he Maryland Office of Financial Regulation has released new guidance outlining three medical debt collection laws that took effect this month. Together, these laws reshape how medical debt is collected, reported, and enforced across the stateāintroducing new consumer protections and compliance requirements for debt collectors, healthcare providers, and credit reporting agencies.
According to the stateās guidance, ācollection agencies and consumer reporting agencies should take note of the relevant changes in the law and ensure they comply with them.ā
Fair Medical Debt Reporting Act (HB 1020)
Approved by Governor Wes Moore in April, HB 1020 limits how medical debt can be shared with and reflected by consumer reporting agencies. The law prohibits healthcare providers and their agents from disclosing any medical debt information to a credit bureau.Ā
Additionally, credit reporting agencies are barred from including or maintaining adverse information related to medical debt on consumer reports if they knowāor reasonably should knowāthe data concerns medical expenses. Any agreements between healthcare providers and debt collectors must now include a clause that explicitly forbids the disclosure of medical debt to consumer reporting agencies.Ā
Medical Debt ā Complaints for Money Judgment and Real Property Liens (HB 428)Ā
This law updates how debt collectors may pursue medical debt through the courts. Collectors must include the consumerās primary residence address and specify that the complaint involves medical debt when filing for a money judgment. Importantly, collectors can no longer use money judgments to place liens on a consumerās primary residence.Ā
The law defines medical debt as obligations owed for medical services, products, or devicesābut excludes charges made on general-purpose credit cards. However, if a credit card was opened solely for medical expenses, that debt qualifies as medical debt under the law. To support these changes, the Maryland District Court has revised its judgment forms accordingly.Ā
Hospitals ā Financial Assistance and Collection of Debts (HB 268)Ā
HB 268 preserves a three-year statute of limitations on medical debt, regardless of whether a hospitalās contract labels it as a contract under seal. The law also enhances patient protections related to financial assistance and collection practices.Ā
Hospitals must notify patients about available financial assistance programs and provide at least 240 days to apply. During this period, they may not engage in collection efforts. The law also bars hospitals from collecting medical debts under $500, reporting such debts to credit bureaus, or charging interest to patients eligible for free or reduced-cost care.Ā
Strengthening Consumer ProtectionsĀ
Collectively, these laws aim to reduce the long-term financial harm caused by medical debt and ensure fairer, more transparent collection practices. Healthcare providers, debt collectors, and credit reporting agencies operating in Maryland should review the new requirements closely and potentially update their policies to maintain compliance.Ā
Author:Ā Jennifer Evancic
Jennifer.Evancic@ResourceManagement.com
Jennifer Evancic is a third-party auditor valued by creditors and large organizations for her knowledge in call monitoring within the collections industry. With meticulous attention to detail and a firm grasp of regulatory requirements, she ensures compliance with clientsā criteria and state and federal regulations.
Jennifer audits collections calls, ensuring they meet client-specific criteria and comply with regulations, providing valuable insights and maintaining industry standards.
Beyond her auditing responsibilities, Jennifer takes the lead in organizing and facilitating monthly call calibrations. These sessions serve as a collaborative forum where clients and their vendors come together to discuss call monitoring results and address any findings or areas for improvement. Jenniferās guidance fosters open communication and ensures alignment between clients and vendors, driving continuous improvement in collections practices.
Jennifer stays up-to-date with compliance and industry best practices by participating regularly in peer meetings, regulatory updates and industry webinars. This keeps her informed about emerging issues and ensures she remains a knowledgeable leader in collections compliance.
