EXPLANATION: CAPITALS INDICATE MATTER ADDE D TO EXISTING LAW .
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0834*
SENATE BILL 834
J5 2lr2361
CF HB 1148
By: Senators Beidle and Kelley
Introduced and read first time: February 7, 2022
Assigned to: Finance
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: March 3, 2022
CHAPTER ______
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; prohibiting 14
participation in a two–sided incentive arrangement from being the sole opportunity 15
for increases in reimbursement; and generally relating to health insurance, 16
two–sided incentive arrangements, and capitated payments. 17
BY repealing and reenacting, with amendments, 18
Article – Health Occupations 19
Section 1–302(d)(12) 20
Annotated Code of Maryland 21
(2021 Replacement Volume) 22
BY repealing and reenacting, with amendments, 23 2 SENATE BILL 834
Article – Insurance 1
Section 4–205(a), 15–113, and 15–1008(b) 2
Annotated Code of Maryland 3
(2017 Replacement Volume and 2021 Supplement) 4
BY repealing and reenacting, without amendments, 5
Article – Insurance 6
Section 4–205(b) and (c) and 15–1008(c) 7
Annotated Code of Maryland 8
(2017 Replacement Volume and 2021 Supplement) 9
BY adding to 10
Article – Insurance 11
Section 15–2101 and 15–2102 to be under the new subtitle “Subtitle 21. Capitated 12
Payments” 13
Annotated Code of Maryland 14
(2017 Replacement Volume and 2021 Supplement) 15
Preamble 16
WHEREAS, Value–based care is a health care practitioner payment structure that 17
ties practitioner revenue to improved health outcomes and the value of services delivered 18
rather than the volume of services provided; and 19
WHEREAS, Value–based arrangements may help to reduce disparities, expand 20
access to care, and improve outcomes, quality, and affordability; and 21
WHEREAS, Value–based care models promote the Triple Aim framework used by 22
the Centers for Medicare and Medicaid Services to optimize health care systems through 23
better care and experience for individuals, better health for populations, and lower per 24
capita costs with demonstrated improvements in quality, cost–savings, and better 25
management of chronic illnesses; and 26
WHEREAS, Value–based care models continue to show promising results and 27
expand throughout the rest of the country and in Medicare and Medicaid, with broad 28
support from both public and private stakeholders; and 29
WHEREAS, Hospitals, health care practitioners, and payers should be allowed to 30
voluntarily participate in patient–focused, outcome–driven, value–based reimbursement 31
arrangements in Maryland’s commercial insurance markets that seek to align with 32
value–based programs under Maryland’s Total Cost of Care model and ensure that 33
practitioners have adequate contract protections and that consumers continue to have 34
access to high–quality care that promotes better health outcomes; and 35
WHEREAS, Maryland has unique statutory barriers precluding commercial payers 36
from entering into certain value–based care arrangements outside of Maryland’s Total Cost 37
of Care model compared to other states in the nation; and 38 SENATE BILL 834 3
WHEREAS, In Maryland, changes are needed to the health care practitioner bonus 1
and other compensation provisions applicable to the commercial market to allow 2
practitioners to enter into both two–sided incentive and capitation arrangements with 3
commercial plans as they do in other states and the Medicare and Medicaid segments; now, 4
therefore, 5
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 6
That the Laws of Maryland read as follows: 7
Article – Health Occupations 8
1–302. 9
(d) The provisions of this section do not apply to: 10
(12) Subject to subsection (f) of this section, a health care practitioner who 11
has a compensation arrangement with a health care entity, if the compensation 12
arrangement is funded by or paid under: 13
(i) A Medicare shared savings program accountable care 14
organization authorized under 42 U.S.C. § 1395jjj; 15
(ii) As authorized under 42 U.S.C. § 1315a: 16
1. An advance payment accountable care organization 17
model; 18
2. A pioneer accountable care organization model; or 19
3. A next generation accountable care organization model; 20
(iii) An alternative payment model approved by the federal Centers 21
for Medicare and Medicaid Services; [or] 22
(iv) Another model approved by the federal Centers for Medicare and 23
Medicaid Services that may be applied to health care services provided to both Medicare 24
beneficiaries and individuals who are not Medicare beneficiaries; OR 25
(V) A VALUE–BASED ARRANGEMENT TH AT MEETS THE 26
REQUIREMENTS OF 42 C.F.R. § 411.357(AA)(1) THROUGH (3). 27
Article – Insurance 28
4–205. 29
(a) This section does not apply to: 30 4 SENATE BILL 834
(1) the lawful transaction of surplus lines insurance; 1
(2) the lawful transaction of reinsurance by insurers; 2
(3) transactions in the State that involve, and are subsequent to the 3
issuance of, a policy that was lawfully solicited, written, and delivered outside of the State 4
covering only a subject of insurance not resident, located, or expressly to be performed in 5
the State at the time of issuance of the policy; 6
(4) transactions that involve insurance contracts that are independently 7
procured through negotiations occurring entirely outside of the State and that are reported 8
and on which the premium tax is paid in accordance with §§ 4–210 and 4–211 of this 9
subtitle; 10
(5) an attorney while acting in the ordinary relation of attorney and client 11
in the adjustment of claims or losses; [or] 12
(6) unless otherwise determined by the Commissioner, transactions in the 13
State that involve group or blanket insurance or group annuities if the master policy of the 14
group was lawfully issued and delivered in another state in which the person was 15
authorized to engage in insurance business; OR 16
(7) A HEALTH CARE PRACTI TIONER OR SET OF HEA LTH CARE 17
PRACTITIONERS , AS DEFINED IN § 15–113 OF THIS ARTICLE , THAT ACCEPTS 18
CAPITATED PAYMENTS I N ACCORDANCE WITH § 15–2102 OF THIS ARTICLE , BUT 19
PERFORMS NO OTHER AC TS CONSIDERED ACTS O F AN INSURANCE BUSIN ESS. 20
(b) An insurer or other person may not, directly or indirectly, do any of the acts 21
of an insurance business set forth in subsection (c) of this section, except as provided by 22
and in accordance with the specific authorization of statute. 23
(c) Any of the following acts in the State, effected by mail or otherwise, is 24
considered to be doing an insurance business in the State: 25
(1) making or proposing to make, as an insurer, an insurance contract; 26
(2) making or proposing to make, as guarantor or surety insurer, a contract 27
of guaranty or suretyship as a vocation and not merely incidental to another legitimate 28
business or activity of the guarantor or surety insurer; 29
(3) taking or receiving an application for insurance; 30
(4) receiving or collecting premiums, commissions, membership fees, 31
assessments, dues, or other consideration for insurance; 32
SENATE BILL 834 5
(5) issuing or delivering an insurance contract to a resident of the State or 1
a person authorized to do business in the State; 2
(6) except as provided in subsection (d) of this section, with respect to a 3
subject of insurance resident, located, or to be performed in the State, directly or indirectly 4
acting as an insurance producer for, or otherwise representing or helping on behalf of 5
another, an insurer or other person to: 6
(i) solicit, negotiate, procure, or effect insurance or the renewal of 7
insurance; 8
(ii) disseminate information about coverage or rates; 9
(iii) forward an application; 10
(iv) deliver a policy or insurance contract; 11
(v) inspect risks; 12
(vi) fix rates; 13
(vii) investigate or adjust claims or losses; 14
(viii) transact matters arising out of an insurance contract after the 15
insurance contract becomes effective; or 16
(ix) in any other manner represent or help an insurer or other person 17
to transact insurance business; 18
(7) doing any kind of insurance business specifically recognized as doing 19
an insurance business under statutes relating to insurance; 20
(8) doing or proposing to do any insurance business that is substantially 21
equivalent to any act listed in this subsection in a manner designed to evade the statutes 22
relating to insurance; or 23
(9) as an insurer transacting any other business in the State. 24
15–113. 25
(a) (1) In this section the following words have the meanings indicated. 26
(2) “Carrier” means: 27
(i) an insurer; 28
(ii) a nonprofit health service plan; 29 6 SENATE BILL 834
(iii) a health maintenance organization; 1
(iv) a dental plan organization; or 2
(v) any other person that provides health benefit plans subject to 3
regulation by the State. 4
(3) “ELIGIBLE PROVIDER ” MEANS: 5
(I) A LICENSED PHYSICIAN , AS DEFINED IN § 14–101 OF THE 6
HEALTH OCCUPATIONS ARTICLE, WHO VOLUNTARILY PARTIC IPATES IN A 7
TWO–SIDED INCENTIVE ARRA NGEMENT; OR 8
(II) A SET OF HEALTH CARE PRACTITIONERS THAT 9
VOLUNTARILY PARTICIP ATE IN A TWO–SIDED INCENTIVE ARRA NGEMENT. 10
[(3)] (4) “Health care practitioner” means an individual who is licensed, 11
certified, or otherwise authorized under the Health Occupations Article to provide health 12
care services. 13
(5) “SET OF HEALTH CARE PR ACTITIONERS” MEANS: 14
(I) A GROUP PRACTICE ; 15
(II) A CLINICALLY INTEGRA TED ORGANIZATION EST ABLISHED 16
IN ACCORDANCE WIT H SUBTITLE 19 OF THIS TITLE; 17
(III) AN ACCOUNTABLE CARE ORGANIZATION ESTABLI SHED IN 18
ACCORDANCE WITH 42 U.S.C. § 1395JJJ AND ANY APPLICAB LE FEDERAL 19
REGULATIONS ; OR 20
(IV) A CLINICALLY INTEGRA TED NETWORK THAT IS A PROVIDER 21
ENTITY THAT MEETS TH E CRITERIA ESTABLISHED IN GUIDA NCE ISSUED BY THE 22
FEDERAL TRADE COMMISSION, INCLUDING A NETWORK OF BEHAVIORAL HEALTH 23
CARE PROGRAMS LICENS ED UNDER § 7.5–401 OF THE HEALTH – GENERAL ARTICLE. 24
(6) “TWO–SIDED INCENTIVE ARRA NGEMENT” MEANS AN 25
ARRANGEMENT BETWEEN AN ELIGIBLE PROVIDER AN D A CARRIER IN WHICH THE 26
ELIGIBLE PROVIDER MA Y EARN AN INCENTIVE AND A CARRIER MAY RE COUP FUNDS 27
FROM THE ELIGIBLE PR OVIDER IN ACCORDANCE WITH THE TERMS OF A CONTRACT 28
ENTERED INTO WITH TH E ELIGIBLE PROVIDER THAT MEETS THE REQUI REMENTS OF 29
THIS SECTION. 30
SENATE BILL 834 7
(b) A carrier may not reimburse a health care practitioner in an amount less than 1
the sum or rate negotiated in the carrier’s provider contract with the health care 2
practitioner. 3
(c) (1) [In this subsection, “set of health care practitioners” means: 4
(i) a group practice; 5
(ii) a clinically integrated organization established in accordance 6
with Subtitle 19 of this title; or 7
(iii) an accountable care organization established in accordance with 8
42 U.S.C. § 1395jjj and any applicable federal regulations. 9
(2)] This section does not prohibit a carrier from: 10
(I) providing bonuses or other incentive–based compensation to a 11
health care practitioner or a set of health care practitioners [if the bonus or other 12
incentive–based compensation:]; OR 13
(II) ENTERING INTO A TWO –SIDED INCENTIVE ARRA NGEMENT 14
WITH AN ELIGIBLE PRO VIDER. 15
(2) A BONUS OR OTHER INCEN TIVE–BASED COMPENSATION 16
PROGRAM OR TWO –SIDED INCENTIVE ARRA NGEMENT AUTHORIZED U NDER THIS 17
SECTION: 18
(i) [does] MAY not create a disincentive to the provision of medically 19
appropriate or medically necessary health care services; and 20
(ii) if the carrier is a health maintenance organization, [complies] 21
SHALL COMPLY with the provisions of § 19–705.1 of the Health – General Article. 22
(3) A bonus or other incentive–based compensation OR TWO–SIDED 23
INCENTIVE ARRANGEMEN T AUTHORIZED under this [subsection] SECTION: 24
(i) if applicable, shall promote HEALTH EQUITY , IMPROVEMENT 25
OF HEALTH CARE OUTCO MES, AND the provision of preventive health care services; or 26
(ii) may reward a health care practitioner [or], a set of health care 27
practitioners, OR AN ELIGIBLE PROVI DER, based on satisfaction of performance 28
measures, if the following is agreed on in writing by the carrier and the health care 29
practitioner [or], set of health care practitioners, OR ELIGIBLE PROVIDER : 30
8 SENATE BILL 834
1. the performance measures, INCLUDING THE SOURCE OF 1
THE MEASURES ; 2
2. the method AND THE TIME PERIOD for calculating 3
whether the performance measures have been satisfied; [and] 4
3. the method by which the health care practitioner [or], set 5
of health care practitioners, OR ELIGIBLE PROVIDER may request reconsideration of the 6
calculations by the carrier; AND 7
4. IF APPLICABLE , THE RISK–ADJUSTMENT METHOD 8
USED. 9
(4) Acceptance of a bonus or other incentive–based compensation OR 10
TWO–SIDED INCENTIVE ARRA NGEMENT under this subsection shall be voluntary. 11
(5) A CARRIER MAY NOT REDU CE THE FEE SCHEDULE OF A HEALTH 12
CARE PRACTITIONER , OR A SET OF HEALTH CARE PRACTITIONERS , OR AN ELIGIBLE 13
PROVIDER SOLELY BECAUSE THE HEALTH C ARE PRACTITIONER , OR SET OF HEALTH 14
CARE PRACTITIONERS , OR ELIGIBLE PROVIDER DOES NOT PARTICIPATE IN THE 15
CARRIER’S BONUS OR OTHER INC ENTIVE–BASED COMPENSATION O R TWO–SIDED 16
INCENTIVE ARRANGEMEN T PROGRAM. 17
(6) PARTICIPATION IN A TW O–SIDED INCENTIVE ARRA NGEMENT MAY 18
NOT BE THE SOLE OPPO RTUNITY FOR A HEALTH CARE PRACTITIONER OR A SET OF 19
HEALTH CARE PRACTITI ONERS TO BE ELIGIBLE TO RECEIVE INCREASES IN 20
REIMBURSEMENT . 21
[(5)] (6) (7) A carrier may not require [a health care practitioner or a set of 22
health care practitioners to participate in the carrier’s bonus or incentive–based 23
compensation program] as a condition of participation in the carrier’s provider network: 24
(I) A HEALTH CARE PRACTI TIONER OR SET OF HEA LTH CARE 25
PRACTITIONERS TO PAR TICIPATE IN THE CARR IER’S BONUS OR OTHER 26
INCENTIVE–BASED COMPENSATION P ROGRAM; OR 27
(II) AN ELIGIBLE PROVIDER TO PARTICIPATE IN THE C ARRIER’S 28
TWO–SIDED INCENTIVE ARRA NGEMENT PROGRAM . 29
[(6)] (7) (8) A health care practitioner, a set of health care practitioners, AN 30
ELIGIBLE PROVIDER , a health care practitioner’s designee, [or] a designee of a set of 31
health care practitioners, OR A DESIGNEE OF AN ELIGIBLE PROVIDER may file a 32
complaint with the Administration regarding a violation of this subsection. 33
SENATE BILL 834 9
(d) (1) A carrier shall provide a health care practitioner, A SET OF HEALTH 1
CARE PRACTITIONERS , OR AN ELIGIBLE PROVI DER with a copy of: 2
(i) a schedule of ALL applicable fees [for up to] OR the [fifty] 50 3
most common services billed by a health care practitioner in that specialty, WHICHEVER 4
IS LESS; 5
(ii) a description of the coding guidelines used by the carrier that are 6
applicable to the services billed by a health care practitioner in that specialty; [and] 7
(iii) the information about the practitioner and the methodology that 8
the carrier uses to determine whether to: 9
1. increase or reduce the practitioner’s level of 10
reimbursement; [and] 11
2. provide a bonus or other incentive–based compensation to 12
the practitioner; AND 13
3. RECOUP COMPENSATION FROM AN ELIGIBLE 14
PROVIDER UNDER A TWO –SIDED INCENTIVE ARRA NGEMENT; AND 15
(IV) A SUMMARY OF THE TER MS OF A TWO –SIDED INCENTIVE 16
ARRANGEMENT PROGRAM . 17
(2) Except as provided in paragraph (4) of this subsection, a carrier shall 18
provide the information required under paragraph (1) of this subsection in the manner 19
indicated in each of the following instances: 20
(i) in writing [at the time of] BEFORE A contract execution; 21
(ii) in writing or electronically 30 days [prior to] BEFORE a change; 22
and 23
(iii) in writing or electronically [upon] ON request of the health care 24
practitioner, SET OF HEALTH CARE P RACTITIONERS , OR ELIGIBLE PROVIDER . 25
(3) Except as provided in paragraph (4) of this subsection, a carrier shall 26
make the pharmaceutical formulary that the carrier uses available to a health care 27
practitioner, A SET OF HEALTH CARE PRACTITIO NERS, OR AN ELIGIBLE PROVI DER 28
electronically. 29
(4) On written request of a health care practitioner, A SET OF HEALTH 30
CARE PRACTITIONERS , OR AN ELIGIBLE PROVI DER, a carrier shall provide the 31
information required under paragraphs (1) and (3) of this subsection in writing. 32 10 SENATE BILL 834
(5) The Administration may adopt regulations to carry out the provisions 1
of this subsection. 2
(e) (1) A carrier that compensates health care practitioners OR A SET OF 3
HEALTH CARE PRACTITI ONERS wholly or partly on a capitated basis IN ACCORDANCE 4
WITH § 15–2102 OF THIS ARTICLE may not retain any capitated fee attributable to an 5
enrollee or covered person during an enrollee’s or covered person’s contract year. 6
(2) A carrier is in compliance with paragraph (1) of this subsection if, 7
within 45 days after an enrollee or covered person chooses or obtains health care from a 8
health care practitioner OR A SET OF HEALTH C ARE PRACTITIONERS , the carrier pays 9
to the health care practitioner OR SET OF HEALTH CAR E PRACTITIONERS all accrued but 10
unpaid capitated fees attributable to that enrollee or person that the health care 11
practitioner OR SET OF HEALTH CAR E PRACTITIONERS would have received had the 12
enrollee or person chosen the health care practitioner OR SET OF HEALTH CAR E 13
PRACTITIONERS at the beginning of the enrollee’s or covered person’s contract year. 14
(3) ACCEPTANCE OF A CAPIT ATED PAYMENT SHALL B E VOLUNTARY . 15
(F) (1) UNDER A TWO–SIDED INCENTIVE ARRA NGEMENT THAT COMPLIE S 16
WITH THE REQUIREMENT S OF THIS SECTION, A CARRIER MAY RECOUP FUNDS PAID 17
TO AN ELIGIBLE PROVI DER BASED ON THE TER MS OF A WRITTEN CONT RACT 18
BETWEEN THE CARRIER AND THE ELIGIBLE PRO VIDER THAT AT A MINI MUM: 19
(I) ESTABLISH A TARGET B UDGET FOR: 20
1. THE TOTAL COST OF CA RE OF A POPULATION O F 21
PATIENTS ADJUSTED FO R RISK AND POPULATIO N SIZE; OR 22
2. THE COST OF AN EPISO DE OF CARE; 23
(II) LIMIT RECOUPMENT TO NOT MORE THAN 50% OF THE 24
EXCESS ABOVE THE MUT UALLY AGREED ON TARGET ESTABLISHED IN ACCOR DANCE 25
WITH ITEM (I) OF THIS PARAGRAPH ; 26
(III) SPECIFY A MUTUALLY A GREED ON MAXIMUM LIA BILITY FOR 27
TOTAL RECOUPMENT THA T MAY NOT EXCEED 10% OF THE ANNUAL PAYMEN TS FROM 28
THE CARRIER TO THE E LIGIBLE PROVIDER ; 29
(IV) PROVIDE AN OPPORTUNI TY FOR GAINS BY AN E LIGIBLE 30
PROVIDER THAT IS GRE ATER THAN THE OPPORT UNITY FOR RECOUPMENT BY THE 31
CARRIER; 32
SENATE BILL 834 11
(V) FOLLOWING GOOD FAITH NEGOTIATIONS , PROVIDE AN 1
OPPORTUNITY FOR AN A UDIT BY AN INDEPENDE NT THIRD PARTY AND A N 2
INDEPENDENT THIRD–PARTY DISPUTE RESOLU TION PROCESS; 3
(VI) REQUIRE THE CARRIER AND THE ELIGIBLE PRO VIDER TO 4
NEGOTIATE IN GOOD FA ITH ADJUSTMENTS TO T HE TARGET BUDGET WHE N: 5
1. CERTAIN CIRCUMSTANCE S BEYOND THE CONTROL OF 6
THE CARRIER OR THE E LIGIBLE PROVIDER ARI SE, INCLUDING CHANGES IN 7
HOSPITAL RATES ; AND 8
2. MATERIAL CHANGES OCC UR IN HEALTH CARE 9
ECONOMICS, HEALTH CARE DELIVERY , OR REGULATIONS THAT IMPACT THE 10
ARRANGEMENT ; AND 11
(VII) REQUIRE THE CARRIER TO PAY ANY INCENTIVE TO OR 12
REQUEST ANY RECOUPME NT FROM TH E ELIGIBLE PROVIDER WITHIN 6 MONTHS 13
AFTER THE END OF THE CONTRACT YEAR , UNLESS THE CARRIER O R ELIGIBLE 14
PROVIDER INITIATES A DISPUTE RELATING TO THE RECOUPMENT OR IN CENTIVE 15
AMOUNT. 16
(2) UNLESS MUTUALLY AGREE D TO BY AN ELIGIBLE PROVIDER AND A 17
CARRIER, AN ARRANGEMENT ENTERED INTO UNDER THIS SUBS ECTION MAY NOT 18
PROVIDE AN OPPORTUNI TY FOR RECOUPMENT BY THE CARRIER BASED ON THE 19
ELIGIBLE PROVIDER ’S PERFORMANCE DURING THE FIRST 12 MONTHS OF THE 20
ARRANGEMENT . 21
(3) A CARRIER THAT ENTERS INTO A TWO –SIDED INCENTIVE 22
ARRANGEMENT WITH AN ELIGIBLE PROVIDER IN WHICH THE AMOUNT OF ANY 23
PAYMENT IS DETERMINE D, IN WHOLE OR IN PART , ON THE TOTAL COST OF CARE OF 24
A POPULATION OF PATI ENTS OR AN EPISODE O F CARE, SHALL, AT LEAST 25
QUARTERLY , DISCLOSE TO THE ELIG IBLE PROVIDER THE FO LLOWING INFORMATION 26
IN A MANNER THAT MEE TS FEDERAL AND STATE DATA USE AND PR IVACY 27
STANDARDS: 28
(I) ANY AMOUNT PAID TO A NOTHER HEALTH CARE P ROVIDER 29
THAT IS INCLUDED IN THE TOTAL COST OF CA RE OF A PATIENT IN T HE POPULATION 30
OR EPISODE OF CARE ; AND 31
(II) ANY COPAYMENT , COINSURANCE , OR DEDUCTIBLE THAT I S 32
INCLUDED IN THE TOTA L COST OF CARE OF A PATIENT IN THE POPUL ATION OR 33
EPISODE OF CARE . 34
12 SENATE BILL 834
(4) UNLESS MUTUALLY AGREE D TO BY THE CARRIER AND ELIGIBLE 1
PROVIDER, A TWO–SIDED INCENTIVE ARRA NGEMENT MAY NOT BE A MENDED 2
DURING THE TERM OF T HE CONTRACT . 3
(5) THE OPPORTUNITY FOR I NDEPENDENT THIRD –PARTY DISPUTE 4
RESOLUTION PROVIDED FOR IN PARAGRAPH (1)(V) OF THIS SUBSECTION M AY NOT 5
BE REQUIRED TO BE EX HAUSTED BEFORE A MEM BER OR MEMBER ’S 6
REPRESENTATIVE IS AL LOWED TO FILE A N APPEAL OF A COVERA GE DECISION 7
UNDER § 15–10D–02 OF THIS TITLE. 8
(6) NOTHING IN THIS SUBSE CTION MAY BE CONSTRU ED TO: 9
(I) ALTER ANY REQUIREMEN T FOR A CARRIER TO P AY A 10
HOSPITAL OR RELATED INSTITUTION THE RATE APPROVED BY THE HEALTH 11
SERVICES COST REVIEW COMMISSION FOR HOSPIT AL SERVICES; OR 12
(II) SUPERSEDE THE HEALTH SERVICES COST REVIEW 13
COMMISSION’S JURISDICTION OR AU THORITY OVER RATE RE VIEW AND APPROVAL 14
FOR HOSPITAL SERVICE S. 15
15–1008. 16
(b) This section does not apply to an adjustment to reimbursement: 17
(1) made as part of an annual contracted reconciliation of a risk sharing 18
arrangement under an administrative service provider contract; OR 19
(2) MADE AS PART OF A TW O–SIDED INCENTIVE ARRA NGEMENT THAT 20
COMPLIES WITH § 15–113 OF THIS TITLE. 21
(c) (1) If a carrier retroactively denies reimbursement to a health care 22
provider, the carrier: 23
(i) may only retroactively deny reimbursement for services subject 24
to coordination of benefits with another carrier, the Maryland Medical Assistance Program, 25
or the Medicare Program during the 18–month period after the date that the carrier paid 26
the health care provider; and 27
(ii) except as provided in item (i) of this paragraph, may only 28
retroactively deny reimbursement during the 6–month period after the date that the carrier 29
paid the health care provider. 30
(2) (i) A carrier that retroactively denies reimbursement to a health 31
care provider under paragraph (1) of this subsection shall provide the health care provider 32
with a written statement specifying the basis for the retroactive denial. 33 SENATE BILL 834 13
(ii) If the retroactive denial of reimbursement results from 1
coordination of benefits, the written statement shall provide the name and address of the 2
entity acknowledging responsibility for payment of the denied claim. 3
SUBTITLE 21. CAPITATED PAYMENTS. 4
15–2101. 5
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 6
INDICATED. 7
(B) “ADMINISTRATOR ” MEANS A CARRIER ADMI NISTERING A SELF–FUNDED 8
GROUP HEALTH PLAN . 9
(C) “CARRIER” HAS THE MEANING STATED IN § 15–113 OF THIS TITLE. 10
(D) “HEALTH BENEFIT PLAN ” HAS THE MEANING STAT ED IN § 2–112.2 OF 11
THIS ARTICLE. 12
(D) (E) “HEALTH CARE PRACTITIO NER” HAS THE MEANING STAT ED IN § 13
15–113 OF THIS TITLE. 14
(E) (F) “MEMBER” HAS THE MEANING STAT ED IN § 15–10A–01 OF THIS 15
TITLE. 16
(F) (G) “NETWORK” HAS THE MEANING STAT ED IN § 15–112 OF THIS 17
TITLE. 18
(G) (H) “PARTICIPANT” MEANS AN EMPLOYEE OR AN EMPLOYEE ’S 19
DEPENDENT WHO PARTIC IPATES IN A SELF–FUNDED GROUP HEALTH INSURANCE 20
PLAN. 21
(H) (I) “SET OF HEALTH CARE PRACTITIONERS ” HAS THE MEANING 22
STATED IN § 15–113 OF THIS TITLE. 23
15–2102. 24
(A) THIS SECTION APPLIES TO ARRANGEMENTS UNDE R AN INSURED A 25
HEALTH BENEFIT PLAN OFFERED BY A CARRIER OR A SELF–FUNDED GROUP HEALTH 26
INSURANCE PLAN IN WH ICH A CAPITATED PAYM ENT IS: 27
(1) CALCULATED AS A FIXE D AMOUNT PER MEMBER OR PARTICIPANT 28
ASSIGNED OR ATTRIBUT ED TO THE HEALTH CAR E PRACTITIONER OR SE T OF HEALTH 29
CARE PRACTITIONERS ; 30 14 SENATE BILL 834
(2) TO COVER THE PROVISI ON OF A SET OF SERVI CES DEFINED IN THE 1
HEALTH CARE PRACTITI ONER’S OR SET OF HEALTH CARE PR ACTITIONERS’ 2
CONTRACT AND RENDERE D BY THE HEALTH CARE PRACTITIONER OR SET OF 3
HEALTH CARE PRACTITI ONERS; AND 4
(3) PAID PERIODICALLY RE GARDLESS OF UTILIZAT ION OF THE 5
SERVICES BY THE MEMB ERS OR PARTICIPANTS . 6
(B) SUBJECT TO THE REQUIR EMENTS OF SUBSECTION (C) OF THIS SECTION, 7
A HEALTH CARE PRACTI TIONER OR SET OF HEA LTH CARE PRACTITIONE RS IS NOT 8
ENGAGED IN INSURANCE BUSINESS AS DESCRIBE D IN § 4–205 OF THIS ARTICLE 9
SOLELY BECAUSE THE H EALTH CARE PRACTITIO NER OR SET OF HEALTH CARE 10
PRACTITION ERS ENTERS INTO A CO NTRACT WITH A CARRIE R THAT INCLUDES 11
CAPITATED PAYMENTS F OR SERVICES PROVIDED BY THE HEALTH CARE 12
PRACTITIONER OR SET OF HEALTH CARE PRACT ITIONERS. 13
(C) A HEALTH CARE PRACTITI ONER OR SET OF HEALT H CARE 14
PRACTITIONERS IS NOT ENGAGED IN INS URANCE BUSINESS AS D ESCRIBED IN § 15
4–205(C) OF THIS ARTICLE SOLE LY BECAUSE THE HEALT H CARE PRACTITIONER OR 16
SET OF HEALTH CARE P RACTITIONERS ENTERS INTO A CONTRACT WITH AN 17
ADMINISTRATOR THAT I NCLUDES CAPITATED PA YMENTS FOR SERVICES PROVIDED 18
BY THE HEALTH CA RE PRACTITIONER OR S ET OF HEALTH CARE PR ACTITIONERS TO 19
MEMBERS OF A SELF –FUNDED GROUP HEALTH PLAN IF: 20
(1) THE HEALTH CARE PRAC TITIONER OR SET OF H EALTH CARE 21
PRACTITIONERS PARTIC IPATES IN THE ADMINI STRATOR’S NETWORK AND ACCEPT S 22
CAPITATED PAYMENTS ; 23
(2) THE SELF –FUNDED GROUP HEALTH PLAN RETAINS THE 24
OBLIGATION TO PROVID E ACCESS TO COVERED HEALTH CARE BENEFITS TO 25
PARTICIPANTS; AND 26
(3) THE CONTRACT DOES NO T INCLUDE OTHER REIM BURSEMENT 27
ARRANGEMENTS THAT AR E CONSIDERED ACTS OF AN INSURANCE BUSINES S UNDER 28
§ 4–205(C) OF THIS ARTICLE. 29
(D) NOTWITHSTANDING SUBSE CTIONS (B) AND (C) OF THIS SECTION , 30
NOTHING IN THIS SECT ION MAY BE CONSTRUED TO: 31
(1) ALTER ANY REQUIREMEN T FOR A CARRIER OR S ELF–FUNDED 32
GROUP HEALTH PLAN TO PAY A HOSPITAL OR RE LATED INSTITUTION TH E RATE 33
APPROVED BY THE HEALTH SERVICES COST REVIEW COMMISSION FOR HOSPIT AL 34
SERVICES; OR 35 SENATE BILL 834 15
(2) SUPERSEDE THE HEALTH SERVICES COST REVIEW 1
COMMISSION’S JURISDICTION OR AU THORITY OVER RATE RE VIEW AND APPROVAL 2
FOR HOSPITAL SERVICE S. 3
SECTION 2. AND BE IT FURTHER ENACTED, That, on or before December 31, 4
2023, and annually thereafter until December 31, 2032, the Maryland Health Care 5
Commission shall aggregate the following information and report it to the Senate Finance 6
Committee and the House Health and Government Operations Committee, in accordance 7
with § 2–1257 of the State Government Article: 8
(1) the number and type of value–based arrangements entered into in 9
accordance with the authority established under Section 1 of this Act; 10
(2) quality outcomes of the value–based arrangements; 11
(3) the number of complaints made regarding value–based arrangements; 12
and 13
(4) the cost–effectiveness of the value–based arrangements; and 14
(5) the impact of two–sided incentive arrangements on the fee schedules of 15
health care practitioners included in the target budget that are not eligible providers. 16
SECTION 3. AND BE IT FURTHER ENACTED, That this Act sha ll take effect 17
October 1, 2022. 18
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.