Mid-Atlantic Health Law TOPICS

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New Maryland Legislation: An Eclectic Session

Some Sessions of the Maryland General Assembly give birth to innovative health care reforms. Other Sessions fill gaps and refine health care concepts. While the 2010 Session has some examples of innovative reforms and gap fillers, it also has some eclectic new health care legislation, all as noted below.

1. Freestanding Medical Facility Rates. The Health Services Cost Review Commission (HSCRC) will now regulate emergency services provided at three specific freestanding facilities. The HSCRC will set rates that payors will have to pay at the Queen Anne's County Freestanding Pilot Project, effective October 1, 2010, as well as the Germantown Freestanding Pilot Project and the existing Bowie Health Center, effective July 1, 2011. No additional freestanding emergency facilities may be established until after July 1, 2015, and such new facilities will have to obtain a certificate of need from the Maryland Health Care Commission (HCC).

2. Assignment of Benefits/Non-Preferred Providers. Next year, preferred provider policies (PPO) must honor an assignment of health benefits by an insured to a non-preferred physician. A non-preferred on-call physician or a hospital-based physician (defined as a physician or group practice of physicians under contract with a hospital) who accepts an assignment of benefits will not be able to balance bill the patient. For on-call physicians, PPOs will have to pay the greater of: (a) 140% of the average rate the insurer paid for the 12-month period that ends on January 1 of the previous calendar year in the same geographic area for the same service to similarly licensed providers with whom the insured had a contract; or (b) the average rate the insurer paid for the 12-month period that ended January 1, 2010, in the same geographic area for the same service to similarly licensed providers not under written contract with the insurer, inflated by the change in the Medicare Economic Index from 2010 to the current year. For hospital-based physicians, a PPO will have to pay the greater of: (a) 140% of the average rate the insurer paid for the12-month period that ends on January 1 of the previous calendar year in the same geographic area for the same service to similarly licensed providers with whom the insured had a contract; or (b) the final amount allowed by the insurer for the same covered services for the 12-month period that ended on January 1, 2010, inflated by the Medicare Economic Index to the current year, to the hospital-based physician billing under the same federal tax ID number that the hospital-based physician used in 2009. These provisions apply to PPO contracts issued or renewed on or after July 1, 2011, but sunset on September 30, 2015.

3. Clinically Integrated Organizations. A clinically integrated organization (CIO) is defined as a joint venture between a hospital and physicians that (a) has received an advisory opinion from the Federal Trade Commission and has been established to improve the practice patterns of the participating health care providers and promote the efficient, medically appropriate delivery of covered services, or (b) is accountable for total spending and quality of medical services and meets the Department of Health and Human Services' criteria for an accountable care organization. The law, effective July 1, 2010, authorizes health insurance carriers to pay CIOs for coordination of care services, as well as bonuses or incentives to promote efficient, medically appropriate delivery of medical services. Carriers must share medical information about covered individuals with CIOs, provided that there is a written agreement stating how the information will be shared, and provided that there are procedures for disclosing to the insured how information will be shared. A carrier must file a copy of its CIO contract with Maryland's Insurance Commissioner, which contracts will remain confidential.

4. Patient Centered Medical Home. A patient centered medical home is a primary care practice organized to provide a first, coordinated, ongoing and comprehensive source of health care to patients. If approved by the HCC, patient centered medical home pilots will start July 1, 2010, and end December 31, 2015. Participating insurers, HMOs, MCOs and nonprofit health service providers are authorized to pay a patient centered medical home, including specified incentives, for coordinated covered medical services to covered individuals. A carrier, other than a group model HMO, that reports $90 million in written premiums for health benefit plans in the State must participate in the pilot program. Subject to State budget limitations, the Department of Health and Mental Hygiene (DHMH) may require certain MCOs and Maryland Medical Assistance Program enrollees to participate.

5. Primary Care Provider Bonus Payments. Effective October 1, 2010, health insurance carriers must pay a bonus to primary care providers for services provided in the office after 6 p.m. and before 8 a.m. or on weekends or national holidays. The bonus payment must be described in the carrier's contract with the primary care provider. A group model HMO is not required to make bonus payments to physicians who are employed by the physician group under the contract with the group model HMO.

6. Maryland False Health Claims Act. The law, effective October 1, 2010, (a) prohibits a person from making a false or fraudulent claim for payment or approval by the State or by DHMH under a State health reimbursement plan or program; (b) authorizes the State to file a civil action against a person who knowingly makes a false health claim; (c) establishes civil penalties for making a false health claim; (d) permits a private citizen to file a civil action on behalf of the State against a person who has made a false health claim; (e) requires the court to award a certain percentage of the proceeds of the action to the private citizen initiating the action; and (f) prohibits retaliatory actions by a person against an employee, contractor, or grantee for disclosing a false claim. The statute of limitations is 6 years from the date of the violation, or 3 years after the date when material facts were known, or reasonably should have been known, by the private party initiating the action on behalf of the State, but in no event more than 10 years after the date the violation was committed. Any civil penalties/damages awarded for false claim recoveries must be deposited into the State's general fund, instead of the special fund dedicated to Medical Assistance.

7. Health Occupation Boards. Effective July 1, 2010, the guidelines for all of the State's health occupation boards must be standardized, including the boards' disciplinary and sanctioning procedures. The boards must use a peer review system in standard of care cases, and the licensee under investigation must be able to review the final peer review report to provide a written response. The board must consider both the report and the licensee's response before taking action. With certain exceptions, a board may not bring charges against a licensee or certificate holder based solely on events more than 6 years after an incident occurred, or could have been discovered. Each Board must post its final, public order for a disciplinary sanction on its web site. DHMH is charged with monitoring the timeliness of the boards' complaint resolutions.

8. Health Insurance Benefits/Personal Injury Protection Coverage. Carriers and HMOs are prohibited from requiring that personal injury protection (PIP) benefits under a motor vehicle liability insurance policy be paid before benefits under the health insurance policy. This applies to all policies, contacts and health benefits plans issued, delivered or renewed in the State on or after October 1, 2010.

9. Hospital Financial Assistance & Debt Collection Policies. Starting October 1, 2010, all Maryland hospitals including chronic care hospitals with rates set by the HSCRC, must have financial assistance policies that provide reduced-costs for medically necessary care to patients with a family income below 500% of federal poverty guidelines who have a financial hardship. Financial hardship means medical debt incurred by a family over a 12-month period that exceeds 25% of family income. Hospitals may seek HSCRC approval of a different income threshold in specific circumstances. A hospital must follow specific rules if it finds a patient to be eligible for free care after collecting money for services, and a hospital that delegates debt collection to an outside collection agency must require that agency to abide by the hospital's own collection policy. Among other things, the law sets uniform standards for hospital debt policies, including a prohibition on forcing the sale or foreclosure of a patient's primary residence to collect an outstanding debt. A hospital's board must approve all changes to a hospital's financial assistance and debt collection policies, and also must review and approve those policies every two years.


June 15, 2010




Rosen, Barry F.


Government Relations
Health Care