Maryland Regulators, Lawmakers Looking To Limit Interest Hospitals, Collection Agencies Add to Delinquent Bills
Maryland lawmakers and state regulators at a state Senate Finance Committee hearing on Thursday discussed whether the state has the ability to restrict hospitals and their collection agencies from adding interest to delinquent medical bills at twice the state's allowable rate for other types of debt, the Baltimore Sun reports (Drew, Baltimore Sun, 2/28).
A report by the Health Services Cost Review Commission found that Maryland law should be changed to ensure state hospitals are meeting their obligation to offer no-cost care to low-income residents. The report was ordered by Gov. Martin O'Malley (D) in response to a Sun series examining how hospitals in the state collect debt from low-income patients. The report recommended that hospitals be mandated to offer no-cost services to all state residents with incomes less than 200% of the federal poverty level; that written notice about the availability of financial assistance be provided to all patients; and that hospitals and their collection agencies be prohibited from adding interest and penalties to bills to uninsured patients before court judgments are entered against them (Kaiser Daily Health Policy Report, 2/24).
The Sun reports that according to debt-collection cases filed by the law firm Wolpoff and Abramson, hospitals routinely sought to add 12% interest on judgments dating back to 60 days after the patient was discharged. Although doing so is legal under regulations set by the commission, which sets hospital rates, the practice is "criticized as unnecessary" by many, including debt-collection lawyers, the Sun reports.
State Sen. George Della (D) has proposed a bill that would set a minimum statewide standard for hospitals for providing no-cost care for patients and bar them from placing liens on patients' primary residences. The bill also would require that hospitals charge interest rates that comply with rules set by the cost review commission. Stephen Ports, principal deputy director of the commission, told the panel that the agency's power to regulate the hospitals could already be extended to the amount collection firms hired by hospitals add to unpaid bills prior to a judgment. However, Della and other state senators said that new legislation, such as Della's bill, would be needed for the state to regulate the collection agencies. Another bill, introduced by state Delegate Peter Hammen (D), would prohibit prejudgment interest completely (Baltimore Sun, 2/28).
