Maryland hospitals must use new standards to determine who is eligible for free and reduced-price care, and provide information about financial assistance to all patients under two bills signed into law Thursday by Gov. Martin O'Malley.
The measures require state regulators to monitor whether hospitals comply with the new consumer protections, which also prohibit charging interest on bills incurred by uninsured patients before a court judgment is approved.
The new rules, which take effect June 1, require hospitals to give free care to all Maryland residents with incomes less than 1.5 times the federal poverty guideline - equivalent to $33,075 for a family of four - and provide reduced-price care to low-income patients above that level.
Legislators approved the bills in response to stories published last December in The Baltimore Sun. The series documented how some of Maryland's 46 nonprofit hospitals were aggressively pursuing collection of unpaid bills from patients of limited means even though those debts are supposed to be recovered in the rates they charge.
"The governor saw there was a significant problem in this area," said John M. Colmers, secretary of the state's Department of Health and Mental Hygiene. "He pressed the rate-setting commission to investigate and based upon their investigation, he and the legislature came up with a piece of legislation to address many of the problems identified by The Sun."
The bills, sponsored by Del. Peter A. Hammen and Sen. George W. Della Jr., replace voluntary guidelines crafted by the Maryland Hospital Association for who is eligible for free care - referred to as charity care. Most hospitals have said they already follow those guidelines, according to state regulators.
In a review of the recently completed legislative session, Vincent DeMarco, president of the Maryland Citizens' Health Initiative, called the new law "perhaps the biggest win for health care consumers this year."
DeMarco said the law requires hospitals to "inform patients in a variety of ways that financial help is available for those who are having trouble with their bills.
Colmers had urged lawmakers to set free care eligibility at a family of four with income up to $44,100 - or two times the federal poverty rate. The Maryland Hospital Association expressed concern about the potential effect on overall hospital rates, but state regulators said the change would not increase financial burdens on hospitals. Several hospitals already provide free care up to two times the federal poverty level, regulators say.
