On October 14, the Maryland Office of Financial Regulation (OFR) issued regulatory guidance explaining three new state laws governing the collection and reporting of medical debt. The guidance clarifies how House Bills 428, 1020, and 268, all effective October 1, 2025, alter the obligations of hospitals, debt collectors, and consumer reporting agencies.
The OFR guidance outlines the following key provisions:
- House Bill 428: Money Judgements and Liens. The bill requires debt collectors seeking a money judgement for medical debt to state in the complaint that the case involves medical debt and to include the debtor’s primary residence address. It also prohibits the use of any resulting judgment for placing a lien on the debtor’s owner-occupied primary residence. The bill further clarifies the definition of “medical debt,” confirming that it includes obligations owed to a person whose primary business is providing medical services, products, or devices, while excluding general-purpose credit cards unless they are issued solely for medical expenses. OFR noted that Maryland District Court forms have been updated to reflect these new requirements.
- House Bill 1020: Fair Medical Debt Reporting Act. Medical debt is now excluded entirely from consumer credit reports and may not be used in credit decisions. Providers and their agents are barred from disclosing medical debt to consumer reporting agencies, while reporting agencies themselves are prohibited from maintaining or furnishing reports that contain this information. The law further requires any agreement between a medical provider and a debt collector to include a clause prohibiting disclosure of medical debt to a reporting agency, with noncompliant contracts deemed void and unenforceable.
- House Bill 268: Hospital Debt Collection Standards. Hospitals remain subject to a three-year statute of limitations on medical debt but face new timing and notice requirements before pursuing collection. Patients must receive 240 days to apply for financial assistance before a hospital may file suit, and hospitals cannot pursue debts of $500 or less. The legislation also bars hospitals from reporting medical debt to credit agencies and from charging interest to patients who qualify for free or reduced-cost care.
Putting It Into Practice: Numerous states have enacted laws this year prohibiting the reporting of medical debt to consumer credit agencies, and Maryland’s guidance reflects this growing national shift (previously discussed here, here, here, here, and here). Other states are expected to follow suit as policymakers continue to focus on reducing the role of medical debt in credit reporting and collection practices. Entities engaged in collecting, furnishing, or reporting medical debt should proactively review their policies, complaint templates, and vendor agreements to ensure compliance across jurisdictions and prepare for further state-level action in the months ahead.