Maryland's Attorney General has issued advice to the State Insurance Commissioner concerning "balance billing" of HMO enrollees. In other words, the advice speaks to the ability of health care providers to bill HMO patients for the difference, or balance, between the health care provider's charges and the amount the provider is owed by the HMO.
The advice covers health care providers located in and outside of Maryland, as well as providers under contract with the HMO and those that are not. A summary of the advice is set forth below.
A. Maryland Providers
State law provides that HMO enrollees may not be held liable to any health care provider for "covered services," outside of copayments or deductibles. This provision, since 1989, has applied to providers who contract with a patient's HMO, as well as providers with no such agreement. In this latter regard, Maryland law provides reimbursement guidelines for HMO payment to non-contract providers. The concept at work is that no provider may seek to collect from a patient any money owed the provider by an HMO.
The Attorney General pointed out that when a patient is covered by an HMO "point-of-service" option, which allows some plan coverage for out-of-network providers, some plan provisions may call for the patient to pay the difference between the HMO payment and the amount billed by the provider. In such cases, the provider may collect this amount from the patient.
B. Out-of-State Providers The Attorney General also addressed the applicability of Maryland law to out-of-state providers offering services to Maryland HMO members, and concluded that the above provisions of Maryland law generally apply to such services. This conclusion was based on an analysis that an out-of-state "provider" was nevertheless a "provider" under the terms of the Maryland law.
The Opinion drew the line, however, at out-of-state providers who did not maintain "minimum contacts" with Maryland sufficient to justify application of the Maryland law. Clearly, a contract with a Maryland HMO will establish the required contact, however, the Attorney General opined, absent an agreement, the facts of each individual case would need to be investigated to determine if such "minimum contacts" existed.
C. Unanswered Questions
The Attorney General's Opinion leaves three important issues without resolution:
1. Does an out-of-state provider without a Maryland HMO contract have the "minimum contacts" required to be bound by Maryland's balance billing requirements? Providers are left to seek individual legal advice for a determination on this issue.
2. How much will an HMO pay a non-contracting provider for services rendered to an HMO enrollee? Maryland law requires reimbursement at the rate billed, or at the "usual, customary and reasonable" rate, but Maryland's Insurance Commissioner has determined that the latter rate may be set by the payor. Therefore, such providers will not know what payment rate will be applicable when they provide services.
3. When is a service a "covered service," and thus subject to Maryland's balance billing requirements? Clearly, services identified as beyond the subscriber contract are not covered, however, a provider is held responsible to be aware of existing coverage. What about services that are "covered" depending upon the circumstances, for example, if required pre-authorization is not obtained? Again, providers may be held responsible to be aware of those circumstances that make a given service "covered" under an HMO subscriber agreement. Providers should also be aware that if their actions (or inaction) render a service "uncovered," they will not likely be allowed to bill the patient.