Senate Bill 981, introduced in the Maryland Legislature on March 11, 2025, aims to reform hospital billing practices and protect patients from aggressive debt collection tactics. The bill addresses significant concerns regarding how hospitals manage unpaid bills, particularly for patients who may be uninsured or eligible for financial assistance.

One of the key provisions of Senate Bill 981 prohibits hospitals from reporting adverse information about a patient to consumer reporting agencies for at least 240 days after the initial bill is issued. This extended timeframe is designed to give patients ample opportunity to address their medical debts without the fear of damaging their credit scores. Additionally, hospitals are required to report any fulfilled payment obligations to credit agencies within 60 days, ensuring that patients' positive payment histories are accurately reflected.

The bill also stipulates that hospitals cannot initiate civil actions for nonpayment or delegate collection activities to debt collectors if a patient is currently appealing a health insurance decision or if they are undergoing a reconsideration process for financial assistance. This provision aims to protect patients who are actively seeking to resolve their billing issues and prevent undue financial stress during these processes.

Notably, the legislation includes a clause that explicitly prohibits hospitals from forcing the sale or foreclosure of a patient’s primary residence to collect debts related to hospital bills. This measure seeks to safeguard vulnerable patients from extreme financial repercussions.

The introduction of Senate Bill 981 has sparked discussions among lawmakers and healthcare advocates. Supporters argue that the bill is a necessary step toward ensuring fair treatment of patients and reducing the burden of medical debt, which has become a significant issue in the United States. Critics, however, express concerns about the potential financial impact on hospitals, particularly smaller facilities that may rely on timely payments to sustain operations.

As the bill progresses through the legislative process, its implications could reshape the landscape of hospital billing practices in Maryland. If passed, it may serve as a model for similar reforms in other states, reflecting a growing recognition of the need for patient protections in the healthcare system. The next steps will involve committee reviews and potential amendments as lawmakers weigh the balance between patient rights and hospital financial stability.