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Medical debt legislation, after compromises, heads to Hogan

The legislation unanimously passed in both chambers would add extra protections for low-income Marylanders who can’t pay their medical bills. (Depositphotos)

The legislation unanimously passed in both chambers would add extra protections for low-income Marylanders who can’t pay their medical bills. (Depositphotos)

A bill that aims to end certain medical debt collection practices — practices that advocates say disproportionately target poor families and people of color — is now on its way to the governor’s desk having passed unanimously through both chambers.

But despite final legislative approval of the bill, which its supporters have described as one of the most comprehensive protections against medical debt in the country, advocates are lamenting the loss of provisions that were stripped from the final text of the bill.

Most notably, the bill was amended to remove a provision that would have forbidden hospitals from suing patients for debt below $1,000. End Medical Debt Maryland, a coalition of organizations fighting for legislation to protect Marylanders from medical debt, originally wanted that cap to be $5,000, but lowered it in negotiations with the Maryland Hospital Association. Now, that provision isn’t included in the bill at all.

A study of nearly 150,000 medical debt lawsuits filed in Maryland over the past decade showed that the median amount of money patients were sued for was $944.

The bill, sponsored by Del. Lorig Charkoudian, D-Montgomery, would prohibit certain debt collection practices. Hospitals would no longer be allowed to knowingly take any action that would result in the patient’s arrest, nor would they be able to take place a lien on a person’s house, for example. Other practices would be banned only for patients who qualify for free or reduced-cost care; hospitals would not be able to garnish those patients’ wages, for example.

“Obviously we would love for that to have applied to everyone, but we do think it does apply to a lot of low-income and working families, and that’s really important,” said Marceline White, president of the Maryland Consumer Rights Coalition, one of the organizations that is a part of End Medical Debt Maryland.

The bill also would create an income-based payment plan that hospitals would be required to offer to patients. Currently, hospitals must have payment plan options available, but the details of those plans vary from hospital to hospital, according to White. Hospitals are also not required to tell patients that payment plans are available.

White says this results in some low-income patients being offered plans that are completely unfeasible for them, while others don’t know that payment plan options exist at all.

This legislation would require hospitals to inform patients of the option to pay using the income-based payment plan before they can sue patients, which Charkoudian said will go a long way toward reducing the number of medical debt lawsuits hospitals file.

“People generally want to pay their bills, people pay their bills when they can pay their bills and requiring the details of this payment plan is crucial for giving people that shot to pay their bills before taking the steps with the debt collector or going to court,” she said.

Though the original bill outlined the details of this payment plan, amendments to the legislation  instead would require the Health Services Cost Review Commission to develop guidelines for payment plans with the input of stakeholders over the coming months. Some parts of what the plan must include are laid out in the bill, however, such as a provision that states that the monthly payment cannot be more than 5% of the patient’s monthly income. Interest payments also would be prohibited for patients that qualify for free or reduced-cost care.

These payment plan guidelines are due to be delivered by the HSCRC by January 2022. But since it would not be legal to sue patients for medical debt without first giving them the option of utilizing the payment plan once the bill is signed into law, there would be what White calls a de facto moratorium on medical debt lawsuits for at least the remainder of the year, until hospitals can implement their payment plans.

“We do think that that’s important, that there’s a pause in the middle of a global pandemic and an economic recession,” she said.

White, Charkoudian and End Medical Debt Maryland said they intend to keep pushing for additional medical debt protections — especially establishing a minimum amount of debt a patient can be sued for. But White said the overwhelming legislative support for the bill was a win — and a gateway into further protections in coming General Assembly sessions.

“I think what we can say is … this is a very good bill that’s a very good first step in addressing the needs of patients to pursue medical care without fear of the cost, without fear of possibly losing their home, losing a large chunk of their wages,” she said. “But there’s a lot more to be done.”

 


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