Lower-income patients who lack insurance would be guaranteed free care at Maryland hospitals, which also would have to follow consumer-friendly debt-collection policies, under legislation adopted by the House of Delegates on Saturday.
The bill would require that hospitals develop a financial assistance policy for uninsured and underinsured patients that includes free care for those with incomes of less than 150 percent of the federal poverty level, or about $33,000 for a family of four. It would also prohibit hospitals from charging interest on overdue bills before creditors obtain a court judgment.
"It's one thing to end up sick in the hospital; it's another thing to be given a hospital bill that you can't afford," said Del. Peter A. Hammen, a Baltimore Democrat and chairman of the Health and Government Operations Committee. "It's devastating and affects a large segment of our population."
The legislation comes in response to articles in The Baltimore Sun on hospital debt-collection practices. Gov. Martin O'Malley called for the Health Services Cost Review Commission to investigate, and his administration worked with lawmakers to craft a bill replacing voluntary guidelines from the Maryland Hospital Association with a minimum standard of eligibility for charity care.
The House passed the bill unanimously. A companion Senate measure awaits action.
The hospital association supports the initiative. The bill largely standardizes the association's recommended best practices, including the 150 percent income standard that has been suggested since 2005, said Nancy Fiedler, a spokeswoman.
"The vast majority of hospitals have been following these guidelines," Fiedler said. "Hospitals are committed to helping people qualify for whatever assistance they can qualify for, and to doing the best they can by them in terms of billing practices."
The Sun's investigative series found that Maryland, unlike some other states, lacks uniform standards and practices regarding free or reduced-price care. Some patients ended up facing court judgments or getting liens placed on their homes even though they had little means to pay their bills.
Maryland has a unique system under which hospitals received nearly $1 billion last year to cover the costs of charity care and unpaid bills; the funding comes from higher rates that all patients pay. The concern is that hospitals were reimbursed while patients who qualified for assistance weren't getting the benefit.
Hospitals are currently required to conspicuously post notices about the availability of financial assistance. But they need not necessarily inform patients directly or provide charity care applications. Under the bill, hospitals must develop informational sheets on financial assistance, which must be given to patients and referenced on the hospital bill.
Hospitals also would be required to employ trained staff to help patients understand billing issues and how to apply for Medicaid and other programs that may help them pay charges. Lawmakers took out a provision that would have prohibited hospitals from placing liens on primary residences for unpaid debt, as some worried about high-income individuals avoiding that penalty.