A trio of Maryland medical debt laws impacted debt collectors and credit reporting that went into effect on October 1st, and in late October the Maryland Office of Financial Regulation released new guidance that summarizes those laws.
HB 1020 – Fair Medical Debt Reporting Act
Governor Wes Moore signed Maryland HB 1020 into law in April prohibiting medical debt information from being included in credit reports, as Americollect reported. The Maryland medical debt law prohibits a consumer reporting agency (CRA) from furnishing any consumer report containing certain adverse information relating to a consumer’s medical debt. It also stops health care facilities, practitioners or ambulance services from disclosing medical debt information to a CRA.
Maryland HB 1020 defined medical debt to include bills that are not past due or have already been paid. It does not include debt charged to a credit card unless the credit card is issued under an open-end or closed-end credit plan offered solely for the payment of healthcare services. In addition to these rules, Maryland HB 1020 does not allow CRAs to maintain a file on a consumer related to medical debt and prohibits a person from using medical debt information for determining creditworthiness of a consumer.
HB 268 – Financial Assistance and Collection of Debts – Hospitals
Maryland medical debt law HB 268 covers the statute of limitations for hospital debt as well as when hospitals are allowed to engage in collection activity. Aligning with 501(r) requirements, patients would have up to 240 days after receiving the first hospital bill to apply for financial assistance, then going a step further, hospitals must inform patients of this timeframe and obtain documentation of such notice, such as a signed acknowledgement upon discharge. Legal action cannot be initiated within 240 days of the initial bill, up from 180. Hospitals would also be required to provide refunds within 30 days to patients found eligible for free care within 240 days after this initial bill is provided and would have to take into consideration any changes in a patient’s financial circumstances that occur within those 240 days. Maryland HB 268 also prohibits reporting adverse information to credit agencies during the 240-day period if the patient is applying for financial assistance or experiences changes in their financial circumstances.
The bill also relates to the statute of limitations for hospital debt as well as when hospitals may engage in collection activity. HB 268 “maintains a 3-year statute of limitations on medical debt regardless of whether the contract between the hospital and patient lists the debt as a contract under seal.”
Hospitals are also prohibited from filing actions to collect on medical debt under $500 and cannot report medical debt to a consumer reporting agency.
HB 428 – Medical Debt – Complaints for Money Judgment and Real Property Liens
Maryland HB 428, the money judgment and liens law, “requires debt collectors seeking to obtain a money judgment for medical debt to include the consumer’s primary residence address and that the money judgment is for medical debt in the complaint.” This means debt collectors are prohibited from using a money judgment to place a lien on a patient’s primary residence. In this, medical debt is defined as “a debt owed by a consumer to a person [or their agent] whose primary business is providing medical services, products, or devices.”
Maryland HB 428 clarifies that the definition of “medical debt” excludes charges on a general-purpose credit card. “However, if a credit card was specifically opened only to pay for medical expenses, then any debt on that card would be considered medical debt.”
This guidance of Maryland medical debt laws was released so that collection agencies and consumer reporting agencies note the relevant changes in the law to ensure they comply with them.
Ridiculously Nice Legal Disclaimer
The content provided in this communication (“Content”) is presented for educational and general reference purposes only. Americollect, LLC and/or AmeriEBO LLC either directly or indirectly through speakers, independent contractors, or employees (collectively referred to as “Americollect”) is providing this Content as a courtesy to be used for informational purposes only. The Contents are not intended to serve as legal or other advice. Americollect does not represent or warrant that the Content is accurate, complete, or current for any specific or particular purpose or application. This information is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel. By using the Content in any way, whether or not authorized, the user assumes all risk and hereby releases Americollect from any liability associated with the Content.