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Hospital group warns of unintended consequences of medical debt plans

ANNAPOLIS — Legislation in the Maryland General Assembly would qualify more patients for financial assistance, limit the amount of debt hospitals can sue patients to recover and work to improve notice to patients of financial assistance options.

Bob Atlas, president of the Maryland Hospital Association.

Bob Atlas, president of the Maryland Hospital Association. (File photo)

The bills’ supporters have urged that changes to the debt collection practices of Maryland hospitals take place as soon as possible, but the hospitals are asking that the issue be studied first, citing potential complications.

“We appreciate your looking at this issue because hospitals know that there are opportunities to improve,” Bob Atlas, president and CEO of the Maryland Hospital Association, testified before the House Health and Government Operations Committee Friday. “We are resolute in our commitment to work on the issues of financial assistance and medical debt. Let us find thoughtful, fair ways that hospitals, together with everyone else that provides or finances health services of all kinds, can do better to assure affordability for the people we serve.”

Consumer advocates say that medical debt and the way medical debt is collected have become significant problems in Maryland, especially for people with low incomes.

Between 2009 and 2018, Maryland hospitals filed 145,746 lawsuits against patients, seeking average compensation of $945, according to information compiled in a report from National Nurses United, the AFL-CIO, Coalition for a Humane Hopkins and the Maryland Consumer Rights Coalition.

One bill, filed by Del. Robbyn Lewis, D-Baltimore, would widen the scope of who is covered by uncompensated care policies in Maryland and increase the income threshold for eligibility for charity care.

The bill would also make some existing public assistance programs, such as free and reduced lunch for students, presumptive indicators of qualification for charity care, making it easier for hospitals to identify which patients may qualify.

“The fact is, folks who are vulnerable and most likely eligible for the type of support this bill offers are the hardest to reach,” Lewis told the committee. “This bill isn’t for people who are already covered by the social safety net. This is for people with insurance but who may have issues covering their costs.”

A second bill, sponsored by Del. Lorig Charkoudian, D-Montgomery, and presented as a companion bill to Lewis’ measure, would raise the threshold of outstanding debt required for a hospital to pursue collection to $5,000 or more. Her bill would also require hospitals to offer payment plans; limit when debt can be reported to a credit agency; limit the use of liens, body attachments and garnishment of wages; and increase the time hospitals must wait before they can pursue a debt collection in order to allow the insurance appeals process to play out.

“I think what you can hear is they are common-sense guidelines we are putting in place and they still allow for a whole range of practices in collecting medical bills,” Charkoudian testified.

The lawmakers and hospitals are still working on bills and Lewis and Charkoudian indicated the hospitals were receptive and collaborative during the process.

Lawmakers and hospitals differed when it came to the urgency of the legislation. Atlas said he feared that rapidly implementing new guidelines without sufficient consideration could affect Maryland’s Total Cost of Care Model agreement with the federal government. The arrangement allows for the state’s unique all-payer hospital payment system, in which a state commission sets the prices that hospitals can charge for services.

“The myriad complications of this proposal warrant very careful consideration to prevent unintended adverse consequences,” Atlas said.

One consequence to the state budget would come from a $90 million to $180 million increase in uncompensated care, adding to state Medicaid costs, Atlas said. The proposals could also count against cost savings that state hospitals are supposed to realize under the Total Cost of Care Model, he said.

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