Health Maintenance Organizations - Payments to Nonparticipating Providers - Reimbursement Rate
Summary
SB 437 changes the reimbursement formula that health maintenance organizations (HMOs) must use when paying certain nonparticipating health care providers for covered services. The bill keeps the existing structure of Maryland’s HMO out-of-network payment law, but updates the benchmark dates used to calculate minimum payment rates. For evaluation and management services and other non-evaluation-and-management services, the bill replaces the prior reference to the average contracted rate as of January 1 of the previous calendar year with the average rate as of January 31, 2019, then inflates that amount by changes in the Medicare Economic Index to the current year. It also retains the alternative Medicare-based floor for evaluation and management services.
The bill continues to require HMOs to pay hospitals at HSCRC-approved rates and trauma physicians at the greater of specified Medicare-based or historical rates, while preserving existing rules on claims documentation, provider-number assignment, disclosure of reimbursement rates on request, and enforcement through the Maryland Insurance Administration or civil action. It also leaves in place the ability of HMOs to seek reimbursement from enrollees when a claim is the enrollee’s responsibility, and the existing penalty and regulatory framework for violations. The effective date is October 1, 2025.
Impact
SB 437 would amend § 19-710.1 of the Health-General Article, changing the statutory reimbursement floor for nonparticipating provider claims paid by HMOs. The practical effect is to tie minimum out-of-network payment rates to a 2019 baseline rather than a rolling prior-year baseline, with annual inflation adjustments using the Medicare Economic Index. This could affect payment amounts for physicians and other providers who are not under contract with an HMO, while preserving the existing statutory protections and enforcement mechanisms for hospitals, trauma physicians, and other covered providers.
Sentiment
No committee transcripts or recorded votes were provided, so there is no direct evidence of debate, support, or opposition in the supplied materials. Based on the bill text alone, the measure appears technical and rate-setting in nature, aimed at updating an existing reimbursement methodology rather than restructuring the HMO payment system. The absence of recorded opposition or amendments in the provided context suggests no documented controversy in the available record, but that cannot be inferred as consensus.
Contention
The main policy issue is the reimbursement benchmark itself: providers may favor a higher or more predictable floor for out-of-network payment, while HMOs may view the updated formula as increasing costs or reducing flexibility. Another possible point of contention is the use of a 2019 baseline inflated by the Medicare Economic Index, which may be seen as more favorable to providers than a prior-year average depending on market conditions. Because no hearing testimony or vote history was provided, the specific positions of stakeholders such as HMOs, physician groups, hospitals, or consumer advocates are not documented in the supplied record.