On October 14, the Maryland Office of Financial Regulation issued guidance advising collection agencies and consumer reporting agencies to review new requirements and ensure compliance with three new Maryland laws: HB 428 (Medical Debt – Complaints for Money Judgment and Real Property Liens); HB 1020 (Fair Medical Debt Reporting Act); and HB 268 (Hospitals – Financial Assistance and Collection of Debts – Policies). These laws all took effect on October 1, revising the rules for collecting and reporting on medical debt in Maryland.

Medical Debt – Complaints for Money Judgment and Real Property Liens

HB 428 requires that any debt collector seeking a money judgment for medical debt must indicate in the complaint that the judgment sought is for medical debt and include the debtor’s primary residential address. The law defines medical debt as a debt “owed by a consumer to a person whose primary business is providing medical services, products, or devices,” and clarifies that this excludes general-purpose credit card debt, but includes debt on credit cards operating under closed- or open-ended credit plans offered solely for medical expenses. If a money judgment is obtained for medical debt, the law prohibits the use of that judgment to place a lien on the debtor’s primary residence.

Fair Medical Debt Reporting Act

HB 1020 prohibits providers of medical services, devices or products — and their agents or debt collectors — from disclosing any medical debt information to a consumer reporting agency. Consumer reporting agencies are barred from creating, furnishing or maintaining reports that contain adverse information the agency knows, or should know, related to medical debt, and may not include collection activity for medical debt. The law further prohibits the use of medical debt information in determining a consumer’s creditworthiness and provides that any agreement between a provider and a debt collector must include a clause prohibiting disclosure of medical debt information to a consumer reporting agency; otherwise, the agreement is deemed “void and unenforceable.”

Hospitals – Financial Assistance and Collection of Debts – Policies

HB 268 preserves the existing three-year statute of limitations for hospital debt, regardless of whether the contract is under seal. It expands existing requirements for hospitals to provide notice of their financial assistance policy by adding new content, delivery and receipt requirements for such notices and by requiring hospitals to give consumers 240 days to apply for assistance, during which time they may not initiate debt collection actions. Hospitals are also prohibited from filing collection actions for medical debts under $500, reporting medical debt to consumer reporting agencies, or charging interest to consumers eligible for free or reduced-cost care.