Three years ago, state officials tried to right a historical wrong by forcing Maryland hospitals to return at least $120 million they owed to thousands of low-income patients.

It would have been a groundbreaking move benefiting vulnerable patients who had qualified for free care but were charged anyway. The reform was seen as a potential balm after reports nationwide detailing how roughly health care systems have gone after poor patients who don’t pay their bills.

Instead, without saying a word publicly, officials this year pulled the plug on the refund initiative.

“It’s a huge injustice,” said Del. Lorig Charkoudian, a Montgomery County Democrat who co-sponsored the 2022 law requiring the repayments. “It’s devastating to know people aren’t getting their money back.”

The repayment saga began roughly five years ago with a startling number buried inside a wonky report from state regulators. They estimated patients overpaid for emergency care in 2017 alone by $60 million.

By law, hospitals are supposed to charge little to nothing for their poorer patients. But the state Health Services Cost Review Commission discovered that the hospitals in fact had charged up to 60% of them improperly.

The commission also found that the total amount of money the hospital improperly collected was roughly $60 million in 2017 and the same amount in 2018.

Charkoudian and other lawmakers said the overcharging left them aghast, and they took the unusual step of passing a law requiring hospitals to identify and repay patients from 2017 through 2022.

Maryland was hardly alone. North Carolina officials, for example, found hospitals improperly had withheld $149.2 million in so-called charity care in a 2022 report. And an examination by the consumer group Dollar For found nonprofit hospitals across the country failed to provide at least $14 billion annually in aid to eligible patients.

Several states have sought stronger guardrails on hospitals. Washington sued to force a hospital system to forgive $20 million in debt and pay $2.22 million in refunds. But Charkoudian said she believes Maryland law was the first to force a statewide repayment plan.

However, the legislation did not provide a road map for how that should be done. And, although hospitals often go to great lengths to collect on their own bills, they claimed returning money wasn’t so simple.

They would have to sift through all their old cases and determine if patients qualified for free or discounted care at the time. And there are a lot of them because emergency rooms see hundreds of thousands of patients a year.

The fix the hospitals and state officials came up with relied on matching people with documents to reveal their income, including tax filings or verified qualifications for public food or housing assistance. But state agencies later said they were barred from sharing such data.

So Del. Bonnie Cullison, a Montgomery County Democrat, introduced a bill this year to sidestep the privacy problem. But, after debate, the proposed fix went nowhere. “We didn’t think it would hold up in court,” Cullison said.

With the hospitals and state at an impasse, the repayment effort died in April when the legislative session ended. There was no announcement and no notice to patients because the hospitals never determined whom they overcharged.

“We are deeply disappointed,” said Marceline White, executive director of the consumer advocacy group Economic Action Maryland. Still, she called on the state, hospitals and advocates to “double down and figure out what we need to do to make sure everyone who qualifies for financial assistance receives it.”

Hospitals say they are trying. They post notices on bills, on websites and in digital portals, as well as on signs in lobbies and waiting areas, according to the Maryland Hospital Association.

“Maryland hospitals make every effort to identify patients who are eligible for free and discounted care and connect them with the financial support they need. Patients with payment concerns should contact the hospital or provider directly,” according to a statement from the association.

Despite the law’s failure, advocates and lawmakers say they are trying to remain vigilant to address future overcharging.

White’s consumer group is working with Dollar For, the national organization that helps eligible people with medical debt qualify for financial assistance.

And officials at the Office of the Attorney General also offer assistance in mediating bills. Those who can’t resolve disputes over their medical bills can call the office’s Health Education and Advocacy Unit. That includes patients who believe they were due those refunds from past ER visits, though officials acknowledge older bills can be tougher cases.

State regulators plan to begin more frequent and timely audits, which could yield a quicker turnaround if hospitals continue to overcharge patients.

There also is a new Maryland law that, among other protections, requires hospitals to get patients’ signatures on a form outlining financial assistance policies. Patients will be able to apply for financial help at the time they receive medical services and up to 240 days afterward.

“Ultimately we have to fix the system,” Charkoudian said. “But in the meantime we need to make sure individuals are not made destitute because they get sick.”