EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0834*
SENATE BILL 834
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By: Senators Beidle and Kelley
Introduced and read first time: February 7, 2022
Assigned to: Finance
A BILL ENTITLED
AN ACT concerning 1
Health Insurance – Two–Sided Incentive Arrangements and Capitated 2
Payments – Authorization 3
FOR the purpose of providing that value–based arrangements established under certain 4
provisions of federal law are exempt from certain provisions of State law regulating 5
health care practitioner referrals; providing that a health care practitioner or set of 6
health care practitioners that accepts capitated payments in a certain manner but 7
does not perform certain other acts is not considered to be performing acts of an 8
insurance business; authorizing certain bonus or incentive–based compensation to 9
include a two–sided incentive arrangement through which a carrier may recoup 10
funds paid to an eligible provider in accordance with a written contract that includes 11
certain requirements; prohibiting a carrier from requiring participation in a carrier’s 12
bonus or incentive–based compensation or two–sided incentive arrangement 13
program or reducing a fee schedule based on nonparticipation; and generally relating 14
to health insurance, two–sided incentive arrangements, and capitated payments. 15
BY repealing and reenacting, with amendments, 16
Article – Health Occupations 17
Section 1–302(d)(12) 18
Annotated Code of Maryland 19
(2021 Replacement Volume) 20
BY repealing and reenacting, with amendments, 21
Article – Insurance 22
Section 4–205(a), 15–113, and 15–1008(b) 23
Annotated Code of Maryland 24
(2017 Replacement Volume and 2021 Supplement) 25
BY repealing and reenacting, without amendments, 26
Article – Insurance 27
Section 4–205(b) and (c) and 15–1008(c) 28 2 SENATE BILL 834
Annotated Code of Maryland 1
(2017 Replacement Volume and 2021 Supplement) 2
BY adding to 3
Article – Insurance 4
Section 15–2101 and 15–2102 to be under the new subtitle “Subtitle 21. Capitated 5
Payments” 6
Annotated Code of Maryland 7
(2017 Replacement Volume and 2021 Supplement) 8
Preamble 9
WHEREAS, Value–based care is a health care practitioner payment structure that 10
ties practitioner revenue to improved health outcomes and the value of services delivered 11
rather than the volume of services provided; and 12
WHEREAS, Value–based arrangements may help to reduce disparities, expand 13
access to care, and improve outcomes, quality, and affordability; and 14
WHEREAS, Value–based care models promote the Triple Aim framework used by 15
the Centers for Medicare and Medicaid Services to optimize health care systems through 16
better care and experience for individuals, better health for populations, and lower per 17
capita costs with demonstrated improvements in quality, cost–savings, and better 18
management of chronic illnesses; and 19
WHEREAS, Value–based care models continue to show promising results and 20
expand throughout the rest of the country and in Medicare and Medicaid, with broad 21
support from both public and private stakeholders; and 22
WHEREAS, Hospitals, health care practitioners, and payers should be allowed to 23
voluntarily participate in patient–focused, outcome–driven, value–based reimbursement 24
arrangements in Maryland’s commercial insurance markets that seek to align with 25
value–based programs under Maryland’s Total Cost of Care model and ensure that 26
practitioners have adequate contract protections and that consumers continue to have 27
access to high–quality care that promotes better health outcomes; and 28
WHEREAS, Maryland has unique statutory barriers precluding commercial payers 29
from entering into certain value–based care arrangements outside of Maryland’s Total Cost 30
of Care model compared to other states in the nation; and 31
WHEREAS, In Maryland, changes are needed to the health care practitioner bonus 32
and other compensation provisions applicable to the commercial market to allow 33
practitioners to enter into both two–sided incentive and capitation arrangements with 34
commercial plans as they do in other states and the Medicare and Medicaid segments; now, 35
therefore, 36
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 37 SENATE BILL 834 3
That the Laws of Maryland read as follows: 1
Article – Health Occupations 2
1–302. 3
(d) The provisions of this section do not apply to: 4
(12) Subject to subsection (f) of this section, a health care practitioner who 5
has a compensation arrangement with a health care entity, if the compensation 6
arrangement is funded by or paid under: 7
(i) A Medicare shared savings program accountable care 8
organization authorized under 42 U.S.C. § 1395jjj; 9
(ii) As authorized under 42 U.S.C. § 1315a: 10
1. An advance payment accountable care organization 11
model; 12
2. A pioneer accountable care organization model; or 13
3. A next generation accountable care organization model; 14
(iii) An alternative payment model approved by the federal Centers 15
for Medicare and Medicaid Services; [or] 16
(iv) Another model approved by the federal Centers for Medicare and 17
Medicaid Services that may be applied to health care services provided to both Medicare 18
beneficiaries and individuals who are not Medicare beneficiaries; OR 19
(V) A VALUE–BASED ARRANGEMENT TH AT MEETS THE 20
REQUIREMENTS OF 42 C.F.R. § 411.357(AA)(1) THROUGH (3). 21
Article – Insurance 22
4–205. 23
(a) This section does not apply to: 24
(1) the lawful transaction of surplus lines insurance; 25
(2) the lawful transaction of reinsurance by insurers; 26
(3) transactions in the State that involve, and are subsequent to the 27
issuance of, a policy that was lawfully solicited, written, and delivered outside of the State 28
covering only a subject of insurance not resident, located, or expressly to be performed in 29 4 SENATE BILL 834
the State at the time of issuance of the policy; 1
(4) transactions that involve insurance contracts that are independently 2
procured through negotiations occurring entirely outside of the State and that are reported 3
and on which the premium tax is paid in accordance with §§ 4–210 and 4–211 of this 4
subtitle; 5
(5) an attorney while acting in the ordinary relation of attorney and client 6
in the adjustment of claims or losses; [or] 7
(6) unless otherwise determined by the Commissioner, transactions in the 8
State that involve group or blanket insurance or group annuities if the master policy of the 9
group was lawfully issued and delivered in another state in which the person was 10
authorized to engage in insurance business; OR 11
(7) A HEALTH CARE PRACTI TIONER OR SET OF HEALTH CARE 12
PRACTITIONERS , AS DEFINED IN § 15–113 OF THIS ARTICLE , THAT ACCEPTS 13
CAPITATED PAYMENTS I N ACCORDANCE WITH § 15–2102 OF THIS ARTICLE , BUT 14
PERFORMS NO OTHER AC TS CONSIDERED ACTS O F AN INSURANCE BUSIN ESS. 15
(b) An insurer or other person may not, directly or indirectly, do any of the acts 16
of an insurance business set forth in subsection (c) of this section, except as provided by 17
and in accordance with the specific authorization of statute. 18
(c) Any of the following acts in the State, effected by mail or otherwise, is 19
considered to be doing an insurance business in the State: 20
(1) making or proposing to make, as an insurer, an insurance contract; 21
(2) making or proposing to make, as guarantor or surety insurer, a contract 22
of guaranty or suretyship as a vocation and not merely incidental to another legitimate 23
business or activity of the guarantor or surety insurer; 24
(3) taking or receiving an application for insurance; 25
(4) receiving or collecting premiums, commissions, membership fees, 26
assessments, dues, or other consideration for insurance; 27
(5) issuing or delivering an insurance contract to a resident of the State or 28
a person authorized to do business in the State; 29
(6) except as provided in subsection (d) of this section, with respect to a 30
subject of insurance resident, located, or to be performed in the State, directly or indirectly 31
acting as an insurance producer for, or otherwise representing or helping on behalf of 32
another, an insurer or other person to: 33
SENATE BILL 834 5
(i) solicit, negotiate, procure, or effect insurance or the renewal of 1
insurance; 2
(ii) disseminate information about coverage or rates; 3
(iii) forward an application; 4
(iv) deliver a policy or insurance contract; 5
(v) inspect risks; 6
(vi) fix rates; 7
(vii) investigate or adjust claims or losses; 8
(viii) transact matters arising out of an insurance contract after the 9
insurance contract becomes effective; or 10
(ix) in any other manner represent or help an insurer or other person 11
to transact insurance business; 12
(7) doing any kind of insurance business specifically recognized as doing 13
an insurance business under statutes relating to insurance; 14
(8) doing or proposing to do any insurance business that is substantially 15
equivalent to any act listed in this subsection in a manner designed to evade the statutes 16
relating to insurance; or 17
(9) as an insurer transacting any other business in the State. 18
15–113. 19
(a) (1) In this section the following words have the meanings indicated. 20
(2) “Carrier” means: 21
(i) an insurer; 22
(ii) a nonprofit health service plan; 23
(iii) a health maintenance organization; 24
(iv) a dental plan organization; or 25
(v) any other person that provides health benefit plans subject to 26
regulation by the State. 27
6 SENATE BILL 834
(3) “ELIGIBLE PROVIDER ” MEANS: 1
(I) A LICENSED PHYSICIAN , AS DEFINED IN § 14–101 OF THE 2
HEALTH OCCUPATIONS ARTICLE, WHO VOLUNTARILY PART ICIPATES IN A 3
TWO–SIDED INCENTIVE ARRA NGEMENT; OR 4
(II) A SET OF HEALTH CARE PRACTITIONERS THAT 5
VOLUNTARILY PARTICIP ATE IN A TWO–SIDED INCENTIVE ARRA NGEMENT. 6
[(3)] (4) “Health care practitioner” means an individual who is licensed, 7
certified, or otherwise authorized under the Health Occupations Article to provide health 8
care services. 9
(5) “SET OF HEALTH CARE PR ACTITIONERS” MEANS: 10
(I) A GROUP PRACTICE ; 11
(II) A CLINICALLY INTEGRA TED ORGANIZATION EST ABLISHED 12
IN ACCORDANCE WITH SUBTITLE 19 OF THIS TITLE; 13
(III) AN ACCOUNTABLE CARE ORGANIZATION ESTABLI SHED IN 14
ACCORDANCE WITH 42 U.S.C. § 1395JJJ AND ANY APPLICABLE FEDERAL 15
REGULATIONS ; OR 16
(IV) A CLINICALLY INTEGRA TED NETWORK THAT IS A PROVIDER 17
ENTITY THAT MEETS TH E CRITERIA ESTABLISH ED IN GUIDANCE ISSUE D BY THE 18
FEDERAL TRADE COMMISSION. 19
(6) “TWO–SIDED INCENTIVE ARRA NGEMENT” MEANS AN 20
ARRANGEMENT BETW EEN AN ELIGIBLE PROV IDER AND A CARRIER I N WHICH THE 21
ELIGIBLE PROVIDER MA Y EARN AN INCENTIVE AND A CARRIER MAY RE COUP FUNDS 22
FROM THE ELIGIBLE PR OVIDER IN ACCORDANCE WITH THE TERMS OF A CONTRACT 23
ENTERED INTO WITH TH E ELIGIBLE PROVIDER THAT MEETS THE REQUI REMENTS OF 24
THIS SECTION. 25
(b) A carrier may not reimburse a health care practitioner in an amount less than 26
the sum or rate negotiated in the carrier’s provider contract with the health care 27
practitioner. 28
(c) (1) [In this subsection, “set of health care practitioners” means: 29
(i) a group practice; 30
(ii) a clinically integrated organization established in accordance 31 SENATE BILL 834 7
with Subtitle 19 of this title; or 1
(iii) an accountable care organization established in accordance with 2
42 U.S.C. § 1395jjj and any applicable federal regulations. 3
(2)] This section does not prohibit a carrier from: 4
(I) providing bonuses or other incentive–based compensation to a 5
health care practitioner or a set of health care practitioners [if the bonus or other 6
incentive–based compensation:]; OR 7
(II) ENTERING INTO A TWO –SIDED INCENTIVE ARRA NGEMENT 8
WITH AN ELIGIBLE PRO VIDER. 9
(2) A BONUS OR OTHER INCEN TIVE–BASED COMPENSATION 10
PROGRAM OR TWO –SIDED INCENTIVE ARRA NGEMENT AUTHORIZED U NDER THIS 11
SECTION: 12
(i) [does] MAY not create a disincentive to the provision of medically 13
appropriate or medically necessary health care services; and 14
(ii) if the carrier is a health maintenance organization, [complies] 15
SHALL COMPLY with the provisions of § 19–705.1 of the Health – General Article. 16
(3) A bonus or other incentive–based compensation OR TWO–SIDED 17
INCENTIVE ARRANGEMEN T AUTHORIZED under this [subsection] SECTION: 18
(i) if applicable, shall promote HEALTH EQUITY , IMPROVEMENT 19
OF HEALTH CARE OUTCO MES, AND the provision of preventive health care services; or 20
(ii) may reward a health care practitioner [or], a set of health care 21
practitioners, OR AN ELIGIBLE PROVI DER, based on satisfaction of performance 22
measures, if the following is agreed on in writing by the carrier and the health care 23
practitioner [or], set of health care practitioners, OR ELIGIBLE PROVIDER : 24
1. the performance measures, INCLUDING THE SOURCE OF 25
THE MEASURES ; 26
2. the method AND THE TIME PERIOD for calculating 27
whether the performance measures have been satisfied; [and] 28
3. the method by which the health care practitioner [or], set 29
of health care practitioners, OR ELIGIBLE PROVIDER may request reconsideration of the 30
calculations by the carrier; AND 31 8 SENATE BILL 834
4. IF APPLICABLE , THE RISK–ADJUSTMENT METHOD 1
USED. 2
(4) Acceptance of a bonus or other incentive–based compensation OR 3
TWO–SIDED INCENTIVE ARRA NGEMENT under this subsection shall be voluntary. 4
(5) A CARRIER MAY NOT REDU CE THE FEE SCHEDULE OF A HEALTH 5
CARE PRACTITIONER , A SET OF HEALTH CARE PRA CTITIONERS, OR AN ELIGIBLE 6
PROVIDER SOLELY BECA USE THE HEALTH CARE PRACTITIONER , SET OF HEALTH 7
CARE PRACTITIONERS , OR ELIGIBLE PROVIDER DOES NOT PARTICIPATE IN THE 8
CARRIER’S BONUS OR OTHER INC ENTIVE–BASED COMPENSATION O R TWO–SIDED 9
INCENTIVE ARRANGEMENT PRO GRAM. 10
[(5)] (6) A carrier may not require [a health care practitioner or a set of 11
health care practitioners to participate in the carrier’s bonus or incentive–based 12
compensation program] as a condition of participation in the carrier’s provider network: 13
(I) A HEALTH CARE PRACTI TIONER OR SET OF HEA LTH CARE 14
PRACTITIONERS TO PAR TICIPATE IN THE CARR IER’S BONUS OR OTHER 15
INCENTIVE–BASED COMPENSATION P ROGRAM; OR 16
(II) AN ELIGIBLE PROVIDE R TO PARTICIPATE IN THE CARRIER’S 17
TWO–SIDED INCENTIVE ARRA NGEMENT PROGRAM . 18
[(6)] (7) A health care practitioner, a set of health care practitioners, AN 19
ELIGIBLE PROVIDER , a health care practitioner’s designee, [or] a designee of a set of 20
health care practitioners, OR A DESIGNEE OF AN ELIGIBLE PROVIDER may file a 21
complaint with the Administration regarding a violation of this subsection. 22
(d) (1) A carrier shall provide a health care practitioner, A SET OF HEALTH 23
CARE PRACTITIONERS , OR AN ELIGIBLE PROVI DER with a copy of: 24
(i) a schedule of ALL applicable fees [for up to] OR the [fifty] 50 25
most common services billed by a health care practitioner in that specialty, WHICHEVER 26
IS LESS; 27
(ii) a description of the coding guidelines used by the carrier that are 28
applicable to the services billed by a health care practitioner in that specialty; [and] 29
(iii) the information about the practitioner and the methodology that 30
the carrier uses to determine whether to: 31
1. increase or reduce the practitioner’s level of 32 SENATE BILL 834 9
reimbursement; [and] 1
2. provide a bonus or other incentive–based compensation to 2
the practitioner; AND 3
3. RECOUP COMPENSATION FROM AN ELIGIBLE 4
PROVIDER UNDER A TWO –SIDED INCENTIVE ARRANGEMENT ; AND 5
(IV) A SUMMARY OF THE TER MS OF A TWO –SIDED INCENTIVE 6
ARRANGEMENT PROGRAM . 7
(2) Except as provided in paragraph (4) of this subsection, a carrier shall 8
provide the information required under paragraph (1) of this subsection in the manner 9
indicated in each of the following instances: 10
(i) in writing [at the time of] BEFORE A contract execution; 11
(ii) in writing or electronically 30 days [prior to] BEFORE a change; 12
and 13
(iii) in writing or electronically [upon] ON request of the health care 14
practitioner, SET OF HEALTH CARE P RACTITIONERS , OR ELIGIBLE PROVIDER . 15
(3) Except as provided in paragraph (4) of this subsection, a carrier shall 16
make the pharmaceutical formulary that the carrier uses available to a health care 17
practitioner, A SET OF HEALTH CARE PRACTITIONERS , OR AN ELIGIBLE PROVI DER 18
electronically. 19
(4) On written request of a health care practitioner, A SET OF HEALTH 20
CARE PRACTITIONERS , OR AN ELIGIBLE PROVI DER, a carrier shall provide the 21
information required under paragraphs (1) and (3) of this subsection in writing. 22
(5) The Administration may adopt regulations to carry out the provisions 23
of this subsection. 24
(e) (1) A carrier that compensates health care practitioners OR A SET OF 25
HEALTH CARE PRACTITIONERS wholly or partly on a capitated basis IN ACCORDANCE 26
WITH § 15–2102 OF THIS ARTICLE may not retain any capitated fee attributable to an 27
enrollee or covered person during an enrollee’s or covered person’s contract year. 28
(2) A carrier is in compliance with paragraph (1) of this subsection if, 29
within 45 days after an enrollee or covered person chooses or obtains health care from a 30
health care practitioner OR A SET OF HEALTH C ARE PRACTITIONERS , the carrier pays 31
to the health care practitioner OR SET OF HEALTH CARE P RACTITIONERS all accrued but 32
unpaid capitated fees attributable to that enrollee or person that the health care 33 10 SENATE BILL 834
practitioner OR SET OF HEALTH CAR E PRACTITIONERS would have received had the 1
enrollee or person chosen the health care practitioner OR SET OF HEALTH CAR E 2
PRACTITIONERS at the beginning of the enrollee’s or covered person’s contract year. 3
(3) ACCEPTANCE OF A CAPIT ATED PAYMENT SHALL B E VOLUNTARY . 4
(F) (1) UNDER A TWO–SIDED INCENTIVE ARRA NGEMENT THAT COMPLIE S 5
WITH THE REQUIRE MENTS OF THIS SECTIO N, A CARRIER MAY RECOUP FUNDS PAI D 6
TO AN ELIGIBLE PROVI DER BASED ON THE TER MS OF A WRITTEN CONT RACT 7
BETWEEN THE CARRIER AND THE ELIGIBLE PRO VIDER THAT AT A MINI MUM: 8
(I) ESTABLISH A TARGET B UDGET FOR: 9
1. THE TOTAL COST OF CA RE OF A POPULATION OF 10
PATIENTS ADJUSTED FO R RISK AND POPULATIO N SIZE; OR 11
2. THE COST OF AN EPISO DE OF CARE; 12
(II) LIMIT RECOUPMENT TO NOT MORE THAN 50% OF THE 13
EXCESS ABOVE THE MUT UALLY AGREED ON TARG ET ESTABLISHED IN AC CORDANCE 14
WITH ITEM (I) OF THIS PARAGRAPH; 15
(III) SPECIFY A MUTUALLY A GREED ON MAXIMUM LIA BILITY FOR 16
TOTAL RECOUPMENT THA T MAY NOT EXCEED 10% OF THE ANNUAL PAYMEN TS FROM 17
THE CARRIER TO THE E LIGIBLE PROVIDER ; 18
(IV) PROVIDE AN OPPORTUNI TY FOR GAINS BY AN E LIGIBLE 19
PROVIDER THAT IS GRE ATER THAN THE OPPORT UNITY FOR RECOUPMENT BY THE 20
CARRIER; 21
(V) FOLLOWING GOOD FAITH NEGOTIATIONS , PROVIDE AN 22
OPPORTUNITY FOR AN A UDIT BY AN INDEPENDE NT THIRD PARTY AND A N 23
INDEPENDENT THIRD –PARTY DISPUTE RESOLU TION PROCESS; 24
(VI) REQUIRE THE CARRIER AND THE ELIGIBLE PROV IDER TO 25
NEGOTIATE IN GOOD FA ITH ADJUSTMENTS TO T HE TARGET BUDGET WHE N: 26
1. CERTAIN CIRCUMSTANCE S BEYOND THE CONTROL OF 27
THE CARRIER OR THE E LIGIBLE PROVIDER ARI SE, INCLUDING CHANGES IN 28
HOSPITAL RATES ; AND 29
2. MATERIAL CHANGES OCCUR IN HEALTH CARE 30
ECONOMICS, HEALTH CARE DELIVERY , OR REGULATIONS THAT IMPACT THE 31
ARRANGEMENT ; AND 32 SENATE BILL 834 11
(VII) REQUIRE THE CARRIER TO PAY ANY INCENTIVE TO OR 1
REQUEST ANY RECOUPME NT FROM THE ELIGIBLE PROVIDER WITHIN 6 MONTHS 2
AFTER THE END OF THE CONTRACT YEAR , UNLESS THE CARRIER O R ELIGIBLE 3
PROVIDER INITIATES A DISPUTE RELATING TO THE RECOUPMENT OR IN CENTIVE 4
AMOUNT. 5
(2) UNLESS MUTUALLY AGREE D TO BY AN ELIGIBLE PROVIDER AND A 6
CARRIER, AN ARRANGEMENT ENTER ED INTO UNDER THIS S UBSECTION MAY NOT 7
PROVIDE AN OPPORTUNI TY FOR RECOUPMENT BY THE CARRIER BASED ON THE 8
ELIGIBLE PROVIDER ’S PERFORMANCE DURING THE FIRST 12 MONTHS OF THE 9
ARRANGEMENT . 10
(3) A CARRIER THAT ENTERS INTO A TWO –SIDED INCENTIVE 11
ARRANGEMENT WITH AN ELIGIBLE PROVIDER IN WHICH THE AMOUNT OF ANY 12
PAYMENT IS DETERMINE D, IN WHOLE OR IN PART , ON THE TOTAL COST OF CARE OF 13
A POPULATION OF PATI ENTS OR AN EPISODE O F CARE, SHALL, AT LEAST 14
QUARTERLY , DISCLOSE TO THE ELIG IBLE PROVIDER THE FO LLOWING INFORMATION 15
IN A MANNER THAT MEE TS FEDERAL AND STATE DATA USE AND PR IVACY 16
STANDARDS: 17
(I) ANY AMOUNT PAID TO A NOTHER HEALTH CARE P ROVIDER 18
THAT IS INCLUDED IN THE TOTAL COS T OF CARE OF A PATIE NT IN THE POPULATION 19
OR EPISODE OF CARE ; AND 20
(II) ANY COPAYMENT , COINSURANCE , OR DEDUCTIBLE THAT I S 21
INCLUDED IN THE TOTA L COST OF CARE OF A PATIENT IN THE POPUL ATION OR 22
EPISODE OF CARE . 23
(4) UNLESS MUTUALLY AGREE D TO BY THE CARRIE R AND ELIGIBLE 24
PROVIDER, A TWO–SIDED INCENTIVE ARRA NGEMENT MAY NOT BE A MENDED 25
DURING THE TERM OF T HE CONTRACT . 26
(5) THE OPPORTUNITY FOR I NDEPENDENT THIRD –PARTY DISPUTE 27
RESOLUTION PROVIDED FOR IN PARAGRAPH (1)(V) OF THIS SUBSECTION MAY NOT 28
BE REQUIRED TO BE EXHAUSTED BEFORE A MEMBER OR MEMBER ’S 29
REPRESENTATIVE IS AL LOWED TO FILE AN APP EAL OF A COVERAGE DE CISION 30
UNDER § 15–10D–02 OF THIS TITLE. 31
(6) NOTHING IN THIS SUBSE CTION MAY BE CONSTRU ED TO: 32
(I) ALTER ANY REQUIREMEN T FOR A CARRIER TO P AY A 33
HOSPITAL OR RELATED INSTITUTION THE RATE APPROVED BY THE HEALTH 34 12 SENATE BILL 834
SERVICES COST REVIEW COMMISSION FOR HOSPIT AL SERVICES; OR 1
(II) SUPERSEDE THE HEALTH SERVICES COST REVIEW 2
COMMISSION’S JURISDICTION OR AU THORITY OVER RATE REVIEW A ND APPROVAL 3
FOR HOSPITAL SERVICE S. 4
15–1008. 5
(b) This section does not apply to an adjustment to reimbursement: 6
(1) made as part of an annual contracted reconciliation of a risk sharing 7
arrangement under an administrative service provider contract; OR 8
(2) MADE AS PART OF A TW O–SIDED INCENTIVE ARRA NGEMENT THAT 9
COMPLIES WITH § 15–113 OF THIS TITLE. 10
(c) (1) If a carrier retroactively denies reimbursement to a health care 11
provider, the carrier: 12
(i) may only retroactively deny reimbursement for services subject 13
to coordination of benefits with another carrier, the Maryland Medical Assistance Program, 14
or the Medicare Program during the 18–month period after the date that the carrier paid 15
the health care provider; and 16
(ii) except as provided in item (i) of this paragraph, may only 17
retroactively deny reimbursement during the 6–month period after the date that the carrier 18
paid the health care provider. 19
(2) (i) A carrier that retroactively denies reimbursement to a health 20
care provider under paragraph (1) of this subsection shall provide the health care provider 21
with a written statement specifying the basis for the retroactive denial. 22
(ii) If the retroactive denial of reimbursement results from 23
coordination of benefits, the written statement shall provide the name and address of the 24
entity acknowledging responsibility for payment of the denied claim. 25
SUBTITLE 21. CAPITATED PAYMENTS. 26
15–2101. 27
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 28
INDICATED. 29
(B) “ADMINISTRATOR ” MEANS A CARRIER ADMI NISTERING A SELF–FUNDED 30
GROUP HEALTH PLAN . 31 SENATE BILL 834 13
(C) “CARRIER” HAS THE MEANING STAT ED IN § 15–113 OF THIS TITLE. 1
(D) “HEALTH CARE PRACTITIO NER” HAS THE MEANING STAT ED IN § 15–113 2
OF THIS TITLE. 3
(E) “MEMBER” HAS THE MEANING STATED IN § 15–10A–01 OF THIS TITLE. 4
(F) “NETWORK” HAS THE MEANING STAT ED IN § 15–112 OF THIS TITLE. 5
(G) “PARTICIPANT” MEANS AN EMPLOYEE OR AN EMPLOYEE ’S DEPENDENT 6
WHO PARTICIPATES IN A SELF–FUNDED GROUP HEALTH INSURANCE PLAN . 7
(H) “SET OF HEALTH CARE PRACTITION ERS” HAS THE MEANING STAT ED IN 8
§ 15–113 OF THIS TITLE. 9
15–2102. 10
(A) THIS SECTION APPLIES TO ARRANGEMENTS UNDE R AN INSURED OR A 11
SELF–FUNDED GROUP HEALTH INSURANCE PLAN IN WH ICH A CAPITATED PAYM ENT 12
IS: 13
(1) CALCULATED AS A FIXE D AMOUNT PER MEMBER OR PAR TICIPANT 14
ASSIGNED OR ATTRIBUT ED TO THE HEALTH CAR E PRACTITIONER OR SE T OF HEALTH 15
CARE PRACTITIONERS ; 16
(2) TO COVER THE PROVISI ON OF A SET OF SERVI CES DEFINED IN THE 17
HEALTH CARE PRACTITI ONER’S OR SET OF HEALTH C ARE PRACTITIONERS ’ 18
CONTRACT AND RENDERED BY THE HEALTH CARE PRAC TITIONER OR SET OF 19
HEALTH CARE PRACTITI ONERS; AND 20
(3) PAID PERIODICALLY RE GARDLESS OF UTILIZAT ION OF THE 21
SERVICES BY THE MEMB ERS OR PARTICIPANTS . 22
(B) SUBJECT TO THE REQUIR EMENTS OF SUBSECTION (C) OF THIS SECTION, 23
A HEALTH CARE PRACTI TIONER OR SET OF HEA LTH CARE PRACTITIONE RS IS NOT 24
ENGAGED IN INSURANCE BUSINESS AS DESCRIBE D IN § 4–205 OF THIS ARTICLE 25
SOLELY BECAUSE THE H EALTH CARE PRACTITIO NER OR SET OF HEALTH CARE 26
PRACTITIONERS ENTERS INTO A CONTRACT WITH A CARRIER THAT INCLUDES 27
CAPITATED PAYMENTS F OR SERVICES PROVIDED BY THE HEALTH CARE 28
PRACTITIONER OR SET OF HEALTH CARE PRACT ITIONERS. 29
(C) A HEALTH CARE PRACTITI ONER OR SET OF HEALT H CARE 30 14 SENATE BILL 834
PRACTITIONERS IS NOT ENGAGED IN INSURANCE BUSINESS AS DESCRIBE D IN § 1
4–205(C) OF THIS ARTICLE SOLE LY BECAUSE THE HEALT H CARE PRACTITIONER OR 2
SET OF HEALTH CARE P RACTITIONERS ENTERS INTO A CONTRACT WITH AN 3
ADMINISTRATOR THAT I NCLUDES CAPITATED PA YMENTS FOR SERVICES PROVIDED 4
BY THE HEALTH CARE P RACTITIONER OR SET O F HEALTH CARE PRACTITIONERS TO 5
MEMBERS OF A SELF –FUNDED GROUP HEALTH PLAN IF: 6
(1) THE HEALTH CARE PRAC TITIONER OR SET OF H EALTH CARE 7
PRACTITIONERS PARTIC IPATES IN THE ADMINI STRATOR’S NETWORK AND ACCEPT S 8
CAPITATED PAYMENTS ; 9
(2) THE SELF –FUNDED GROUP HEALTH PLAN RET AINS THE 10
OBLIGATION TO PROVID E ACCESS TO COVERED HEALTH CARE BENEFITS TO 11
PARTICIPANTS; AND 12
(3) THE CONTRACT DOES NO T INCLUDE OTHER REIM BURSEMENT 13
ARRANGEMENTS THAT AR E CONSIDERED ACTS OF AN INSURANCE BUSINES S UNDER 14
§ 4–205(C) OF THIS ARTICLE. 15
(D) NOTWITHSTANDING SUBSE CTIONS (B) AND (C) OF THIS SECTION , 16
NOTHING IN THIS SECT ION MAY BE CONSTRUED TO: 17
(1) ALTER ANY REQUIREMEN T FOR A CARRIER OR S ELF–FUNDED 18
GROUP HEALTH PLAN TO PAY A HOSPITAL OR RE LATED INSTITUTION TH E RATE 19
APPROVED BY THE HEALTH SERVICES COST REVIEW COMMISSION FOR HOSPIT AL 20
SERVICES; OR 21
(2) SUPERSEDE THE HEALTH SERVICES COST REVIEW 22
COMMISSION’S JURISDICTION OR AU THORITY OVER RATE RE VIEW AND APPROVAL 23
FOR HOSPITAL SERVICE S. 24
SECTION 2. AND BE IT FURTHER ENACTED, That, on or before December 31, 25
2023, and annually thereafter until December 31, 2032, the Maryland Health Care 26
Commission shall aggregate the following information and report it to the Senate Finance 27
Committee and the House Health and Government Operations Committee, in accordance 28
with § 2–1257 of the State Government Article: 29
(1) the number and type of value–based arrangements entered into in 30
accordance with the authority established under Section 1 of this Act; 31
(2) quality outcomes of the value–based arrangements; 32
(3) the number of complaints made regarding value–based arrangements; 33
and 34 SENATE BILL 834 15
(4) the cost–effectiveness of the value–based arrangements. 1
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 2
October 1, 2022. 3