Maryland Clarifies Medical Debt Rules as States Fill Federal Void 

In an October notice, the (OFR) explained how three new laws —HBs 428, 1020 and 268, which took effect October 1 — will reshape the collection and reporting of medical debt. The Fair Medical Debt Reporting Act (HB 1020 ) bars providers and their agents from disclosing consumers’ medical debt to credit bureaus and prohibits bureaus from maintaining or furnishing reports that contain medical debt.

HB 428 requires any lawsuit seeking a money judgment on medical debt to be labeled as such, blocks the placement of liens on an owner-occupied primary residence, and clarifies the definition of “medical debt” (excluding general-purpose credit cards).

The third law, HB 268, requires hospitals to give patients 240 days to apply for financial assistance before suing, cannot pursue debts of $500 or less, may not report medical debt, and cannot charge interest to patients who qualify for free or discounted care. OFR notes court forms have been updated to reflect the changes.

Maryland’s move lands amid fast-changing federal ground. In January, the Consumer Financial Protection Bureau (CFPB) finalized a nationwide rule to remove medical bills from credit reports and bar lenders from using them in credit decisions. The agency said the action would erase $49 billion in medical debt from the files of about 15 million people. But in July, a federal judge in Texas vacated the rule.

The opinion followed the newly appointed leadership of CFPB under President Trump first staying the effective date and then joining a motion to vacate, leaving no federal prohibition in place and shifting the fight back to states. In the runup to that ruling, the agency had already asked a court to scrap the regulation, per Reuters, signaling the policy reversal under the new administration.

Read more: CVS Health Explores Potential Breakup Amid Investor Pressure: Report

 With federal protections sidelined, this year as seen a wave of state statutes that either ban or sharply limit medical-debt reporting. According to the National Consumer Law Center’s July 2025 survey, at least 15 states have enacted prohibitions that target the use of medical-debt information by consumer reporting agencies (CRAs), furnishers (providers/collectors), and/or creditors.

Other states enacting restrictions on the use of medical debt include California, Connecticut, Illinois, Maine, Maryland, Minnesota, New Jersey, New York, Oregon  Rhode Island, Vermont, and Washington. While details vary, the throughline is keeping medical bills off credit files and out of credit decisions.

Some states are pairing credit reporting bans with broader consumer protections. Minnesota’s Debt Fairness Act not only bars reporting medical debt to CRAs, it also prohibits denying medically necessary care due to unpaid bills and ends automatic spousal liability for medical debt. The Minnesota Attorney General emphasized the changes in public guidance and enforcement actions.

Oregon has tightened hospital debt practices by requiring financial assistance screening before transfer to collections and limiting or eliminating interest for eligible patients—provisions that began to take effect in mid2024 and were expanded in 2025 legislation.

States are also curbing aggressive collection remedies. A July 2025 analysis by the Commonwealth Fund finds 13 states now prohibit or limit property liens and foreclosures tied to medical debt, with Nevada, New York, North Carolina, Maryland, and Virginia among those that fully bar both remedies.