MarylandHB 02682025 Regular SessionHouseWALLET

Hospitals - Financial Assistance and Collection of Debts - Policies

Sponsored By: Lorig Charkoudian (Democratic)

Signed by Governor

Health Care Facilities and RegulationCivil Actions -see also- Small ClaimsContracts -see also- ProcurementDebt Collection -see also- Attachments and GarnishmentsHospitals -see also- Clinics; State HospitalsLow-IncomeMedical AssistanceMedical TreatmentsNoticesPatientsPersonal RepresentativesReportsRevenue and Taxes -see also- (specific tax)Standards and Best PracticesStatutes of LimitationTime

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Bill Overview

Analyzed Economic Effects

8 provisions identified: 8 benefits, 0 costs, 0 mixed.

Affordable payment plans for hospital patients

Beginning October 1, 2025, income-based hospital payment-plan standards cap monthly payments at 5% of household adjusted gross monthly income, counting people on the same tax return. Hospitals must explain these plans in their aid policies and before discharge, with bills, on request, and in written collection messages. Plans must consider hardship, allow changes, and prohibit late fees and early-payment penalties; making 11 of 12 monthly payments counts as compliance. Patients missing payments must contact the facility to arrange a cure within one year; hospitals cannot sue before a plan is established and implemented. Patients eligible for free or reduced care owe no interest before judgment or charges above the approved service price. If free-care eligibility is found within 240 days of the first bill, amounts collected above $25 must be refunded within 30 days of that finding, subject to government health-plan terms.

Credit protections for hospital debt patients

Beginning October 1, 2025, hospital collection policies must prohibit reporting negative patient information to credit agencies. Hospitals also cannot delegate collections during the first 240 days after the initial bill. Covered insurance appeals pause lawsuits and delegated collections when the hospital received the required notice within the preceding 60 days. A properly completed financial-aid reconsideration request pauses those steps during review and for 60 days afterward; hospitals must request deletion of negative credit information for protected review periods. When free-care eligibility is found within 240 days of the first bill, hospitals must seek to undo a related judgment or remove reported information; previously reported payments must be updated within 60 days after payment.

Hospital debt cannot threaten your home

Beginning October 1, 2025, hospitals cannot force a sale or foreclosure of a patient's main home or request a lien against it. They cannot seek arrest over hospital debt or garnish wages of patients eligible for free or reduced care. Estate claims are barred when the hospital knew the patient qualified for free care or the estate after taxes is worth less than half the debt. The specified collection notice cannot be sent before 240 days after the first bill. A spouse or anyone else owes an adult patient's bill only through a separate, voluntary signed agreement, never required for care or requested in an emergency room or emergency situation.

Patients face fewer hospital debt lawsuits

Beginning October 1, 2025, covered consumer-hospital debt contracts generally have a three-year lawsuit deadline instead of 12 years. Hospitals cannot sue within 240 days of the first bill, over balances of $500 or less, or before checking financial-aid eligibility. Before suing, hospitals must send at least 45 days' notice by both certified and first-class mail. The notice must give the amount needed to resolve the debt, an aid application, payment-plan information, and counseling resources. It must use the patient's preferred language or, if none is given, languages meeting the local 5% limited-English population threshold; lawsuit filings must document required notices, waiting periods, aid review, and payment-plan efforts.

Lower hospital bills for eligible families

Beginning October 1, 2025, eligible patients get minimum discounts on out-of-pocket costs for regulated, medically necessary hospital services. Hospitals must cut costs by at least 75% at family income of 201%–250% of the federal poverty level. The minimum cut is 60% above 250% through 300%. Patients qualifying through financial hardship get at least 50% off above 300% through 350%, and 45% above 350% through 400%. Hardship discounts are at least 40% above 400% through 450%, and 35% above 450% through 500%.

More paths to free hospital care

Beginning October 1, 2025, Maryland hospitals must offer free medically necessary care to families at or below 200% of the federal poverty level. Care must follow accepted medical practice, treat or prevent a health condition, and not be mainly for convenience. Patients ineligible for Maryland Medicaid or its children's health program qualify for presumed free-care eligibility through specified benefit programs, including income-based school meals for a child in their household. Hospitals can consider monetary assets only above $100,000, excluding tax-favored retirement assets; medical debt includes copays, coinsurance, deductibles, and costs beyond hospital bills. The state commission can raise reduced-care income limits by regulation, considering hospital finances, patient mix, bad debt, and charity care.

Patients get time to seek help

Beginning October 1, 2025, patients have 240 days after their first hospital bill to apply for financial help. Hospitals must document receipt of the notice before discharge and consider financial changes reported within that window. Trained staff must use a uniform application, decide completed applications within 14 days, and pause billing and collections during review. Plain-language information must explain help, payment plans, and advocacy contacts, using the patient's preferred language or required local languages. Eligibility cannot depend on citizenship or immigration status or prohibited discrimination; policies must allow reconsideration, and hardship-based reduced-care eligibility lasts 12 months at that hospital.

Hospitals must answer for debt collectors

Beginning October 1, 2025, hospitals cannot sell patient debt and must actively oversee outside collectors. Collection policies must explain income and asset reviews, collection steps, and when hospitals seek judgments. Collectors need contracts or explicit authorization, must follow hospital policies, address possible financial-aid eligibility, and provide complaint channels; both hospital and collector are responsible for compliance. Hospital boards must approve aid and collection policies at least every two years and approve changes, while the state commission reviews compliance. Hospitals must submit policies and annual data on aid, denials, costs, collections, bad debt, and unpaid charges, including required demographic and ZIP-code breakdowns; submissions are public, and the commission must publish and send its annual analysis to legislative committees by December 1.

Sponsors & Cosponsors

Sponsor

Lorig Charkoudian
Democratic • House

Cosponsors

Heather Bagnall
Democratic • House
Harry Bhandari
Democratic • House
Bonnie Cullison
Democratic • House
Pam Lanman Guzzone
Democratic • House
Terri L. Hill
Democratic • House
Anne R. Kaiser
Democratic • House
Kenneth Kerr
Democratic • House
Lesley J. Lopez
Democratic • House
Ashanti Martinez
Democratic • House
Joseline A. Peña-Melnyk
Democratic • House
Samuel I. Rosenberg
Democratic • House
Steve Johnson
Democratic • House
Deni Taveras
Democratic • House
Jennifer White Holland
Democratic • House
Jamila J. Woods
Democratic • House
Teresa Woorman
Democratic • House

Roll Call Votes

All Roll Calls

Yes: 151 • No: 31

Senate vote • 3/31/2025

Third Reading Passed

Yes: 40 • No: 7

House vote • 3/6/2025