LAWRENCE J. HOGAN, JR., Governor Ch. 297
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Chapter 297
(House Bill 1148)
AN ACT concerning
Health Insurance – Two–Sided Incentive Arrangements and Capitated
Payments – Authorization
FOR the purpose of providing that value–based arrangements established under certain
provisions of federal law are exempt from certain provisions of State law regulating
health care practitioner referrals; providing that a health care practitioner or set of
health care practitioners that accepts capitated payments in a certain manner but
does not perform certain other acts is not considered to be performing acts of an
insurance business; authorizing certain bonus or incentive–based compensation to
include a two–sided incentive arrangement through which a carrier may recoup
funds paid to an eligible provider in accordance with a written contract that includes
certain requirements; prohibiting a carrier from requiring participation in a carrier’s
bonus or incentive–based compensation or two–sided incentive arrangement
program or reducing a fee schedule based on nonparticipation; prohibiting
participation in a two–sided incentive arrangement from being the sole opportunity
for increases in reimbursement; and generally relating to health insurance,
two–sided incentive arrangements, and capitated payments.
BY repealing and reenacting, with amendments,
Article – Health Occupations
Section 1–302(d)(12)
Annotated Code of Maryland
(2021 Replacement Volume)
BY repealing and reenacting, with amendments,
Article – Insurance
Section 4–205(a), 15–113, and 15–1008(b)
Annotated Code of Maryland
(2017 Replacement Volume and 2021 Supplement)
BY repealing and reenacting, without amendments,
Article – Insurance
Section 4–205(b) and (c) and 15–1008(c)
Annotated Code of Maryland
(2017 Replacement Volume and 2021 Supplement)
BY adding to
Article – Insurance
Section 15–2101 and 15–2102 to be under the new subtitle “Subtitle 21. Capitated
Payments”
Annotated Code of Maryland Ch. 297 2022 LAWS OF MARYLAND
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(2017 Replacement Volume and 2021 Supplement)
Preamble
WHEREAS, Value–based care is a health care practitioner payment structure that
ties practitioner revenue to improved health outcomes and the value of services delivered
rather than the volume of services provided; and
WHEREAS, Value–based arrangements may help to reduce disparities, expand
access to care, and improve outcomes, quality, and affordability; and
WHEREAS, Value–based care models promote the Triple Aim framework used by
the Centers for Medicare and Medicaid Services to optimize health care systems through
better care and experience for individuals, better health for populations, and lower per
capita costs with demonstrated improvements in quality, cost–savings, and better
management of chronic illnesses; and
WHEREAS, Value–based care models continue to show promising results and
expand throughout the rest of the country and in Medicare and Medicaid, with broad
support from both public and private stakeholders; and
WHEREAS, Hospitals, health care practitioners, and payers should be allowed to
voluntarily participate in patient–focused, outcome–driven, value–based reimbursement
arrangements in Maryland’s commercial insurance markets that seek to align with
value–based programs under Maryland’s Total Cost of Care model and ensure that
practitioners have adequate contract protections and that consumers continue to have
access to high–quality care that promotes better health outcomes; and
WHEREAS, Maryland has unique statutory barriers precluding commercial payers
from entering into certain value–based care arrangements outside of Maryland’s Total Cost
of Care model compared to other states in the nation; and
WHEREAS, In Maryland, changes are needed to the health care practitioner bonus
and other compensation provisions applicable to the commercial market to allow
practitioners to enter into both two–sided incentive and capitation arrangements with
commercial plans as they do in other states and the Medicare and Medicaid segments; now,
therefore,
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Health Occupations
1–302.
(d) The provisions of this section do not apply to: LAWRENCE J. HOGAN, JR., Governor Ch. 297
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(12) Subject to subsection (f) of this section, a health care practitioner who
has a compensation arrangement with a health care entity, if the compensation
arrangement is funded by or paid under:
(i) A Medicare shared savings program accountable care
organization authorized under 42 U.S.C. § 1395jjj;
(ii) As authorized under 42 U.S.C. § 1315a:
1. An advance payment accountable care organization
model;
2. A pioneer accountable care organization model; or
3. A next generation accountable care organization model;
(iii) An alternative payment model approved by the federal Centers
for Medicare and Medicaid Services; [or]
(iv) Another model approved by the federal Centers for Medicare and
Medicaid Services that may be applied to health care services provided to both Medicare
beneficiaries and individuals who are not Medicare beneficiaries; OR
(V) A VALUE–BASED ARRANGEMENT TH AT MEETS THE
REQUIREMENTS OF 42 C.F.R. § 411.357(AA)(1) THROUGH (3).
Article – Insurance
4–205.
(a) This section does not apply to:
(1) the lawful transaction of surplus lines insurance;
(2) the lawful transaction of reinsurance by insurers;
(3) transactions in the State that involve, and are subsequent to the
issuance of, a policy that was lawfully solicited, written, and delivered outside of the State
covering only a subject of insurance not resident, located, or expressly to be performed in
the State at the time of issuance of the policy;
(4) transactions that involve insurance contracts that are independently
procured through negotiations occurring entirely outside of the State and that are reported
and on which the premium tax is paid in accordance with §§ 4–210 and 4–211 of this
subtitle; Ch. 297 2022 LAWS OF MARYLAND
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(5) an attorney while acting in the ordinary relation of attorney and client
in the adjustment of claims or losses; [or]
(6) unless otherwise determined by the Commissioner, transactions in the
State that involve group or blanket insurance or group annuities if the master policy of the
group was lawfully issued and delivered in another state in which the person was
authorized to engage in insurance business; OR
(7) A HEALTH CARE PRACTI TIONER OR SET OF HEA LTH CARE
PRACTITIONERS , AS DEFINED IN § 15–113 OF THIS ARTICLE , THAT ACCEPTS
CAPITATED PAYMENTS I N ACCORDANCE WITH § 15–2102 OF THIS ARTICLE , BUT
PERFORMS NO OTHER AC TS CONSIDERED ACTS O F AN INSURANCE BUSIN ESS.
(b) An insurer or other person may not, directly or indirectly, do any of the acts
of an insurance business set forth in subsection (c) of this section, except as provided by
and in accordance with the specific authorization of statute.
(c) Any of the following acts in the State, effected by mail or otherwise, is
considered to be doing an insurance business in the State:
(1) making or proposing to make, as an insurer, an insurance contract;
(2) making or proposing to make, as guarantor or surety insurer, a contract
of guaranty or suretyship as a vocation and not merely incidental to another legitimate
business or activity of the guarantor or surety insurer;
(3) taking or receiving an application for insurance;
(4) receiving or collecting premiums, commissions, membership fees,
assessments, dues, or other consideration for insurance;
(5) issuing or delivering an insurance contract to a resident of the State or
a person authorized to do business in the State;
(6) except as provided in subsection (d) of this section, with respect to a
subject of insurance resident, located, or to be performed in the State, directly or indirectly
acting as an insurance producer for, or otherwise representing or helping on behalf of
another, an insurer or other person to:
(i) solicit, negotiate, procure, or effect insurance or the renewal of
insurance;
(ii) disseminate information about coverage or rates;
(iii) forward an application; LAWRENCE J. HOGAN, JR., Governor Ch. 297
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(iv) deliver a policy or insurance contract;
(v) inspect risks;
(vi) fix rates;
(vii) investigate or adjust claims or losses;
(viii) transact matters arising out of an insurance contract after the
insurance contract becomes effective; or
(ix) in any other manner represent or help an insurer or other person
to transact insurance business;
(7) doing any kind of insurance business specifically recognized as doing
an insurance business under statutes relating to insurance;
(8) doing or proposing to do any insurance business that is substantially
equivalent to any act listed in this subsection in a manner designed to evade the statutes
relating to insurance; or
(9) as an insurer transacting any other business in the State.
15–113.
(a) (1) In this section the following words have the meanings indicated.
(2) “Carrier” means:
(i) an insurer;
(ii) a nonprofit health service plan;
(iii) a health maintenance organization;
(iv) a dental plan organization; or
(v) any other person that provides health benefit plans subject to
regulation by the State.
(3) “ELIGIBLE PROVIDER ” MEANS:
(I) A LICENSED PHYSICIAN , AS DEFINED IN § 14–101 OF THE
HEALTH OCCUPATIONS ARTICLE, WHO VOLUNTARILY PART ICIPATES IN A
TWO–SIDED INCENTIVE ARRA NGEMENT; OR Ch. 297 2022 LAWS OF MARYLAND
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(II) A SET OF HEALTH CARE PRACTITIONERS THAT
VOLUNTARILY PARTICIP ATE IN A TWO–SIDED INCENTIVE ARRA NGEMENT.
[(3)] (4) “Health care practitioner” means an individual who is licensed,
certified, or otherwise authorized under the Health Occupations Article to provide health
care services.
(5) “SET OF HEALTH CARE PR ACTITIONERS” MEANS:
(I) A GROUP PRACTICE ;
(II) A CLINICALLY INTEGRA TED ORGANIZATION EST ABLISHED
IN ACCORDANCE WITH SUBTITLE 19 OF THIS TITLE;
(III) AN ACCOUNTABLE CARE ORGANIZATION ESTABLI SHED IN
ACCORDANCE WITH 42 U.S.C. § 1395JJJ AND ANY APPLICAB LE FEDERAL
REGULATIONS ; OR
(IV) A CLINICALLY INTEGRA TED NETWORK THAT IS A PROVIDER
ENTITY THAT MEETS TH E CRITERIA ESTABLISH ED IN GUIDANCE ISSUED BY T HE
FEDERAL TRADE COMMISSION, INCLUDING A NETWORK OF BEHAVIORAL HEALTH
CARE PROGRAMS LICENS ED UNDER § 7.5–401 OF THE HEALTH – GENERAL ARTICLE.
(6) “TWO–SIDED INCENTIVE ARRA NGEMENT” MEANS AN
ARRANGEMENT BETWEEN AN ELIGIBLE PROVIDER AND A CARRIER IN WHICH T HE
ELIGIBLE PROVIDER MA Y EARN AN INCENTIVE AND A CARRIER MAY RE COUP FUNDS
FROM THE ELIGIBLE PR OVIDER IN ACCORDANCE WITH THE TERMS OF A CONTRACT
ENTERED INTO WITH TH E ELIGIBLE PROVIDER THAT MEETS THE REQUI REMENTS OF
THIS SECTION.
(b) A carrier may not reimburse a health care practitioner in an amount less than
the sum or rate negotiated in the carrier’s provider contract with the health care
practitioner.
(c) (1) [In this subsection, “set of health care practitioners” means:
(i) a group practice;
(ii) a clinically integrated organization established in accordance
with Subtitle 19 of this title; or
(iii) an accountable care organization established in accordance with
42 U.S.C. § 1395jjj and any applicable federal regulations. LAWRENCE J. HOGAN, JR., Governor Ch. 297
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(2)] This section does not prohibit a carrier from:
(I) providing bonuses or other incentive–based compensation to a
health care practitioner or a set of health care practitioners [if the bonus or other
incentive–based compensation:]; OR
(II) ENTERING INTO A TWO –SIDED INCENTIVE ARRA NGEMENT
WITH AN ELIGIBLE PRO VIDER.
(2) A BONUS OR OTHER INCEN TIVE–BASED COMPENSATION
PROGRAM OR TWO –SIDED INCENTIVE ARRA NGEMENT AUTHORIZED U NDER THIS
SECTION:
(i) [does] MAY not create a disincentive to the provision of medically
appropriate or medically necessary health care services; and
(ii) if the carrier is a health maintenance organization, [complies]
SHALL COMPLY with the provisions of § 19–705.1 of the Health – General Article.
(3) A bonus or other incentive–based compensation OR TWO–SIDED
INCENTIVE ARRANGEMEN T AUTHORIZED under this [subsection] SECTION:
(i) if applicable, shall promote HEALTH EQUITY , IMPROVEMENT
OF HEALTH CARE OUTCO MES, AND the provision of preventive health care services; or
(ii) may reward a health care practitioner [or], a set of health care
practitioners, OR AN ELIGIBLE PROVI DER, based on satisfaction of performance
measures, if the following is agreed on in writing by the carrier and the health care
practitioner [or], set of health care practitioners, OR ELIGIBLE PROVIDER :
1. the performance measures, INCLUDING THE SOURCE OF
THE MEASURES ;
2. the method AND THE TIME PERIOD for calculating
whether the performance measures have been satisfied; [and]
3. the method by which the health care practitioner [or], set
of health care practitioners, OR ELIGIBLE PROVIDER may request reconsideration of the
calculations by the carrier; AND
4. IF APPLICABLE , THE RISK–ADJUSTMENT METHOD
USED.
Ch. 297 2022 LAWS OF MARYLAND
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(4) Acceptance of a bonus or other incentive–based compensation OR
TWO–SIDED INCENTIVE ARRA NGEMENT under this subsection shall be voluntary.
(5) A CARRIER MAY NOT REDU CE THE FEE SCHEDULE OF A HEALTH
CARE PRACTITIONER , OR A SET OF HEALTH CARE P RACTITIONERS , OR AN ELIGIBLE
PROVIDER SOLELY BECAUSE THE HEALTH C ARE PRACTITIONER , OR SET OF HEALTH
CARE PRACTITIONERS , OR ELIGIBLE PROVIDER DOES NOT PARTICIPATE IN THE
CARRIER’S BONUS OR OTHER INC ENTIVE–BASED COMPENSATION O R TWO–SIDED
INCENTIVE ARRANGEMEN T PROGRAM.
(6) PARTICIPATION IN A TW O–SIDED INCENTIVE ARRA NGEMENT MAY
NOT BE THE SOLE OPPO RTUNITY FOR A HEALTH CARE PRACTITIONER OR A SET OF
HEALTH CARE PRACTITI ONERS TO BE ELIGIBLE TO RECEIVE INCREASES IN
REIMBURSEMENT .
[(5)] (6) (7) A carrier may not require [a health care practitioner or a set of
health care practitioners to participate in the carrier’s bonus or incentive–based
compensation program] as a condition of participation in the carrier’s provider network:
(I) A HEALTH CARE PRACTI TIONER OR SET OF HEA LTH CARE
PRACTITIONERS TO PAR TICIPATE IN THE CARR IER’S BONUS OR OTHER
INCENTIVE–BASED COMPENSATION P ROGRAM; OR
(II) AN ELIGIBLE PROVIDER TO PARTICIPATE IN TH E CARRIER’S
TWO–SIDED INCENTIVE ARRA NGEMENT PROGRAM .
[(6)] (7) (8) A health care practitioner, a set of health care practitioners, AN
ELIGIBLE PROVIDER , a health care practitioner’s designee, [or] a designee of a set of
health care practitioners, OR A DESIGNEE OF AN ELIGIBLE PROVIDER may file a
complaint with the Administration regarding a violation of this subsection.
(d) (1) A carrier shall provide a health care practitioner, A SET OF HEALTH
CARE PRACTITIONERS , OR AN ELIGIBLE PROVI DER with a copy of:
(i) a schedule of ALL applicable fees [for up to] OR the [fifty] 50
most common services billed by a health care practitioner in that specialty, WHICHEVER
IS LESS;
(ii) a description of the coding guidelines used by the carrier that are
applicable to the services billed by a health care practitioner in that specialty; [and]
(iii) the information about the practitioner and the methodology that
the carrier uses to determine whether to:
LAWRENCE J. HOGAN, JR., Governor Ch. 297
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1. increase or reduce the practitioner’s level of
reimbursement; [and]
2. provide a bonus or other incentive–based compensation to
the practitioner; AND
3. RECOUP COMPENSATION FROM AN ELIGIBLE
PROVIDER UNDER A TWO –SIDED INCENTIVE ARRA NGEMENT; AND
(IV) A SUMMARY OF THE TER MS OF A TWO –SIDED INCENTIVE
ARRANGEMENT PROGRAM .
(2) Except as provided in paragraph (4) of this subsection, a carrier shall
provide the information required under paragraph (1) of this subsection in the manner
indicated in each of the following instances:
(i) in writing [at the time of] BEFORE A contract execution;
(ii) in writing or electronically 30 days [prior to] BEFORE a change;
and
(iii) in writing or electronically [upon] ON request of the health care
practitioner, SET OF HEALTH CARE P RACTITIONERS , OR ELIGIBLE PROVIDER .
(3) Except as provided in paragraph (4) of this subsection, a carrier shall
make the pharmaceutical formulary that the carrier uses available to a health care
practitioner, A SET OF HEALTH CARE PRACTITIONERS , OR AN ELIGIBLE PROVI DER
electronically.
(4) On written request of a health care practitioner, A SET OF HEALTH
CARE PRACTITIONERS , OR AN ELIGIBLE PROVI DER, a carrier shall provide the
information required under paragraphs (1) and (3) of this subsection in writing.
(5) The Administration may adopt regulations to carry out the provisions
of this subsection.
(e) (1) A carrier that compensates health care practitioners OR A SET OF
HEALTH CARE PRACTITI ONERS wholly or partly on a capitated basis IN ACCORDANCE
WITH § 15–2102 OF THIS ARTICLE may not retain any capitated fee attributable to an
enrollee or covered person during an enrollee’s or covered person’s contract year.
(2) A carrier is in compliance with paragraph (1) of this subsection if,
within 45 days after an enrollee or covered person chooses or obtains health care from a
health care practitioner OR A SET OF HEALTH C ARE PRACTITIONERS , the carrier pays
to the health care practitioner OR SET OF HEALTH CAR E PRACTITIONERS all accrued but Ch. 297 2022 LAWS OF MARYLAND
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unpaid capitated fees attributable to that enrollee or person that the health care
practitioner OR SET OF HEALTH CAR E PRACTITIONERS would have received had the
enrollee or person chosen the health care practitioner OR SET OF HEALTH CAR E
PRACTITIONERS at the beginning of the enrollee’s or covered person’s contract year.
(3) ACCEPTANCE OF A CAPITATED PAYME NT SHALL BE VOLUNTAR Y.
(F) (1) UNDER A TWO–SIDED INCENTIVE ARRA NGEMENT THAT COMPLIE S
WITH THE REQUIREMENT S OF THIS SECTION, A CARRIER MAY RECOUP FUNDS PAID
TO AN ELIGIBLE PROVI DER BASED ON THE TER MS OF A WRITTEN CONT RACT
BETWEEN THE C ARRIER AND THE ELIGI BLE PROVIDER THAT AT A MINIMUM:
(I) ESTABLISH A TARGET B UDGET FOR:
1. THE TOTAL COST OF CA RE OF A POPULATION O F
PATIENTS ADJUSTED FO R RISK AND POPULATIO N SIZE; OR
2. THE COST OF AN EPISO DE OF CARE;
(II) LIMIT RECOUPME NT TO NOT MORE THAN 50% OF THE
EXCESS ABOVE THE MUT UALLY AGREED ON TARG ET ESTABLISHED IN AC CORDANCE
WITH ITEM (I) OF THIS PARAGRAPH ;
(III) SPECIFY A MUTUALLY A GREED ON MAXIMUM LIA BILITY FOR
TOTAL RECOUPMENT THA T MAY NOT EXCEED 10% OF THE ANNUAL PAYMEN TS FROM
THE CARRIER TO THE E LIGIBLE PROVIDER ;
(IV) PROVIDE AN OPPORTUNI TY FOR GAINS BY AN E LIGIBLE
PROVIDER THAT IS GRE ATER THAN THE OPPORT UNITY FOR RECOUPMENT BY THE
CARRIER;
(V) FOLLOWING GOOD FAITH NEGOTIATIONS , PROVIDE AN
OPPORTUNITY FOR AN A UDIT BY AN INDEPENDEN T THIRD PARTY AND AN
INDEPENDENT THIRD –PARTY DISPUTE RESOLU TION PROCESS;
(VI) REQUIRE THE CARRIER AND THE ELIGIBLE PRO VIDER TO
NEGOTIATE IN GOOD FA ITH ADJUSTMENTS TO T HE TARGET BUDGET WHE N:
1. CERTAIN CIRCUMSTANCE S BEYOND THE CONTROL OF
THE CARRIER OR THE E LIGIBLE PROVIDER ARI SE, INCLUDING CHANGES IN
HOSPITAL RATES ; AND
LAWRENCE J. HOGAN, JR., Governor Ch. 297
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2. MATERIAL CHANGES OCC UR IN HEALTH CARE
ECONOMICS, HEALTH CARE DELIVERY , OR REGULATIONS THAT IMPACT THE
ARRANGEMENT ; AND
(VII) REQUIRE THE CARRIER TO PAY ANY INCENTIVE TO OR
REQUEST ANY RECOUPME NT FROM THE ELIGIBLE PROVIDER WITHIN 6 MONTHS
AFTER THE END OF THE CONTRACT YEAR , UNLESS THE CARRIER O R ELIGIBLE
PROVIDER INITIATES A DISPUTE RELATING TO THE RECOUPMENT OR IN CENTIVE
AMOUNT.
(2) UNLESS MUTUALL Y AGREED TO BY AN EL IGIBLE PROVIDER AND A
CARRIER, AN ARRANGEMENT ENTER ED INTO UNDER THIS S UBSECTION MAY NOT
PROVIDE AN OPPORTUNI TY FOR RECOUPMENT BY THE CARRIER BASED ON THE
ELIGIBLE PROVIDER ’S PERFORMANCE DURING THE FIRST 12 MONTHS OF THE
ARRANGEMENT .
(3) A CARRIER THAT ENTERS INTO A TWO –SIDED INCENTIVE
ARRANGEMENT WITH AN ELIGIBLE PROVIDER IN WHICH THE AMOUNT OF ANY
PAYMENT IS DETERMINE D, IN WHOLE OR IN PART , ON THE TOTAL COST OF CARE OF
A POPULATION OF PATI ENTS OR AN EPISODE O F CARE, SHALL, AT LEAST
QUARTERLY , DISCLOSE TO THE ELIG IBLE PROVIDER THE FO LLOWING INFORMATION
IN A MANNER THAT MEE TS FEDERAL AND STATE DATA USE AND PR IVACY
STANDARDS:
(I) ANY AMOUNT PAID TO A NOTHER HEALTH CARE P ROVIDER
THAT IS INCLUDED IN THE TOTAL COST OF CA RE OF A PATIENT IN THE POPULATION
OR EPISODE OF CARE ; AND
(II) ANY COPAYMENT , COINSURANCE , OR DEDUCTIBLE THAT I S
INCLUDED IN THE TOTA L COST OF CARE OF A PATIENT IN THE POPUL ATION OR
EPISODE OF CARE .
(4) UNLESS MUTUALLY AGREE D TO BY THE CARRIER AND ELIGIBLE
PROVIDER, A TWO–SIDED INCENTIVE ARRA NGEMENT MAY NOT BE A MENDED
DURING THE TERM OF T HE CONTRACT .
(5) THE OPPORTUNITY FOR I NDEPENDENT THIRD –PARTY DISPUTE
RESOLUTION PROVIDED FOR IN PARAGRAPH (1)(V) OF THIS SUBSECTION MAY NOT
BE REQUIRED TO BE EX HAUSTED BEFORE A MEM BER OR MEMBER ’S
REPRESENTATIVE IS AL LOWED TO FILE AN APP EAL OF A COVERAGE DE CISION
UNDER § 15–10D–02 OF THIS TITLE.
(6) NOTHING IN THIS SUBSE CTION MAY BE CONSTRU ED TO:
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(I) ALTER ANY RE QUIREMENT FOR A CARR IER TO PAY A
HOSPITAL OR RELATED INSTITUTION THE RATE APPROVED BY THE HEALTH
SERVICES COST REVIEW COMMISSION FOR HOSPIT AL SERVICES; OR
(II) SUPERSEDE THE HEALTH SERVICES COST REVIEW
COMMISSION’S JURISDICTION OR AU THORITY OVER RATE REVIEW AND APPROVAL
FOR HOSPITAL SERVICE S.
15–1008.
(b) This section does not apply to an adjustment to reimbursement:
(1) made as part of an annual contracted reconciliation of a risk sharing
arrangement under an administrative service provider contract; OR
(2) MADE AS PART OF A TW O–SIDED INCENTIVE ARRA NGEMENT THAT
COMPLIES WITH § 15–113 OF THIS TITLE.
(c) (1) If a carrier retroactively denies reimbursement to a health care
provider, the carrier:
(i) may only retroactively deny reimbursement for services subject
to coordination of benefits with another carrier, the Maryland Medical Assistance Program,
or the Medicare Program during the 18–month period after the date that the carrier paid
the health care provider; and
(ii) except as provided in item (i) of this paragraph, may only
retroactively deny reimbursement during the 6–month period after the date that the carrier
paid the health care provider.
(2) (i) A carrier that retroactively denies reimbursement to a health
care provider under paragraph (1) of this subsection shall provide the health care provider
with a written statement specifying the basis for the retroactive denial.
(ii) If the retroactive denial of reimbursement results from
coordination of benefits, the written statement shall provide the name and address of the
entity acknowledging responsibility for payment of the denied claim.
SUBTITLE 21. CAPITATED PAYMENTS.
15–2101.
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS
INDICATED.
LAWRENCE J. HOGAN, JR., Governor Ch. 297
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(B) “ADMINISTRATOR ” MEANS A CARRIER ADMI NISTERING A SELF–FUNDED
GROUP HEALTH PLAN .
(C) “CARRIER” HAS THE MEANING STAT ED IN § 15–113 OF THIS TITLE.
(D) “HEALTH BENEFIT PLAN ” HAS THE MEANING STAT ED IN § 2–112.2 OF
THIS ARTICLE.
(D) (E) “HEALTH CARE PRACTITIO NER” HAS THE MEANING STAT ED IN §
15–113 OF THIS TITLE.
(E) (F) “MEMBER” HAS THE MEANING STAT ED IN § 15–10A–01 OF THIS
TITLE.
(F) (G) “NETWORK” HAS THE MEANING STAT ED IN § 15–112 OF THIS
TITLE.
(G) (H) “SET OF HEALTH CARE PR ACTITIONERS” HAS THE MEANING
STATED IN § 15–113 OF THIS TITLE.
(H) (I) “PARTICIPANT” MEANS AN EMPLOYEE OR AN EMPLOYEE ’S
DEPENDENT WHO PARTIC IPATES IN A SELF–FUNDED GROUP HEALTH INSURANCE
PLAN.
15–2102.
(A) THIS SECTION APPLIES TO ARRANGEMENTS UNDE R AN INSURED A
HEALTH BENEFIT PLAN OFFERED BY A CARRIER OR A SELF–FUNDED GROUP HEALTH
INSURANCE PLAN IN WH ICH A CAPITATED PAYM ENT IS:
(1) CALCULATED AS A FIXE D AMOUNT PER MEMBER OR PARTICIPANT
ASSIGNED OR ATTRIBUT ED TO THE HEALTH CAR E PRACTITIONER OR SE T OF HEALTH
CARE PRACTITIONERS ;
(2) TO COVER THE PROVISI ON OF A SET OF SERVI CES DEFINED IN THE
HEALTH CARE PRACTITI ONER’S OR SET OF HEALTH C ARE PRACTITIONERS ’
CONTRACT AND RENDERE D BY THE HEALTH CARE PRACTITIONER OR SET OF
HEALTH CARE PRACTITI ONERS; AND
(3) PAID PERIODICALLY RE GARDLESS OF UTILIZAT ION OF THE
SERVICES BY THE MEMB ERS OR PARTICIPANTS .
(B) SUBJECT TO THE REQUIR EMENTS OF SUBSECTION (C) OF THIS SECTION,
A HEALTH CARE PRACTI TIONER OR SET OF HEA LTH CARE PRACTITIONE RS IS NOT Ch. 297 2022 LAWS OF MARYLAND
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ENGAGED IN INSURANCE BUSINESS AS DESCRIBED IN § 4–205 OF THIS ARTICLE
SOLELY BECAUSE THE H EALTH CARE PRACTITIO NER OR SET OF HEALTH CARE
PRACTITIONERS ENTERS INTO A CONTRACT WITH A CARRIER THAT INCLU DES
CAPITATED PAYMENTS F OR SERVICES PROVIDED BY THE HEALTH CARE
PRACTITIONER OR SET OF HEALTH CARE P RACTITIONERS .
(C) A HEALTH CARE PRACTITI ONER OR SET OF HEALT H CARE
PRACTITIONERS IS NOT ENGAGED IN INSURANCE BUSINESS AS DESCRIBE D IN §
4–205(C) OF THIS ARTICLE SOLE LY BECAUSE THE HEALT H CARE PRACTITIONER OR
SET OF HEALTH CARE P RACTITIONERS ENTERS INTO A CONTRACT WITH AN
ADMINISTRATOR THAT I NCLUDES CAPITATED PA YMENTS FOR SERVICES PROVIDED
BY THE HEALTH CARE P RACTITIONER OR SET O F HEALTH CARE PRACTI TIONERS TO
MEMBERS OF A SELF –FUNDED GROUP HEALTH PLAN IF:
(1) THE HEALTH CARE PRAC TITIONER OR SET OF HEAL TH CARE
PRACTITIONERS PARTIC IPATES IN THE ADMINI STRATOR’S NETWORK AND ACCEPT S
CAPITATED PAYMENTS ;
(2) THE SELF –FUNDED GROUP HEALTH PLAN RETAINS THE
OBLIGATION TO PROVID E ACCESS TO COVERED HEALTH CARE BENEFITS TO
PARTICIPANTS; AND
(3) THE CONTRACT DOES NO T INCLUDE OTHER REIM BURSEMENT
ARRANGEMENTS THAT AR E CONSIDERED ACTS OF AN INSURANCE BUSINES S UNDER
§ 4–205(C) OF THIS ARTICLE.
(D) NOTWITHSTANDING SUBSE CTIONS (B) AND (C) OF THIS SECTION ,
NOTHING IN THIS SECT ION MAY BE CONSTRUED TO:
(1) ALTER ANY REQUIREMEN T FOR A CARRIER OR S ELF–FUNDED
GROUP HEALTH PLAN TO PAY A HOSPITAL OR RE LATED INSTITUTION TH E RATE
APPROVED BY THE HEALTH SERVICES COST REVIEW COMMISSION FOR HOSPIT AL
SERVICES; OR
(2) SUPERSEDE THE HEALTH SERVICES COST REVIEW
COMMISSION’S JURISDICTION OR AU THORITY OVER RATE RE VIEW AND APPROVAL
FOR HOSPITAL SERVICE S.
SECTION 2. AND BE IT FURTHER ENACTED, That, on or before December 31,
2023, and annually thereafter until December 31, 2032, the Maryland Health Care
Commission shall aggregate the following information and report it to the Senate Finance
Committee and the House Health and Government Operations Committee, in accordance
with § 2–1257 of the State Government Article:
LAWRENCE J. HOGAN, JR., Governor Ch. 297
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(1) the number and type of value–based arrangements entered into in
accordance with the authority established under Section 1 of this Act;
(2) quality outcomes of the value–based arrangements;
(3) the number of complaints made regarding value–based arrangements;
and
(4) the cost–effectiveness of the value–based arrangements; and
(5) the impact of two–sided incentive arrangements on the fee schedules of
health care practitioners included in the target budget that are not eligible providers.
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 2022.
Approved by the Governor, May 12, 2022.