Mid-Atlantic Health Law TOPICS

Background hero atmospheric image for New Maryland Legislation - Summer 2009

New Maryland Legislation - Summer 2009

Once again, the Maryland General Assembly showed its willingness to pass legislation dealing with the relationships between payors, patients and providers of health care services. More specifically, the following is a summary of many of the most significant health care measures adopted during the 2009 Session.

1. Hospital Debt Collection. Effective June 1, 2009, all Maryland acute care hospitals must develop a financial assistance policy that provides free medically necessary care to patients with family incomes at or below 150% of the federal poverty level, as well as reduced-cost medically necessary care to those with incomes above 150%. Also, hospitals must develop a Health Services Cost Review Commission (HSCRC) approved financial assistance information sheet for patients that, among other things, explains the hospital's financial assistance policy, and provides information on the Medical Assistance Program. All hospital debt collection policies must also be reviewed by the HSCRC. These policies should: (a) prohibit the selling of a debt or the charging of interest on bills incurred by self-pay patients before a court judgment; (b) provide active hospital oversight of collection practices; (c) describe in detail the hospital's debt collection procedure and its consideration of the patient's income and other assets; and (d) describe the circumstances in which the hospital will seek a judgment against the patient. The HSCRC may fine hospitals that knowingly violate these provisions up to $50,000 per violation.
2. Nonparticipating HMO Providers. For the period January 1, 2010 through December 31, 2014, HMO payments to nonparticipating licensed providers for covered services provided to an HMO enrollee will change. For evaluation and management, the HMO must pay the greater of: 125% of the average rate the HMO paid as of January 1 of the previous calendar year for the same covered services by a similarly licensed provider in the same geographic area; or 140% of the Medicare rate for the same covered service to a similarly licensed provider in the same geographic area as of August 1, 2008, inflated by the change in the Medicare Economic Index from 2008 to the current year. For all other services, HMOs must pay 125% of the average paid to contracting providers. That average is determined by summing the contracted rate for all occurrences of the CPT code for that service and dividing by the total number of occurrences of the CPT code. The Maryland Health Care Commission (MHCC) and the Maryland Insurance Administration (MIA) are authorized to investigate any alleged violations.
3. PhysicianRatings. A physician rating system is any program that measures, rates or tiers the performance of physicians under contract with a carrier, to the extent that the program is available to enrollees or the public. Carriers must contract and pay for an MHCC-approved ratings examiner to approve the carrier's rating system. The carrier must disclose to physicians which portions of their score relate to cost efficiencies and which relate to quality performance. Measurement of quality performance must be based on nationally recognized evidence-based or consensus-based clinical recommendations or guidelines. The physician rating system must include an appeals process, and physicians must be given prior notice of system changes. The carrier's website must identify where enrollees can find the carrier's physician performance ratings. The foregoing is effective January 1, 2010.

4. SmallGroupHealthInsurance. The prohibition on preexisting condition limitations in the Comprehensive Standard Health Benefit Plan (CSHBP), a health benefit package for businesses with 2-50 employees, has been repealed. The preexisting exclusion for the CSHBP will now be the same as group insurance plans. The CSHBP uniform deductibles and cost sharing requirements have also been repealed, and the MHCC must now set these requirements. The MHCC also must include a software application on its website for small businesses to compare premiums of different small group health benefit plans, including costs of riders typically purchased by small businesses. These new CSHBP provisions apply to all policies, contracts and health benefit plans issued, delivered or renewed on or after October 1, 2009.

5. Approval of Corporate Names. Effective October 1, 2009, professional corporations will no longer be required to obtain the Board of Physicians' approval to use a corporate name that is other than the name of individual stockholders-if the majority of the stockholders are physicians licensed by the Board. In the past, the name of every physician professional corporation had to either include the name of at least one of the stockholder physicians or receive approval from Med Chi and the Board of Physicians.
6. Similar or Related Professions. Effective October 1, 2009, professional corporations may provide similar or related professional services, and they may be owned by people with similar or related professional licenses, without obtaining permission from a State licensing agency. Prior to this law, professional corporations could only be organized for the purpose of rendering services within two or more professions if the combination was approved by the licensing law applicable to each profession.

7. Electronic Health Records. By October 1, 2009, the MHCC and the HSCRC must designate a Health Information Exchange, a statewide infrastructure that will enable the electronic exchange of health information between providers and other health care organizations. The MHCC and HSCRC must also adopt regulations by September 1, 2011, requiring State regulated payors, except MCOs, to provide monetary incentives to providers to use electronic health records.

8. Prince George's County Hospital Authority. The Prince George's County Hospital Authority may extend the bidding to complete the sale of the Prince George's County Health Care System. Also, the MHCC is authorized to issue a CON exemption, and to waive State Health Plan regulations, to facilitate the relocation of beds or services of all or part of the System. The Authority must complete its transfer of the System to new ownership by May 22, 2010.

9. Physician Loan Assistance. Effective July 2, 2009, primary care physicians have been removed from an existing State loan assistance program, and a new separate Maryland Loan Assistance Repayment Program, with expanded eligibility and repayment requirements, has been established for them. Primary care is defined as family medicine, internal medicine, obstetrics, pediatrics, geriatrics, emergency medicine and psychiatry. The program will assist with the repayment of a loan by a primary care physician who practices in a geographic area of Maryland that is a federally designated shortage area. Importantly, loan assistance may also be available to a physician who commits to practicing primary care or another medical specialty for a certain period of time in a geographic area that the Department of Health and Mental Hygiene (DHMH) has identified as having a shortage in that specialty. Funding for the loan assistance programs will come from hospital rate increases, to the extent that they are approved by the HSCRC.

10. Nursing Facilities-Pay-for-Performance. A 2007 statute authorized DHMH to collect a percentage of nursing home revenues from nursing homes, which amount is to be matched by federal funds. This year's legislation provides that: by July 1, 2009, DHMH must evaluate nursing homes based on quality; by July 1, 2010, DHMH must distribute 50% of the funds based on each facility's evaluation score; and full implementation of the pay-for-performance program is to begin on July 1, 2011.


June 22, 2009




Rosen, Barry F.


Health Care