Mid-Atlantic Health Law TOPICS

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New Maryland Legislation - Summer 2014

A version of this article was published in The Daily Record on June 30, 2014.

This year was another relatively quiet General Assembly Session in regard to new health care legislation. Nevertheless, the following is a listing of the more significant new Maryland health insurance and health care laws that were enacted in 2014.

1. Prescription Drugs. Lawmakers made some significant changes to prescription drug coverage laws, specifically step therapy, specialty drugs, and maximum allowable cost provisions.

Step therapy, also known as first-fail, protocols require individuals to try a lower-cost drug (usually a generic) before progressing to another covered medication. As of July 1, step therapy protocols cannot require off-label use of a drug. In addition, such protocols are prohibited when the prescriber provides supporting medical information to override the protocol. Such overriding information must show that the drug was ordered within the last 180 days, and the drug was effective based on the professional judgment of the prescriber. Payors have until July 1, 2015, to implement fully a process for permitting prescribers to override step therapy protocols.

Health insurance carriers will also be prohibited from imposing a copayment or coinsurance requirement on a covered "specialty drug" that exceeds $150 for up to a 30-day supply. This limit will increase annually based on medical care inflation. "Specialty drugs," in part, are prescription drugs for complex, chronic or rare medical conditions that cost $600 or more for a 30-day supply. The limit will apply to all policies, contracts, and health benefit plans issued, delivered, or renewed in the State on or after January 1, 2016.

Starting January 1, 2015, pharmacy benefit managers will be required to include the sources they use to determine maximum allowable cost (MAC) pricing in each contract with a pharmacy, and that pricing information must be updated at least every seven days. The contract must also include a process to appeal, to investigate, and to resolve MAC pricing disputes.

2. Bonus Payments for Practitioners. Starting October 1, health insurance carriers will be able to offer bonuses, incentives and other forms of variable compensation to health care practitioners, including practitioners organized as group practices or as accountable care organizations or other clinically integrated organizations, without triggering the prohibition against paying practitioners other than at "the sum or rate negotiated in the carrier's provider contract". This exemption for incentives, though, does come with restrictions. Payments may only be made if the compensation does not create a disincentive to the provision of medically appropriate or necessary health care services. Additionally, acceptance of compensation must be voluntary, and carriers cannot require practitioners to participate in a bonus or incentive-based program as a condition of network participation.

3. Hospital Change of Control. Starting July 1, hospitals will be required to notify the Health Services Cost Review Commission (HSCRC) at least 30 days prior to executing an agreement that would result in more than half of all corporate voting rights or governance reserve powers being transferred to or assumed by another person or entity. Hospitals were already required to notify the HSCRC prior to selling, collateralizing or otherwise transferring 50% or more of the assets of the Hospital.

4. Open Heart Surgery. An acute general hospital must agree voluntarily to relinquish its authority to provide acute cardiac surgery services if the hospital fails to meet applicable standards established by the Maryland Health Care Commission, as a condition for the issuance of a certificate of conformance or certificate of ongoing performance. This requirement, which takes effect on June 1, is already in place with respect to percutaneous coronary intervention services.

5. New Licensees. There are two new licensed practices in Maryland: behavior analysts and naturopathic doctors. "Behavior analysis" is defined as "the design, implementation, and evaluation of systematic instructional and environmental modifications to produce socially significant improvements in human nature." Behavior analysis includes, for example, designing learning environments for autistic children. Starting January 1, 2015, individuals must be licensed by the State Board of Professional Counselors and Therapists to practice behavior analysis in Maryland. "Naturopathic medicine" essentially means the diagnosis and treatment of patients only through education and naturopathic therapies, such as herbal treatments or hydrotherapy. Naturopathic doctors must be licensed by the State Board of Physicians by March 1, 2016.

6. Dentists Dispensing Drugs. As of October 1, licensed dentists will be exempt from the Maryland Pharmacy Act's general dispensing permit requirements: (1) if they obtain a permit from the State Board of Dental Examiners to dispense prescription strength home fluoride products, remineralizing products, or antimicrobial rinses or (2) if they dispense a full course of antibiotics for a patient receiving pro bono care who is not charged for the antibiotics.

7. Ophthalmologist Dispensing Compounded Drugs. As of July 1, ophthalmologists may maintain an in-office supply of compounded drugs (certain antibiotics and glaucoma treatments) in advance of prescribing such drugs to particular patients. Prior to this statute, a compounding pharmacy needed a prescription before releasing a compounded drug to an ophthalmologist. The General Assembly crafted this bill to enable ophthalmologists to provide emergency treatment in-office, without waiting days for a pharmacy to deliver the needed drug.

8. New MHCC Workgroup. Beginning October 1, the Maryland Health Care Commission will be required to establish a health care provider-carrier workgroup. The workgroup will resolve provider-carrier disputes on issues over which no State agency has statutory or regulatory authority.

9. New Behavioral Health Administration. The General Assembly established the new Behavioral Health Administration, merging the DHMH?s current Alcohol and Drug Addiction Administration and Mental Hygiene Administration. Existing certification and approval provisions for alcohol and drug abuse treatment programs and mental health programs will be replaced with new licensing provisions for substance abuse disorder programs and mental health programs. The law goes into effect July 1.


July 01, 2014




Rosen, Barry F.


Health Care