Health Insurance - Utilization Review - Exemption for Participation in Value-Based Care Arrangements
Summary
HB659 would change Maryland insurance law to limit utilization review tools for certain value-based care arrangements. Specifically, it prohibits carriers from imposing prior authorization, step therapy, or quantity limits on health care services that are included in a qualifying two-sided incentive arrangement between a carrier and an eligible provider. The bill defines eligible providers broadly to include licensed physicians and certain organized provider groups, such as group practices, clinically integrated organizations, accountable care organizations, and clinically integrated networks.
The bill also sets detailed conditions for these two-sided incentive arrangements. It requires written contracts to establish target budgets, cap recoupment, provide for independent third-party audit and dispute resolution, require good-faith renegotiation when material changes occur, and limit the timing and size of recoupments. It further requires quarterly disclosure of certain cost information and generally bars amendments during the contract term unless mutually agreed. The bill applies to policies and contracts issued, delivered, or renewed on or after January 1, 2026.
Impact
HB659 would amend the Insurance Article by adding a new section governing two-sided incentive arrangements and by revising existing utilization review provisions. In practice, it would restrict insurers, nonprofit health service plans, and HMOs from using prior authorization, step therapy, or quantity limits for services covered under qualifying value-based contracts. It also preserves existing hospital rate-setting authority by stating that the bill does not alter Health Services Cost Review Commission-approved hospital rates or supersede the Commission’s jurisdiction.
Sentiment
The bill text and available context suggest a policy direction favoring value-based care and reduced administrative barriers for participating providers. Because there are no committee transcripts or recorded votes provided, there is no direct evidence of formal support or opposition in the available record. The structure of the bill indicates an effort to encourage participation in alternative payment models while balancing carrier protections through contract terms, recoupment limits, and dispute resolution requirements.
Contention
The main points of potential contention are the bill’s limits on insurer utilization management and its constraints on carrier recoupment rights. Carriers may view the prohibition on prior authorization, step therapy, and quantity limits as a reduction in tools used to manage cost and utilization, while providers are likely to support the relief from administrative review in value-based arrangements. Another likely area of debate is the bill’s detailed contract mandates, including recoupment caps, disclosure obligations, and restrictions on mid-contract amendments, which could be seen as either necessary safeguards or burdensome regulation depending on the stakeholder.