Prince George's bill would let county cancel certain hospital patient debt, bar collections and credit reporting

The County Affairs committee heard PG402, a bill allowing Prince George's County to acquire hospital patient debt for the sole purpose of cancelling it and to require hospitals to stop collection activity on debt sold to the county.

"The bill authorizes a hospital to sell debt owed to the hospital by a patient for hospital services for the sole purpose of canceling the debt," committee staff read aloud. The reading said patients would not be responsible to the hospital or the county for any amount of debt that is sold, nor for interest, fees or costs associated with the sale.

Under the amendments described to the committee, hospitals that sell debt to Prince George's County must report the total dollar amount of debt sold, the total amount paid to the hospital, and the number of patients whose debt was sold to the State Health Services Cost Review Commission (HSCRC). The amendment also requires hospitals to dismiss any pending collection actions on debt purchased by the county and prohibits collection activities or collection on judgments for sold debt. Hospitals would be barred from reporting adverse information to credit reporting agencies based on sold debt.

Sponsor Delegate Ivey told the committee the bill was aligned with legislation passed last year and thanked advocates and committee members for their work. "This legislation is amended into the format of legislation that passed last year," Ivey said, and asked for a favorable report.

The amendments set eligibility criteria for debt the county may buy: the debt must be at least two years old, not expected to yield third-party reimbursement, and not be subject to an open insurance appeal. The measure also targets assistance to individuals with family income at or below 500% of the federal poverty level or who have medical debt exceeding 5% of family income. The amendment adds a two-year sunset and directs the county to seek vacation of judgments and removal of adverse credit reporting tied to sold debt.

Committee members moved the amendments and then the bill itself. Committee staff recorded attendance and a roll-call vote; the chair announced the bill had passed the committee and will proceed in the delegation process.

Why it matters: The measure is designed to remove certain medical debt from patients' ledgers and to prevent related collection and credit-reporting harms, while requiring reporting to the HSCRC so the payments are treated as offsets for hospitals' uncompensated care reporting. The bill also imposes eligibility and consumer-protection provisions intended to limit the program to longstanding, non-reimbursable balances.

The committee record shows the bill passed with a roll call; Delegate Barnes was recorded absent. The committee did not adopt a permanent policy in the session; the bill carries a two-year sunset as amended and will advance for further consideration.