1. A. Scope.

   1. (1) As described in this regulation, the Guidelines for Hospital Payment Plans apply to any income-based payment plan offered by a hospital to a patient to pay for medically necessary hospital services after the services are provided.
   2. (2) “Income” in this regulation means household monthly income.

   3. (3) Prepayment Plans. Nothing in the Guidelines prevents a hospital from offering patients arrangements to make payments prior to service, provided that:

      1. (a) A hospital may not require or steer a patient to enter into such an arrangement solely to avoid the application of these Guidelines;

      2. (b) Before a hospital requests pre-payment for a hospital service, the hospital shall:

         1. (i) Comply with the notice provisions of Health-General Article, §19-214.1, Annotated Code of Maryland, and Regulations .03 and .06 of this chapter;
         2. (ii) Advise the patient about the availability of financial assistance;
         3. (iii) Process any request for financial assistance; and
         4. (iv) Advise the patient about the availability of income-based payment plans, including information about the 5 percent cap on monthly payment amounts under §F(1) of this regulation; and
      3. (c) Such an arrangement terminates once the hospital service is rendered.
   4. (4) Unregulated Services. These Guidelines apply only to hospital services that are regulated by the Commission. These Guidelines do not apply to services that are not regulated by the Commission, including physician services.
   5. (5) Limitation of the Guidelines. These Guidelines do not prevent hospitals from extending payment plans for services, such as physician services, or at times that are outside the parameters of the Guidelines. Except as otherwise required by law or regulation, payment plans that are outside the parameters of these Guidelines are not subject to the Guidelines.

2. B. Access to Income-Based Payment Plans.

   1. (1) Availability of Income-Based Payment Plans. Maryland hospitals shall make income-based payment plans available to all patients who are Maryland residents, including individuals temporarily residing in Maryland due to work or school, irrespective of their:

      1. (a) Insurance status;
      2. (b) Citizenship status;
      3. (c) Immigration status; or
      4. (d) Eligibility for reduced-cost medically necessary care, including reduced-cost medically necessary care due to financial hardship, under Regulation .06 of this chapter.

   2. (2) Treatment of Nonresidents and Unregulated Services.

      1. (a) These Guidelines do not prevent a hospital from extending payment plans to patients who are not described in §B(1) of this regulation.
      2. (b) These Guidelines do not prevent a hospital from extending payment plans to patients for services that are not regulated by the Commission.
      3. (c) Except as required by §U of this regulation or by other law or regulation, payment plans for patients which are not described in §B(1) of this regulation and payment plans for services that are not regulated by the Commission are not subject to the Guidelines under this regulation.

3. C. Notice Requirements.

   1. (1) Notice of Availability of an Income-Based Payment Plan.

      1. (a) Posted Notice.

         1. (i) A notice shall be posted in conspicuous places throughout the hospital, including the billing office, informing Maryland residents of the availability of an income-based payment plan and whom to contact at the hospital for additional information.
         2. (ii) If the hospital uses a vendor to assist with financial assistance eligibility, billing, or debt collection, such as a debt collector or eligibility vendor, the hospital shall ensure that the vendor posts a notice in a conspicuous place on their website or online payment portal, informing Maryland residents of the availability of an income-based payment plan and whom to contact at the hospital or debt collector for additional information. Placement on the website or online payment portal should be based on the best interest of the patient.
      2. (b) Information Sheet. A written notice of the availability of an income-based payment plan shall be contained in the information sheet required under Regulation .03 of this chapter, including clarity on the availability of income-based payment plans for Maryland residents, and, if payment plans for non-residents are included in the hospital’s credit and collection policy, the availability of such plans for non-residents.
      3. (c) Before a Prepayment Plan. Before a patient enters into a prepayment plan as described in §A(2) of this regulation for a medically necessary hospital service, a hospital shall provide a written notice of the availability of an income-based payment plan to a patient.
      4. (d) On a Bill. On the same page of the bill that includes the amount due and due date, the hospital shall provide notice that a lower monthly payment amount may be possible through an income-based plan, in the same font and style as the total amount due notification.
      5. (e) Online Payment Portal. On both the page of the online payment portal that states the amount due, and where the consumer enters the amount being paid by the consumer, the hospital shall provide, in the same font and style as the amount due notification, notice informing Maryland residents of the availability of an income-based monthly payment plan and information, including a telephone number and email address, in order to contact the hospital for additional information.

   2. (2) Notice of Terms Before Execution. A hospital shall provide written notice of the terms of an income-based payment plan to a patient before the patient agrees to enter the income-based payment plan. The terms of the income-based payment plan shall include:

      1. (a) The amount of medical debt owed to the hospital;
      2. (b) The interest rate applied to the income-based payment plan and the total amount of interest expected to be paid by the patient under the income-based payment plan;
      3. (c) The amount of each periodic payment expected from the patient under the income-based payment plan;
      4. (d) The number of periodic payments expected from the patient under the income-based payment plan;
      5. (e) The expected due dates for each payment from the patient;
      6. (f) The expected date by which the account will be paid off in full;
      7. (g) The treatment of any missed payments, including missed payments and default as described in §P and T of this regulation;
      8. (h) That there are no penalties for early payments; and
      9. (i) Whether the hospital plans to apply a periodic recalculation of monthly payment amounts as described in §N of this regulation and the process for such recalculation.
   3. (3) Notice of Plan After Execution. A hospital shall promptly provide a written income-based payment plan, including items listed in §C(2) of this regulation, to the patient following execution by all parties. The income-based payment plan shall be provided to the patient at least 20 days before the due date of the patient’s first payment under the income-based payment plan.

4. D. Financial Assistance.

   1. (1) Before entering into an income-based payment plan with a patient, hospitals shall evaluate if the patient is eligible for financial assistance, including free and reduced-cost medically necessary care, including reduced-cost medically necessary care due to financial hardship, in accordance with Regulation .06 of this chapter.

   2. (2) Hospitals shall:

      1. (a) Apply the financial assistance reduction before entering into an income-based payment plan with a patient; and
      2. (b) Use any information collected for determining financial assistance under Regulation .06 of this chapter to establish the 5 percent monthly payment threshold for payment plans under Regulation .05F of this chapter.
5. E. Offer Required. Hospitals must offer income-based payment plans that meet the requirements of these Guidelines.

6. F. Monthly Payment Amounts.

   1. (1) Under an income-based payment plan subject to these Guidelines, a hospital may not require a patient to make total payments in a month that exceed 5 percent of the lesser of the patient’s household income.
   2. (2) §F(1) of this regulation applies to total amounts due under the plan, including both principal and interest, but does not apply to any catch-up payments, such as payments described under §P(1) of this regulation.
   3. (3) A hospital shall calculate the monthly payment amount threshold under §F(1) of this regulation by dividing income level by household size and multiplying by .05 percent.

   4. (4) Determining the Household Size.

      1. (a) The hospital shall determine the size of the patient’s household using the number reported on tax returns, if provided the number of tax filers and dependents listed on the tax return provided by the patient. For example, if a married couple files jointly and has three dependents, the number of tax filers and dependents would equal five.
      2. (b) If a patient files as an individual and the patient is not a dependent and has no dependents, the number of tax filers would equal one.
      3. (c) If the patient has not provided a tax return, the hospital shall ask the patient to provide the number of individuals in the household.
7. G. Expenses. A hospital may reduce the amount of the monthly payment due under an income-based payment plan upon consideration of household expense information provided by a patient.

8. H. Application to Multiple Income-based Payment Plans.

   1. (1) Hospitals. A hospital shall ensure that the total monthly payment amount for all income-based payment plans provided to a patient by the hospital, when added up collectively, does not exceed the income limitation under §F(1) of this regulation.
   2. (2) Hospital System. A hospital system shall ensure that the total monthly payment amount for all income-based payment plans provided to a patient by all hospitals in the hospital system, when added up collectively, does not exceed the income limitation under §F(1) of this regulation.
9. I. Duration of Income-Based Payment Plan. The duration of an income-based payment plan, in months, is determined by the total amount owed, and interest, if interest applies, divided by the total amount of the payment due each month, subject to the limitation that no monthly payment may exceed 5 percent of the patient’s income as calculated under §F(1)of this regulation.
10. J. Solicitation of Early Payments Prohibited. Hospitals may not solicit, steer, or mandate patients to pay an amount in excess of the monthly payment amount provided for in an income-based payment plan.
11. K. Application of Partial Payments. A hospital shall apply partial payments in a manner most favorable to the patient.

12. L. Interest and Fees.

    1. (1) No Interest for Patients Eligible for Financial Assistance. For a patient who is eligible for free or reduced-cost medically necessary care under the hospital’s financial assistance policy under Regulation .06 of this chapter and Health-General Article, §19–214.1, Annotated Code of Maryland, the hospital may not charge interest or fees on any medical debt amount owed under an income-based payment plan.
    2. (2) Allowable Interest. A hospital may charge interest under an income-based payment plan for a patient who is not eligible for free or reduced-cost medically necessary care, as described in §L of this regulation. A hospital is not required to charge interest for a payment plan.

    3. (3) Interest Rate.

       1. (a) An income-based payment plan may not provide for interest in excess of an effective rate of simple interest of 6 percent per annum on the unpaid principal balance of the payment plan.
       2. (b) A hospital may not set an interest rate that results in negative amortization.
       3. (c) Payers subject to Insurance Article, §15-1005, Annotated Code of Maryland, shall comply with its provisions.
    4. (4) Timing. Interest may not begin before 240 days after the initial bill is provided.
    5. (5) Late payments. A hospital may not charge additional fees or interest for late payments.

13. M. Early Payment.

    1. (1) Prepayment Allowed.

       1. (a) Patients may, on a voluntary basis, pre-pay, in whole or in part, any amounts owed under an income-based payment plan.
       2. (b) Any prepayment made under §M(1) of this regulation is not subject to the monthly income payment limitations of §F(1) of this regulation.
    2. (2) No Fees or Penalties. A hospital may not assess fees or otherwise penalize early payment of an income-based payment plan.

14. N. Limited Modifications of Income-based Payment Plans.

    1. (1) Change in Income. If a patient with an income-based payment plan notifies a hospital that the patient’s income has changed, then the hospital shall offer to modify the income-based payment plan to meet the requirement of §N(6) of this regulation.
    2. (2) Expenses. Before modifying an income-based payment plan, a hospital shall consider information provided by a patient about changes in household expenses in considering a patient request to modify a payment plan.
    3. (3) No Increase in Interest Rate. A hospital may not increase the interest rate on an income-based payment plan when making a modification to an income-based payment plan under this Guideline.
    4. (4) Limitation on Payment Amount. A hospital may not modify an income-based payment plan in a way that requires a patient to make a monthly payment that exceeds the percent of the patient’s income used to set the monthly payment amount under the initial income-based payment plan as provided for in §F of this regulation.
    5. (5) Change in Duration. The duration of a modified income-based payment plan, in months, is determined by the total amount owed, and interest, if interest applies, divided by the total amount of the payment due each month, subject to the limitation under §F of this regulation.

    6. (6) Process for Modifying an Income-Based Payment Plan.

       1. (a) Prompt Response to Patient Request. If a patient requests a modification to the terms of the payment plan, the hospital shall respond in a timely manner and may not refer the outstanding balance owed to a collection agency or for legal action until 30 days after providing a written response to the patient’s request for a modification of the payment plan.
       2. (b) Reconsideration for Financial Assistance. If a patient makes a request for modification of a payment plan, the hospital shall consider if such patient is eligible for financial assistance, including free medically necessary care, reduced-cost medically necessary care, and reduced-cost care due to financial hardship under Regulation .06 of this chapter. The hospital will apply the financial assistance reduction in its modification of the payment plan.
       3. (c) Mutual Agreement. A hospital may not modify a payment plan without mutual agreement between the hospital and the patient before the changes are made.
       4. (d) Notice of Terms. The hospital shall provide the patient with a written notice of all payment plan terms, consistent with the requirements of §C of this regulation, upon modifying a payment plan under this Guideline.

15. O. Hospital-Initiated Changes to Income-Based Payment Plans Based on Changes to Patient Income.

    1. (1) Recalculation Allowed. A hospital may, in the terms of an initial income-based payment plan under §C(2) of this regulation that exceeds 3 years in length, provide for periodic recalculations to the amount of the monthly payments and the duration of the payment plan based on changes in the patient’s income as subject to and calculated under §N(5) of this regulation.

    2. (2) Notice Included in Initial Income-Based Payment Plan.

       1. (a) The hospital may only recalculate payment amounts under an income-based payment plan if the hospital included the process for such recalculation in the notice provided to the patient before they entered into the income-based payment plan, in accordance with §C(2) of this regulation.
       2. (b) The patient’s agreement to enter into the income-based payment plan after receiving that notice constitutes consent to the payment recalculations allowed under §P of this regulation.
    3. (3) Limitations on Modification Apply. The provisions of §N of this regulation relating to limitations of payment plan modifications apply to payment recalculations for income-based payment plans under §O of this regulation.
    4. (4) Frequency of Recalculation. A hospital may not seek a recalculation of the monthly payment amount under an income-based payment plan, as provided for under §O(1) of this regulation more than once every 3 years.
    5. (5) Treatment of Missing Information. If a patient does not provide income information on the request of the hospital seeking to make a change to an income-based payment plan under §O of this regulation and the patient is in good standing on the patient's payments under the income-based payment plan, the hospital may not change the monthly payment amounts under the income-based payment plan.

16. P. Treatment of Missed Payments.

    1. (1) First Missed Payment.

       1. (a) A hospital may not deem a patient to be noncompliant with an income-based payment plan if the patient makes at least 11 scheduled monthly payments within a 12-month period.
       2. (b) Subject to §P(1)(c) of this regulation, the hospital shall permit the patient to repay the missed payment amount at any time, as determined by the patient, including through a set of partial payments.

       3. (c) No later than 30 days after the first missed payment in a 12-month period, the hospital shall notify the patient of the missed payment and inform the patient that the patient may be in default if they do not pay the amount of the missed payment within 12 months or if they miss additional payments within the 12-month period. The notice will give the patient the option to pay the missed payment by paying the amount of the missed payments in one of the following ways:

          1. (i) 11 increments over the subsequent 11 months;
          2. (ii) A single payment; or
          3. (iii) Another approach, as specified by the patient.
       4. (d) With respect to a patient that has missed a single monthly payment in a 12-month period, the hospital shall provide the patient with a method to designate whether any amount of a payment paid in the subsequent 12-month period is to be applied to the amount of missed payment or applied in a different manner.
       5. (e) With respect to a patient that has missed a single monthly payment in a 12-month period, if the hospital receives a payment and the patient has not designated how that payment is to be applied, the hospital shall first apply the amount to any payment that is due in the 31-day period following the date the payment is received. If there is no payment due in the next month, the hospital shall apply the amount of the payment to the missed payment. If the amount of the payment exceeds the amount of any payment that is due in the 31-day period following the date the payment is received, the excess amount shall be applied to the missed payment.
       6. (f) The hospital may consider a patient to be in default on the income-based payment plan if the missed payment is not repaid in full by the end of the 12-month period that begins on the date of the missed payment under §P(1) of this regulation.

    2. (2) Additional Missed Payments.

       1. (a) A hospital may forbear the amount of any additional missed payments that occur in a 12-month period.
       2. (b) If a hospital forbears the amount of any additional missed payments that occur in a 12-month period, the hospital shall allow the patient to continue to participate in the income-based payment plan.
       3. (c) If a hospital forbears the amount of any additional missed payments that occur in a 12-month period, the hospital may not refer the outstanding balance owed to a collection agency or for legal action.
       4. (d) The hospital shall recapitalize the amount of any missed payments that were subject to forbearance under this §P of this regulation as additional payments at the end of the income-based payment plan, thereby extending the length of the income-based payment plan.
       5. (e) The hospital shall provide written notice to the patient of the treatment of the missed payments, including any extension of the length of the income-based payment plan.
17. Q. Treatment of Loans and Extension of Credit. After a hospital service is provided to the patient, a hospital, hospital affiliate, or third-party in partnership with a hospital may not make any loan or extension of credit to the patient in connection with a medically necessary hospital service that is inconsistent with the guidelines for payment plans in this regulation resulting from that service.
18. R. Application of Credit Provisions of Maryland Commercial Law Article and Licensing Provisions of Financial Institutions Article. An income-based payment plan is an extension of credit subject to Maryland credit regulations under Commercial Law Article, Title 12, Annotated Code of Maryland and any applicable licensing provisions of Financial Institutions Article, Title 11, Annotated Code of Maryland.
19. S. Books and Records. A hospital shall retain books and records on income-based payment plans for at least 3 years after the income-based payment plan is closed.

20. T. Default.

    1. (1) If a patient defaults on an income-based payment plan and the parties are unable to agree to a modification, then the hospital shall follow the provisions of its credit and collection policy established in accordance with Regulation .04 of this chapter, before a hospital may write this medical debt off as bad debt.
    2. (2) With respect to the amounts covered by the income-based payment plans, a patient who is on an income-based payment plan and is not in default on that payment plan may not be considered in arrears on their debt to the hospital when the hospital is making decisions about scheduling health care services.

21. U. Non-Income-Based Payment Plans.

    1. (1) Other Payment Plans Allowed. A hospital may offer a non-income-based payment plan under these Guidelines, but must first offer the patient an income-based payment plan.

    2. (2) Application of Guidelines. Consistent with the Guidelines for Hospital Payment Plans and consistent with the intent of Health-General Article, §19-214.2, Annotated Code of Maryland, the following provisions of this regulation apply to non-income-based payment plans in the same manner such provisions apply to income-based payment plans:

       1. (a) §A of this regulation, regarding scope;
       2. (b) §B of this regulation, regarding access to payment plans;
       3. (c) §C(2) of this regulation, regarding notice of payment plan terms before execution;
       4. (d) §C(3) of this regulation, regarding notice of plan after execution;
       5. (e) §D of this regulation, regarding financial assistance;
       6. (f) §L of this regulation, regarding interest and fees;
       7. (g) §M(1)(a) and (2) of this regulation, regarding early payments;
       8. (h) §N(6) of this regulation, regarding modifications of payment plans;
       9. (i) §Q of this regulation, relating to treatment of loans and extensions of credit;
       10. (j) §R of this regulation, relating to the application of credit provisions of Maryland Commercial Law Article and the licensing provisions of Financial Institutions Article;
       11. (k) §S of this regulation, relating to books and records; and
       12. (l) §T of this regulation, relating to default.

    3. (3) Notice.

       1. (a) Notice of Terms Before Execution. In addition to complying with the terms of §C(2) of this regulation, the hospital must include notice that the patient may apply for an income-based payment plan at any time in the notice of terms before execution of a non-income-based payment plan.
       2. (b) Notice of Plan After Execution. The hospital must include the notice required in §U(3)(a) of this regulation in the notice of the payment plan after execution that is required by §C(3) of this regulation.
       3. (c) Notice with Bills. Each bill for a non-income-based payment plan shall include a notice that informs the patient that income-based payment plans are available, which could result in lower monthly payments and provides information on how to apply for such plans.

    4. (4) Consent. Before entering into a non-income-based repayment plan with a patient, the hospital must obtain consent from the patient that records that the patient affirms the following:

       1. (a) The hospital offered the patient an income-based payment plan;
       2. (b) The income-based payment plan limits monthly payment amounts to 5 percent of the patient’s monthly income;
       3. (c) The income-based payment plan may result in lower monthly payment amounts than the monthly payment amounts under the non-income-based repayment plan;
       4. (d) The patient has the opportunity to disclose their income and determine the payment amount under the income-based payment plan; and
       5. (e) The patient is declining to enter an income-based payment plan and is consenting to enter a non-income-based repayment plan.

    5. (5) Modification of a Non-Income-Based Payment Plan: In addition to complying with the terms of §N(6) of this regulation, before modifying a non-income-based payment plan:

       1. (a) The hospital shall offer the patient an income-based payment plan; and,
       2. (b) If the patient declines the income-based payment plan, obtain the consent required under §U(4) of this regulation.

    6. (6) Default on a Non-Income-Based Payment Plan.

       1. (a) If the patient defaults on a non-income-based payment plan, the hospital must offer an income-based payment plan to the patient before the hospital follows the provisions of its credit and collection policy to collect the debt.
       2. (b) The offer provided under §U(6)(a) of this regulation must be sent separately from a bill.

22. V. Steering.

    1. (1) A hospital may not steer patients to non-income-based payment plans, or third-party credit providers, in such a manner that discourages patients from entering into income-based payment plans.
    2. (2) A hospital may not steer patients to revolving credit products in such a manner that discourages patients from entering into either income-based payment plans or non-income based payment plans under this regulation.

Authority: Health-General Article, §§19-214.2, 19-214.3, 19-207, and 19-219, Annotated Code of Maryland

Effective date: December 11, 2025 (52:24 Md. R. 1198)