Maryland Senate passes bill limiting hospitals' debt collection actions against patients

On March 10, 2025, the Maryland Legislature introduced Senate Bill 981, a significant piece of legislation aimed at protecting patients from aggressive debt collection practices by hospitals. This bill seeks to address the growing concern over medical debt, which has become a pressing issue for many families across the state.

The primary purpose of Senate Bill 981 is to limit the actions hospitals can take to collect unpaid medical bills. Key provisions include prohibiting hospitals from placing liens on a patient’s primary residence and extending the time frame before a hospital can initiate debt collection actions from 180 to 240 days after the initial bill is issued. Additionally, the bill prevents hospitals from requesting wage garnishments or filing lawsuits against patients who qualify for free or reduced-cost care. It also protects the estates of deceased patients from being pursued for debts if the patient was eligible for financial assistance.

The bill has sparked notable debates among lawmakers and healthcare advocates. Proponents argue that it provides essential protections for vulnerable patients who may already be struggling financially. They emphasize that medical debt should not lead to homelessness or criminal charges, as the bill also prohibits hospitals from seeking body attachments or arrest warrants for unpaid bills. Critics, however, express concerns about the potential financial impact on hospitals, particularly smaller facilities that may rely on debt collection to maintain operations.

The implications of Senate Bill 981 extend beyond individual patients; it reflects a broader movement towards healthcare reform aimed at reducing the burden of medical debt on families. Experts suggest that if passed, the bill could lead to a significant decrease in the number of patients facing aggressive collection tactics, ultimately fostering a more equitable healthcare system.

As the bill moves through the legislative process, its future remains uncertain. However, its introduction marks a critical step in addressing the financial challenges many Maryland residents face when accessing healthcare. The ongoing discussions surrounding Senate Bill 981 highlight the need for a balanced approach that protects patients while ensuring hospitals can continue to provide necessary services.