospital from filing a civil action to collect a debt against a patient 7
whose outstanding debt is at or below a certain amount; altering the monthly 8
payment amount for an income–based payment plan for medical debt; increasing the 9
number of days before interest payments on medical debt may be assessed; 10
increasing the number of days before a hospital is authorized to commence civil 11
action against a patient to collect a debt; and generally relating to hospital financial 12
assistance and collection of debts policies. 13
BY repealing and reenacting, with amendments, 14
Article – Health – General 15
Section 19–214.1 and 19–214.2 16
Annotated Code of Maryland 17
(2023 Replacement Volume and 2024 Supplement) 18
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
That the Laws of Maryland read as follows: 20
Article – Health – General 21
19–214.1. 22
(a) (1) In this section the following words have the meanings indicated. 23
(2) “Financial hardship” means medical debt, incurred by a family over a 24
12–month period, that exceeds 25% of family income. 25 2 SENATE BILL 981
(3) “Medical debt” means out–of–pocket expenses, [excluding] INCLUDING 1
co–payments, coinsurance, and deductibles, for medical costs [billed by a hospital]. 2
(4) “MEDICALLY NECESSARY C ARE” MEANS CARE THAT IS : 3
(I) DIRECTLY RELATED TO D IAGNOSTIC, PREVENTIVE, 4
CURATIVE, PALLIATIVE, REHABILITATI VE, OR AMELIORATIVE TREA TMENT OF AN 5
ILLNESS, INJURY, DISABILITY, OR HEALTH CONDITION ; 6
(II) CONSISTENT WITH ACCEP TED STANDARDS OF GOO D 7
MEDICAL PRACTICE ; AND 8
(III) NOT PRIMARILY FOR THE CONVENIENCE OF THE P ATIENT, 9
THE PATIENT’S FAMILY, OR THE PROVIDE R. 10
(b) (1) The Commission shall require each acute care hospital and each chronic 11
care hospital in the State under the jurisdiction of the Commission to develop a financial 12
assistance policy for providing free and reduced–cost care to patients who lack health care 13
coverage or whose health care coverage does not pay the full cost of the hospital bill. 14
(2) The financial assistance policy shall provide, at a minimum: 15
(i) Free medically necessary care to patients with family income at 16
or below 200% of the federal poverty level, calculated at the time of service or updated, as 17
appropriate, to account for any change in financial circumstances of the patient that occurs 18
within 240 days after the initial hospital bill is provided; 19
(ii) Reduced–cost medically necessary care to low–income patients 20
with family income above 200% of the federal poverty level, calculated at the time of service 21
or updated, as appropriate, to account for any change in financial circumstances of the 22
patient that occurs within 240 days after the initial hospital bill is provided; 23
(iii) [A payment plan that is available to uninsured patients with 24
family income between 200% and 500% of the federal poverty level] A DESCRIPTION OF 25
THE AVAILABILITY OF THE PAYMENT PLAN REQ UIRED UNDER § 19–214.2(D) OF THIS 26
SUBTITLE; and 27
(iv) A mechanism for a patient to request the hospital to reconsider 28
the denial of free or reduced–cost care that includes in the request: 29
1. The Health Education and Advocacy Unit is available to 30
assist the patient or the patient’s authorized representative in filing and mediating a 31
reconsideration request; and 32
SENATE BILL 981 3
2. The address, phone number, facsimile number, e–mail 1
address, mailing address, and website of the Health Education and Advocacy Unit. 2
(3) (i) The Commission by regulation may establish income thresholds 3
higher than those under [paragraph] PARAGRAPHS (2) AND (4) of this subsection. 4
(ii) In establishing income thresholds that are higher than those 5
under paragraph (2) of this subsection for a hospital, the Commission shall take into 6
account: 7
1. The patient mix of the hospital; 8
2. The financial condition of the hospital; 9
3. The level of bad debt experienced by the hospital; and 10
4. The amount of charity care provided by the hospital. 11
(4) [(i)] Subject to [subparagraphs (ii) and (iii) of this paragraph] 12
INCOME THRESHOLDS SE T UNDER PARAGRAPH (3) OF THIS SUBSECTION , the 13
financial assistance policy required under this subsection shall provide reduced–cost 14
medically necessary care to patients with family income below 500% of the federal poverty 15
level who have a financial hardship. 16
[(ii) A hospital may seek and the Commission may approve a family 17
income threshold that is different than the family income threshold under subparagraph 18
(i) of this paragraph. 19
(iii) In establishing a family income threshold that is different than 20
the family income threshold under subparagraph (i) of this paragraph, the Commission 21
shall take into account: 22
1. The median family income in the hospital’s service area; 23
2. The patient mix of the hospital; 24
3. The financial condition of the hospital; 25
4. The level of bad debt experienced by the hospital; 26
5. The amount of charity care provided by the hospital; and 27
6. Other relevant factors.] 28
(5) (I) If a patient is eligible for reduced–cost medically necessary care 29
under [paragraphs] PARAGRAPH (2)(ii) [and (4)] of this subsection, the hospital shall 30 4 SENATE BILL 981
[apply the reduction that is most favorable to the patient], AT A MINIMUM, REDUCE THE 1
PATIENT’S OUT–OF–POCKET EXPENSES FOR THE REGULATED HOSPIT AL SERVICE: 2
1. FOR A PATIENT WITH FA MILY INCOME OF AT LE AST 3
201% BUT NOT MORE THAN 250% OF THE FEDERAL POVER TY LEVEL, BY 75%; AND 4
2. FOR A PATIENT WITH FA MILY INCOME OF MORE THAN 5
250% BUT NOT MORE THAN 300% OF THE FEDERAL POVER TY LEVEL, BY 60%. 6
(II) IF A PATIENT IS ELIGIBLE FOR REDUCED –COST MEDICALLY 7
NECESSARY CARE UNDER PARAGRAPH (4) OF THIS SUBSECTION , THE HOSPITAL 8
SHALL, AT A MINIMUM , REDUCE THE PATIENT ’S OUT–OF–POCKET EXPE NSES FOR 9
THE REGULATED HOSPIT AL SERVICE: 10
1. FOR A PATIENT WITH FA MILY INCOME OF AT LE AST 11
201% BUT NOT MORE THAN 250% OF THE FEDERAL POVER TY LEVEL, BY 75%; 12
2. FOR A PATIENT WITH FA MILY INCOME OF MORE THAN 13
250% BUT NOT MORE THAN 300% OF THE FEDERAL POVERTY LEVEL , BY 60%; 14
3. FOR A PATIENT WITH FA MILY INCOME OF MORE THAN 15
300% BUT NOT MORE THAN 350% OF THE FEDERAL POVER TY LEVEL, BY 50%; 16
4. FOR A PATIENT WITH FA MILY INCOME OF MORE THAN 17
350% BUT NOT MORE THAN 400% OF THE FEDERAL POVER TY LEVEL, BY 45%; 18
5. FOR A PATIENT WITH FA MILY INCOME OF MORE THAN 19
400% BUT NOT MORE THAN 450% OF THE FEDERAL POVER TY LEVEL, BY 40%; AND 20
6. FOR A PATIENT WITH FA MILY INCOME OF MORE THAN 21
450% BUT NOT MORE THAN 500% OF THE FEDERAL POVER TY LEVEL, BY 35%. 22
(6) If a patient has received reduced–cost medically necessary care due to 23
a financial hardship, the patient or any immediate family member of the patient living in 24
the same household: 25
(i) Shall remain eligible for reduced–cost medically necessary care 26
when seeking subsequent care at the same hospital during the 12–month period beginning 27
on the date on which the reduced–cost medically necessary care was initially received; and 28
(ii) To avoid an unnecessary duplication of the hospital’s 29
determination of eligibility for free and reduced–cost care, shall inform the hospital of the 30
patient’s or family member’s eligibility for the reduced–cost medically necessary care. 31
SENATE BILL 981 5
(7) The financial assistance policy required under this subsection shall 1
provide presumptive eligibility for free medically necessary care to a patient who is not 2
eligible for the Maryland Medical Assistance Program or Maryland Children’s Health 3
Program and: 4
(i) Lives in a household with [children] A CHILD WHO IS enrolled 5
in the free and reduced–cost meal program AND IS ELIGIBLE FOR THE PROGRAM BASED 6
ON THE HOUSEHOLD ’S INCOME; 7
(ii) Receives benefits through the federal Supplemental Nutrition 8
Assistance Program; 9
(iii) Receives benefits through the State’s Energy Assistance 10
Program; 11
(iv) Receives benefits through the federal Special Supplemental Food 12
Program for Women, Infants, and Children; or 13
(v) Receives benefits from any other social service program as 14
determined by the Department and the Commission. 15
(8) (i) A hospital may consider only household monetary assets in 16
excess of $100,000 when determining eligibility for free and reduced–cost care under the 17
hospital’s financial assistance policy. 18
(ii) If a hospital considers household monetary assets under 19
subparagraph (i) of this paragraph, retirement assets that the Internal Revenue Service 20
has granted preferential tax treatment as a retirement account, including 21
deferred–compensation plans qualified under the Internal Revenue Code or nonqualified 22
deferred–compensation plans shall be excluded. 23
(9) (i) In determining the family income of a patient, a hospital shall 24
apply a definition of household size that consists of the patient and, at a minimum, the 25
following individuals: 26
1. A spouse, regardless of whether the patient and spouse 27
expect to file a joint federal or State tax return; 28
2. Biological children, adopted children, or stepchildren; and 29
3. Anyone for whom the patient claims a personal exemption 30
in a federal or State tax return. 31
(ii) For a patient who is a child, the household size shall consist of 32
the child and the following individuals: 33
6 SENATE BILL 981
1. Biological parents, adopted parents, or stepparents or 1
guardians; 2
2. Biological siblings, adopted siblings, or stepsiblings; and 3
3. Anyone for whom the patient’s parents or guardians claim 4
a personal exemption in a federal or State tax return. 5
(10) (I) A hospital shall provide notice of the hospital’s financial 6
assistance policy to the patient, the patient’s family, or the patient’s authorized 7
representative before discharging the patient and in each communication to the patient 8
regarding collection of the hospital bill. 9
(II) THE NOTICE REQUIRED U NDER SUBPARAGRAPH (I) OF THIS 10
PARAGRAPH SHALL STAT E THAT THE PATIENT H AS UP TO 240 DAYS AFTER THE DAY 11
THE PATIENT RECEIVES THE INITIAL HOSPITAL BILL TO APPLY FOR FI NANCIAL 12
ASSISTANCE FROM THE HOSPITAL. 13
(III) 1. THE HOSPITAL SHALL EN SURE THAT THE PATIEN T, 14
THE PATIENT’S FAMILY, OR THE PATIENT ’S AUTHORIZED REPRESE NTATIVE SIGNS 15
AND DATES THE NOTICE REQUIRED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH 16
TO ACKNOWLEDGE THE P ATIENT’S RECEIPT OF THE NOT ICE BEFORE DISCHARGI NG 17
THE PATIENT. 18
2. IF A PATIENT CHOOSES NOT TO APPLY FOR FIN ANCIAL 19
ASSISTANCE, THE SIGNATURE SHALL INDICATE THAT THE PA TIENT IS NOT APPLYING 20
ON THE DAY OF THE SI GNING BUT MAY APPLY WITHIN 240 DAYS IMMEDIATELY 21
FOLLOWING THE PATIEN T’S RECEIPT OF THE INI TIAL HOSPITAL BILL . 22
(11) THE HOSPITAL SHALL CO NSIDER ANY CHANGE IN THE PATIENT’S 23
FINANCIAL CIRCUMSTAN CE THAT OCCURS DURIN G THE 240–DAY PERIOD 24
FOLLOWING THE PATIEN T’S RECEIPT OF THE INI TIAL HOSPITAL BILL I F THE 25
PATIENT INFORMS THE HOSPITAL OF THE CHAN GE IN FINANCIAL CIRC UMSTANCE 26
ON OR BEFORE THE CON CLUSION OF THE 240–DAY PERIOD. 27
(c) (1) A hospital shall post a notice in conspicuous places throughout the 28
hospital, including the billing office, informing patients of their right to apply for financial 29
assistance and who to contact at the hospital for additional information. 30
(2) The notice required under paragraph (1) of this subsection shall: 31
(i) Be in simplified language in at least 10 point type; and 32
(ii) Be provided in the patient’s preferred language or, if no preferred 33
language is specified, each language spoken by a limited English proficient population that 34 SENATE BILL 981 7
constitutes at least 5% of the overall population within the city or county in which the 1
hospital is located as measured by the most recent census. 2
(d) The Commission shall: 3
(1) Develop a uniform financial assistance application; and 4
(2) Require each hospital to use the uniform financial assistance 5
application to determine eligibility for free and reduced–cost care under the hospital’s 6
financial assistance policy. 7
(e) The uniform financial assistance application: 8
(1) Shall be written in simplified language; and 9
(2) May not require documentation that presents an undue barrier to a 10
patient’s receipt of financial assistance. 11
(f) (1) Each hospital shall develop an information sheet that: 12
(i) Describes the hospital’s financial assistance policy and includes 13
a section that allows for a patient to initial that the patient has been made aware of the 14
financial assistance policy; 15
(ii) Describes a patient’s rights and obligations with regard to 16
hospital billing and collection under the law; 17
(iii) Provides contact information for the individual or office at the 18
hospital that is available to assist the patient, the patient’s family, or the patient’s 19
authorized representative in order to understand: 20
1. The patient’s hospital bill; 21
2. The patient’s rights and obligations with regard to the 22
hospital bill; 23
3. How to apply for free and reduced–cost care; and 24
4. How to apply for the Maryland Medical Assistance 25
Program and any other programs that may help pay the bill; 26
(iv) Provides contact information for the Maryland Medical 27
Assistance Program; 28
(v) Includes a statement that physician charges are not included in 29
the hospital bill and are billed separately; and 30
8 SENATE BILL 981
(vi) Informs patients of the right to request and receive a written 1
estimate of the total charges for hospital nonemergency services, procedures, and supplies 2
that reasonably are expected to be provided for professional services by the hospital. 3
(2) The information sheet shall: 4
(i) Be in simplified language in at least 10 point type; and 5
(ii) Be in the patient’s preferred language or, if no preferred 6
language is specified, each language spoken by a limited English proficient population that 7
constitutes at least 5% of the overall population within the city or county in which the 8
hospital is located as measured by the most recent census. 9
(3) The information sheet shall be provided to the patient, the patient’s 10
family, or the patient’s authorized representative: 11
(i) Before discharge; 12
(ii) With the hospital bill; 13
(iii) On request; and 14
(iv) In each written communication to the patient regarding 15
collection of the hospital bill. 16
(4) The hospital bill shall include a reference to the information sheet. 17
(5) The Commission shall: 18
(i) Establish uniform requirements for the information sheet; and 19
(ii) Review each hospital’s implementation of and compliance with 20
the requirements of this subsection. 21
(g) Each hospital shall ensure the availability of staff who are trained to work 22
with the patient, the patient’s family, and the patient’s authorized representative in order 23
to understand: 24
(1) The patient’s hospital bill; 25
(2) The patient’s rights and obligations with regard to the hospital bill, 26
including the patient’s rights and obligations with regard to reduced–cost medically 27
necessary care due to a financial hardship; 28
(3) How to apply for the Maryland Medical Assistance Program and any 29
other programs that may help pay the hospital bill; and 30
SENATE BILL 981 9
(4) How to contact the hospital for additional assistance. 1
(h) Each hospital shall develop a procedure to determine a patient’s eligibility 2
under the hospital’s financial assistance policy in which the hospital: 3
(1) Determines whether the patient has health insurance; 4
(2) Determines whether the patient is presumptively eligible for free or 5
reduced–cost care under subsection (b)(7) of this section; 6
(3) Determines whether uninsured patients are eligible for public or 7
private health insurance; 8
(4) To the extent practicable, offers assistance to uninsured patients if the 9
patient chooses to apply for public or private health insurance; 10
(5) To the extent practicable, determines whether the patient is eligible for 11
other public programs that may assist with health care costs; 12
(6) Uses information in the possession of the hospital, if available, to 13
determine whether the patient is qualified for free or reduced–cost care under the hospital’s 14
financial assistance policy; and 15
(7) When a patient submits a completed application for fin ancial 16
assistance, determines the patient’s eligibility under the hospital’s financial assistance 17
policy within 14 days after the patient applies for financial assistance and suspends any 18
billing or collections actions while eligibility is being determined. 19
(i) A hospital may not: 20
(1) Use a patient’s citizenship or immigration status as an eligibility 21
requirement for financial assistance; or 22
(2) Withhold financial assistance or deny a patient’s application for 23
financial assistance on the basis of race, color, religion, ancestry or national origin, sex, age, 24
marital status, sexual orientation, gender identity, genetic information, or on the basis of 25
disability. 26
(j) Each hospital shall submit to the Commission annually at times prescribed by 27
the Commission: 28
(1) The hospital’s financial assistance policy developed under this section; 29
and 30
(2) An annual report on the hospital’s financial assistance policy that 31
includes: 32
10 SENATE BILL 981
(i) The total number of patients who completed or partially 1
completed an application for financial assistance during the prior year; 2
(ii) The total number of inpatients and outpatients who received: 3
1. Free care during the immediately preceding year; and 4
2. Reduced–cost care for the prior year; 5
(iii) The total number of patients who received financial assistance 6
during the immediately preceding year by race or ethnicity and gender; 7
(iv) The total number of patients who were denied financial 8
assistance during the immediately preceding year by race or ethnicity and gender; 9
(v) The total amount of the costs of hospital services provided to 10
patients who received free care; and 11
(vi) The total amount of the costs of hospital services provided to 12
patients who received reduced–cost care that was either covered by the hospital as financial 13
assistance or that the hospital charged to the patient. 14
(k) (1) The Commission shall post on its website each hospital’s financial 15
assistance policy and annual report. 16
(2) The Commission shall compile the reports required under subsection (j) 17
of this section and issue a hospital financial assistance report. 18
(3) The hospital financial assistance report required under paragraph (2) 19
of this subsection shall be made available to the public free of charge. 20
(4) On or before December 1 each year, the Commission shall submit a copy 21
of the annual hospital financial assistance report issued under paragraph (2) of this 22
subsection, in accordance with § 2–1257 of the State Government Article, to the Senate 23
Finance Committee and the House Health and Government Operations Committee. 24
19–214.2. 25
(a) (1) Each hospital annually shall submit to the Commission: 26
(i) At times prescribed by the Commission, the hospital’s policy on 27
the collection of debts owed by patients; and 28
(ii) A report including: 29
SENATE BILL 981 11
1. The total number of patients by race or ethnicity, gender, 1
and zip code of residence against whom the hospital, or a debt collector used by the hospital, 2
filed an action to collect a debt owed on a hospital bill; 3
2. The total number of patients by race or ethnicity, gender, 4
and zip code of residence with respect to whom the hospital has and has not reported or 5
classified a bad debt; and 6
3. The total dollar amount of the charges for hospital services 7
provided to patients but not collected by the hospital for patients covered by insurance, 8
including the out–of–pocket costs for patients covered by insurance, and patients without 9
insurance. 10
(2) The Commission shall post the information submitted under paragraph 11
(1) of this subsection on its website. 12
(b) The policy submitted under subsection (a)(1) of this section shall: 13
(1) Provide for active oversight by the hospital of any contract for collection 14
of debts on behalf of the hospital; 15
(2) Prohibit the hospital from selling any debt; 16
(3) [Prohibit the charging of interest on bills incurred by self–pay patients 17
before a court judgment is obtained; 18
(4)] Describe in detail the consideration by the hospital of patient income, 19
assets, and other criteria; 20
[(5)] (4) Prohibit the hospital from reporting ADVERSE INFORMATION 21
to a consumer reporting agency [or]; 22
(5) PROHIBIT THE HOSPITAL FROM filing a civil action to collect a debt 23
within [180] 240 days after the initial bill is provided; 24
(6) PROHIBIT THE HOSPITAL FROM FILING A CIVIL ACTION TO 25
COLLECT A DEBT AGAIN ST A PATIENT WHOSE O UTSTANDING DEBT IS A T OR BELOW 26
$500; 27
[(6)] (7) Describe the hospital’s procedures for collecting a debt; 28
[(7)] (8) Describe the circumstances in which the hospital will seek a 29
judgment against a patient; 30
12 SENATE BILL 981
[(8)] (9) In accordance with subsection (c) of this section, provide for a 1
refund of amounts collected from a patient or the guarantor of a patient who was later 2
found to be eligible for free care within 240 days after the initial bill was provided; 3
[(9)] (10) If the hospital has obtained a judgment against or reported 4
adverse information to a consumer reporting agency about a patient who later was found 5
to be eligible for free care within 240 days after the initial bill was provided for which the 6
judgment was awarded or the adverse information was reported, require the hospital to 7
seek to vacate the judgment or strike the adverse information; 8
[(10)] (11) Provide a mechanism for a patient to: 9
(i) Request the hospital to reconsider the denial of free or 10
reduced–cost care; 11
(ii) File with the hospital a complaint against the hospital or a debt 12
collector used by the hospital regarding the handling of the patient’s bill; and 13
(iii) Allow the patient and the hospital to mutually agree to modify 14
the terms of a payment plan offered under subsection [(e)] (D) of this section or entered 15
into with the patient; and 16
[(11)] (12) [Prohibit] FOR A PATIENT WHO IS ELIGIBLE FOR FREE OR 17
REDUCED–COST CARE UND ER THE HOSPITAL ’S FINANCIAL ASSISTAN CE POLICY, 18
PROHIBIT the hospital from [collecting additional]: 19
(I) CHARGING INTEREST ON THE DEBT OWED ON A B ILL FOR 20
THE PATIENT BEFORE A COURT JUDGMENT IS OB TAINED; OR 21
(II) COLLECTING fees [in an] OR ANY OTHER amount that exceeds 22
the approved charge for the hospital service as established by the Commission [for which 23
the medical debt is owed on a bill for a patient who is eligible for free or reduced–cost care 24
under the hospital’s financial assistance policy] OR A PROFESSIONAL FEE . 25
(c) (1) (I) [Beginning October 1, 2010, a] A hospital shall provide for a 26
refund of amounts exceeding $25 collected from a patient or the guarantor of a patient 27
who[, within a 2–year period after the date of service,] was found to be eligible for free care 28
[on the date of service] WITHIN 240 DAYS AFTER THE INITI AL BILL IS PROVIDED TO 29
THE PATIENT. 30
(II) THE HOSPITAL SHALL PR OVIDE THE REFUND TO THE 31
PATIENT NOT LATER TH AN 30 DAYS AFTER DETERMINI NG THAT THE PATIENT WAS 32
ELIGIBLE FOR FREE CARE. 33
SENATE BILL 981 13
(2) [A hospital may reduce the 2–year period under paragraph (1) of this 1
subsection to no less than 30 days after the date the hospital requests information from a 2
patient, or the guarantor of a patient, to determine the patient’s eligibility for free care at 3
the time of service, if the hospital documents the lack of cooperation of the patient or the 4
guarantor of a patient in providing the requested information. 5
(3)] If a patient is enrolled in a means–tested government health care plan 6
that requires the patient to pay out–of–pocket for hospital services, a hospital’s refund 7
policy shall provide for a refund that complies with the terms of the patient’s plan. 8
[(d) A hospital may not charge interest or fees on any debt incurred on or after the 9
date of service by a patient who is eligible for free or reduced–cost care under § 19–214.1 of 10
this subtitle.] 11
[(e)] (D) (1) Subject to paragraph (2) of this subsection, a hospital shall 12
provide in writing to each patient who incurs medical debt information about the 13
availability of an installment payment plan for the debt. 14
(2) A hospital shall provide the information under paragraph (1) of this 15
subsection to the patient, the patient’s family, the patient’s authorized representative, or 16
the patient’s legal guardian: 17
(i) Before the patient is discharged; 18
(ii) With the hospital bill; 19
(iii) On request; and 20
(iv) In each written communication to the patient regarding 21
collection of hospital debt. 22
(3) (i) The Commission shall develop guidelines, with input from 23
stakeholders, for an income–based payment plan offered under this subsection that 24
includes: 25
1. The amount of medical debt owed to the hospital; 26
2. The duration of the payment plan based on a patient’s 27
annual gross income; 28
3. Guidelines for requiring appropriate documentation of 29
income level; 30
4. Guidelines for the payment amount that: 31
14 SENATE BILL 981
A. May not exceed 5% of the [individual] patient’s federal or 1
State adjusted gross monthly HOUSEHOLD income THAT TAKES INTO CONSIDERATION 2
ALL INDIVIDUALS ON T HE SAME FEDERAL OR STATE TAX RETURN ; and 3
B. Shall consider financial hardship, as defined in § 4
19–214.1(a) of this subtitle; 5
5. Guidelines for: 6
A. The determination of possible interest payments for 7
patients who do not qualify for free or reduced–cost care, which may not begin before [180] 8
240 days after the [due date of the first payment] INITIAL BILL IS PROV IDED; and 9
B. A prohibition on interest payments for patients who 10
qualify for free or reduced–cost care AS REQUIRED UNDER SU BSECTION (B)(12) OF THIS 11
SECTION; 12
6. Guidelines for modification of a payment plan that does 13
not create a greater financial burden on the patient; and 14
7. A prohibition on penalties or fees for prepayment or early 15
payment. 16
(ii) A hospital may not seek legal action against a patient on a debt 17
owed until the hospital has established and implemented a payment plan policy that 18
complies with the guidelines developed under subparagraph (i) of this paragraph. 19
(4) (i) A patient shall be deemed to be compliant with a payment plan 20
if the patient makes at least 11 scheduled monthly payments within a 12–month period. 21
(ii) If a patient misses a scheduled monthly payment, the patient 22
shall contact the health care facility and identify a plan to make up the missed payment 23
within 1 year after the date of the missed payment. 24
(iii) The health care facility may, but may not be required to, waive 25
any additional missed payments that occur within a 12–month period and allow the patient 26
to continue to participate in the income–based payment plan and not refer the outstanding 27
balance owed to a collection agency or for legal action. 28
(5) (i) A hospital shall demonstrate that it attempted in good faith to 29
meet the requirements of this subsection and the guidelines developed by the Commission 30
under paragraph (3) of this subsection before the hospital: 31
1. Files an action to collect a debt owed on a hospital bill by 32
a patient; or 33
SENATE BILL 981 15
2. Delegates collection activity to a debt collector for a debt 1
owed on a hospital bill by a patient. 2
(ii) Subparagraph (i) of this paragraph does not prohibit a hospital 3
from using an eligibility vendor to provide outreach to a patient for purposes of assisting 4
the patient in qualifying for financial assistance. 5
[(f)] (E) (1) For at least [180] 240 days after [issuing an] THE initial patient 6
bill WAS PROVIDED , a hospital may not report adverse information about a patient to a 7
consumer reporting agency or 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. 11
(3) A hospital may not report adverse information to a consumer reporting 12
agency regarding a patient who at the time of service was uninsured or eligible for free or 13
reduced–cost care under § 19–214.1 of this subtitle. 14
(4) A hospital may not report adverse information about a patient to a 15
consumer reporting agency, commence a civil action against a patient for nonpayment, or 16
delegate collection activity to a debt collector: 17
(i) If the hospital was notified in accordance with federal law by the 18
patient or the insurance carrier that an appeal or a review of a health insurance decision 19
is pending within the immediately preceding 60 days; or 20
(ii) If the hospital [has completed] IS PROCESSING a requested 21
reconsideration of the denial of free or reduced–cost care that was appropriately completed 22
by the patient OR HAS COMPLETED THE RECONSIDERATION within the immediately 23
preceding 60 days. 24
(5) If a hospital has reported adverse information about a patient to a 25
consumer reporting agency, the hospital shall instruct the consumer reporting agency to 26
delete the adverse information about the patient: 27
(i) If the hospital was informed by the patient or the insurance 28
carrier that an appeal or a review of a health insurance decision is pending, and until 60 29
days after the appeal is complete; or 30
(ii) Until 60 days after the hospital has completed a requested 31
reconsideration of the denial of free or reduced–cost care. 32
[(g)] (F) (1) A hospital may not force the sale or foreclosure of a patient’s 33
primary residence to collect a debt owed on a hospital bill. 34
16 SENATE BILL 981
(2) A hospital may not request a lien against a patient’s primary residence 1
in an action to collect debt owed on a hospital bill. 2
(3) (i) A hospital may not [file an action against a patient to collect a 3
debt owed on a hospital bill or] give notice to a patient under subsection [(i)] (H) of this 4
section until after [180] 240 days after the initial bill was provided. 5
(ii) If a hospital files an action to collect the debt owed on a hospital 6
bill, the hospital may not request the issuance of or otherwise knowingly take action that 7
would cause a court to issue: 8
1. A body attachment against a patient; or 9
2. An arrest warrant against a patient. 10
(4) A hospital may not request a writ of garnishment of wages or file an 11
action that would result in an attachment of wages against a patient to collect debt owed 12
on a hospital bill if the patient is eligible for free or reduced–cost care under § 19–214.1 of 13
this subtitle. 14
(5) (i) A hospital may not make a claim against the estate of a deceased 15
patient to collect a debt owed on a hospital bill if the deceased patient was known by the 16
hospital to be eligible for free care under § 19–214.1 of this subtitle or if the value of the 17
estate after tax obligations are fulfilled is less than half of the debt owed. 18
(ii) A hospital may offer the family of the deceased patient the ability 19
to apply for financial assistance. 20
(6) A hospital may not file an action to collect a debt owed on a hospital bill 21
by a patient until the hospital determines whether the patient is eligible for free or 22
reduced–cost care under § 19–214.1 of this subtitle. 23
[(h)] (G) (1) Except as provided in paragraph (2) of this subsection, a spouse 24
or another individual may not be held liable for the debt owed on a hospital bill of an 25
individual who is at least 18 years old. 26
(2) An individual may voluntarily consent to assume liability for the debt 27
owed on a hospital bill of any other individual if the consent is: 28
(i) Made on a separate document signed by the individual; 29
(ii) Not solicited in an emergency room or during an emergency 30
situation; and 31
(iii) Not required as a condition of providing any emergency or 32
nonemergency health care services. 33
SENATE BILL 981 17
[(i)] (H) (1) Subject to paragraph (2) of this subsection, at least 45 days before 1
filing an action against a patient to collect on the debt owed on a hospital bill, a hospital 2
shall send written notice of the intent to file an action to the patient. 3
(2) The notice required under paragraph (1) of this subsection shall: 4
(i) Be sent to the patient by certified mail and first–class mail; 5
(ii) Be in simplified language and in at least 10 point type; 6
(iii) Include: 7
1. The name and telephone number of: 8
A. The hospital; 9
B. If applicable, the debt collector; and 10
C. An agent of the hospital authorized to modify the terms of 11
the payment plan, if any; 12
2. The amount required to cure the nonpayment of debt, 13
including past due payments, INTEREST, penalties, and fees; 14
3. A statement recommending that the patient seek debt 15
counseling services; 16
4. Telephone numbers and Internet addresses of the Health 17
Education Advocacy Unit in the Office of the Attorney General, available to assist patients 18
experiencing medical debt; 19
5. An explanation of the hospital’s financial assistance 20
policy; and 21
6. Any other relevant information prescribed by the 22
Commission; and 23
(iv) Be provided in the patient’s preferred language or, if no preferred 24
language is specified, each language spoken by a limited English proficient population that 25
constitutes at least 5% of the population within the jurisdiction in which the hospital is 26
located as measured by the most recent federal census. 27
(3) The notice required under this subsection shall be accompanied by: 28
(i) An application for financial assistance under the hospital’s 29
financial assistance policy, along with instructions for completing the application for 30
financial assistance, and the telephone number to call to confirm receipt of the application; 31 18 SENATE BILL 981
(ii) The availability of [a] AN INCOME–BASED payment plan to 1
satisfy the medical debt that is the subject of the hospital debt collection action; and 2
(iii) The information sheet required under § 19–214.1(f) of this 3
subtitle. 4
[(j)] (I) A complaint by a hospital in an action to collect a debt owed on a 5
hospital bill by a patient shall: 6
(1) Include an affidavit stating: 7
(i) The date on which the [180–day] 240–DAY period required 8
under subsection [(g)(3)] (F)(3) of this section elapsed and the nature of the nonpayment; 9
(ii) That a notice of intent to file an action under subsection [(i)] (H) 10
of this section: 11
1. Was sent to the patient and the date on which the notice 12
was sent; and 13
2. Accurately reflected the contents required to be included 14
in the notice; 15
(iii) That the hospital provided: 16
1. The patient with a copy of the information sheet on the 17
financial assistance policy in accordance with subsection [(i)(3)(ii)] (H)(3)(II) of this 18
section; and 19
2. Notice of the financial assistance policy as documented 20
under § 19–214.1(f) of this subtitle; 21
(iv) That the hospital made a determination regarding whether the 22
patient is eligible for the hospital’s financial assistance policy in accordance with § 19–214.1 23
of this subtitle; and 24
(v) That the hospital made a good –faith effort to meet the 25
requirements of subsection [(e)] (D) of this section; and 26
(2) Be accompanied by: 27
(i) The original or a certified copy of the hospital bill; 28
(ii) A statement of the remaining due and payable debt supported by 29
an affidavit of the plaintiff, the hospital, or the agent or attorney of the plaintiff or hospital; 30 SENATE BILL 981 19
(iii) A copy of the most recent hospital bill sent to the patient; 1
(iv) If the defendant is eligible for federal Service Members Civil 2
Relief Act benefits, an affidavit that the hospital is in compliance with the Act; 3
(v) A copy of the notice of intent to file an action on a hospital bill; 4
and 5
(vi) A copy of the patient’s signed certified mail acknowledgment of 6
receipt of the written notice of intent to file an action, if received by the hospital. 7
[(k)] (J) If a hospital delegates collection activity to a debt collector, the hospital 8
shall: 9
(1) Specify the collection activity to be performed by the debt collector 10
through an explicit authorization or contract; 11
(2) Require the debt collector to abide by the hospital’s credit and collection 12
policy; 13
(3) Specify procedures the debt collector must follow if a patient appears to 14
qualify for financial assistance; and 15
(4) Require the debt collector to: 16
(i) In accordance with the hospital’s policy, provide a mechanism for 17
a patient to file with the hospital a complaint against the hospital or the debt collector 18
regarding the handling of the patient’s bill; 19
(ii) Forward the complaint to the hospital if a patient files a 20
complaint with the debt collector; and 21
(iii) Along with the hospital, be jointly and severally responsible for 22
meeting the requirements of this section. 23
[(l)] (K) (1) The board of directors of each hospital shall review and approve 24
the HOSPITAL’S financial assistance POLICY REQUIRED UNDE R § 19–214.1 OF THIS 25
SUBTITLE and debt collection [policies of the hospital] POLICY REQUIRED UNDE R THIS 26
SECTION at least every 2 years. 27
(2) A hospital may not alter its financial assistance or debt collection 28
policies without approval by the board of directors. 29
[(m)] (L) The Commission shall review each hospital’s implementation of and 30
compliance with the hospital’s policies and the requirements of this section. 31 20 SENATE BILL 981
[(n)] (M) (1) On or before February 1 each year, beginning in 2023, the 1
Commission shall compile the information required under subsection (a) of this section and 2
prepare a medical debt collection report based on the compiled information. 3
(2) The report required under paragraph (1) of this subsection shall be: 4
(i) Made available to the public free of charge; and 5
(ii) Submitted to the Senate Finance Committee and the House 6
Health and Government Operations Committee in accordance with § 2–1257 of the State 7
Government Article. 8
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 9
October 1, 2025. 10