Maryland hospitals aren’t supposed to charge patients who can’t afford their emergency room visits. When state lawmakers found hospitals were collecting millions from them anyway, legislators took the unusual step of ordering hospitals to pay it back.
The trick has been figuring out how. And until they work out a process — and determine how much people are actually owed — no money will be returned.
Such a wide-scale effort hasn’t been undertaken before in Maryland, or perhaps anywhere.
“I’m not aware of other states doing this,” said Del. Lorig Charkoudian, a Montgomery County Democrat who co-sponsored the 2022 law.
Coming up with a plan encompasses dozens of hospitals and multiple state agencies and will require “complex policies and procedures” to protect patient privacy and securely swap data, according to the Health Services Cost Review Commission, the agency coordinating the effort. They’ll also have to find patients who’ve moved.
Refunds won’t begin before mid-2024 and are expected to take more than a year. Once the thorny process is done, it could serve as a model for other states with nonprofit hospitals that overcharged patients.
The hospitals, all nonprofits in Maryland, get tax breaks in exchange for providing charity care to low-income patients receiving emergency or medically necessary services. There is free care for those earning less than 200% of the federal poverty level (about $29,000 annually for individuals) and discounted care or those earning less than 300% (about $43,000).
A 2020 commission report to the General Assembly estimated hospitals may have sought payment from up to 60% of patients who qualified for charity care in 2017 and 2018. About 1% paid because they didn’t know they were entitled to free or discounted care, totaling some $120 million.
The commission warned their calculation was a bit back-of-the-envelope due to “data limitations.’’ In 2022, the legislature nonetheless ordered refunds for qualifying patients from 2017 through 2021.
“You’d like to think it wouldn’t be necessary — hospitals are already liable for broken promises,” said Barak Richman, a professor of law and business administration at Duke University who recently studied collection practices in North Carolina. “It’s just a question of enforcement, since self-policing doesn’t seem to work.”
He and others said the onus has largely been on patients to question bills or seek assistance from hospitals or advocacy groups. In Maryland, the attorney general’s Health Education and Advocacy Unit helps mediate such disputes when patients ask.
Aleithea Warmack, a spokeswoman for the attorney general’s office, said the unit does get calls from people who believe they were improperly billed. It’s also among the state agencies with a role in the refund process, which the legislation says may work like this:
Hospitals will identify patients who paid more than $25 for emergency or medically necessary care between 2017 and 2021. The state comptroller’s office will match names to tax returns of those earning below 200% of the federal poverty level, or $25,760 for an individual in 2021.
Other agencies will match names to those enrolled in their health, housing or food assistance programs. All the people identified will be asked to confirm their address to get a check in the mail. How they will confirm is still being worked out, and it’s not yet determined if people not identified in the process can request a refund, according to the coordinating commission.
Marceline White, executive director of the advocacy group Economic Action Maryland, which lobbied for the refunds, said there are clear issues: not just locating people who moved, but convincing them it’s not a hassle or a scam.
Many people will be excluded. Refunds are only for people who went to the hospital during a particular five-year period, and only for those due free care, not discounts.
“We’re not where we need to be,” she said. “But we believe this is the first bill or anything like this in the nation. … I think people are amazed we passed this restitution to patients.”
The law now allows patients to request charity care and a payment plan based on their income by asking at the hospital or calling the number on their bill.
The payment plans can’t exceed 5% of any patient’s annual income regardless of how much they earn, according to the 2022 law, though the details are still being worked out.
Several hospitals say they encourage patients to seek financial assistance and payment options if they face hardships. They publicize financial assistance policies online, on bills and on signs at the hospitals.
Lakesha Spence, a 39-year-old Baltimore woman, found there still are no guarantees.
She learned about charity care after being sued in 2016 and 2018 by Johns Hopkins Hospital, the latter instance after giving birth to her son. Court records show judgments against her for thousands of dollars. Her wages were garnished to pay.
After another emergency visit at Hopkins in 2021, she asked for help when the calls for payment began.
“I asked them for charity care, and they told me it didn’t exist. I know it probably wasn’t right,” said Spence, who said she was unemployed at the time. But she said, “They have more lawyers than I have time.”
Now she’s back in a job in security, and she plans to pay. If she does, she may be due a refund.
Johns Hopkins doesn’t comment on individual patients, but said in a statement the hospital system is “committed to providing affordable access to all patients in need of our care, regardless of their ability to pay medical bills.”
Hopkins said it helps patients access insurance and takes “extensive steps to help them understand our financial assistance policies, as well as their payment options.”
If Spence doesn’t pay, she is unlikely to be sued again. Hopkins says its policy has changed and it no longer sues patients with unpaid bills.
An analysis of court data by The Baltimore Banner shows virtually all hospitals in Maryland have at least temporarily stopped suing patients for medical debt. The reasons aren’t clear, but may be related to bad publicity over time or new patient protection laws.
Peyton Cory, a 40-year-old Baltimore County man, might have benefited from the repayment law if it had been in place earlier. He believes the medical and dental debt from his early 20s ended up preventing him from qualifying for a loan to cover a rowhouse he planned to buy in 2013.
He didn’t know about assistance programs then. But Cory said he was pleased to get a no-interest payment plan for a $2,500 hernia surgery bill last month at Mercy Medical Center in Baltimore.
He also stands to benefit from changes at the federal level that will restrict medical debt on his credit report. Cory hopes those changes and his current job in a car dealership service department will help him buy a house for himself and his young daughter.
“It’s all old debt. But that’s pretty much my only blemish on my credit,” he said.
Dan Collins, a Mercy spokesman, said the hospital stopped credit reporting in 2018 and automatically offers financial assistance to patients earning below 500% of the federal poverty level. It offers payment plans as low as $20 a month at the request of patients.
As for those refunds from hospitals around the state, stay tuned, said Amy Goodwin, spokeswoman for the Maryland Hospital Association: “Hospitals are preparing for their responsibilities under the statute,” she said in a statement. When they get directions, hospitals will “ensure patients who are eligible for repayment receive repayment,” she added Monday afternoon.