Delegate John A. Hurson wanted to make Maryland's system for setting hospital rates fairer to poor people. As chairman of the House health committee, he was in a powerful position to make those changes happen.
But he couldn't get several proposals through his own panel. They were watered down or removed from bills after the rate-setting agency and the powerful trade group representing hospitals teamed up against them.
Hurson's experience was a testament to how sacred rate regulation remains in Maryland, more than 30 years after it was created. Maryland is the only state in which government sets hospital rates for all patients, and the system's survival is a tale of ideology, political power, and supporters' assertions that regulation has helped nearly all of Maryland's nonprofit hospitals thrive.
But it's a system that can also fail some of the people it was set up to protect, an eight-month investigation by The Baltimore Sun found.
Regulators pore over reams of data to determine how much hospitals can charge but don't monitor how hospitals collect patient debts. The system enables hospitals to charge rates to all patients to cover their costs of free and unpaid care, yet hospitals have sued 132,000 patients to collect unpaid bills over the past five years and have won at least $100 million in judgments, court records show.
Policies at hospitals for deciding who is eligible for free or reduced price care vary widely. Some patients wind up facing lawsuits even though they have little means to pay their bills, but the hospitals' trade group has fought off efforts in the General Assembly to make these standards uniform, as they are in some other states.
"The hospitals may be nonprofit, but they are very much about the buck," said Hurson, who left the legislature in 2005. "What they have in the rate-setting commission is a life preserver."
Under Maryland law, hospitals can charge interest at the legal maximum of 12 percent a year, starting 60 days after the patient was discharged - twice the rate that can be charged on other consumer debts. They can keep a judgment in force for more than 20 years.
Some hospitals are placing thousands of liens on patients' homes to collect their bills, despite industry guidelines that caution against wholesale use of the practice.
