Health Insurance - Utilization Review - Exemption for Participation in Value-Based Care Arrangements
SB475 would limit the use of certain utilization review tools by health insurers and HMOs when a provider participates in a qualifying two-sided value-based care arrangement. Specifically, the bill prohibits carriers from imposing prior authorization, step therapy, or quantity limits on health care services that are included in such arrangements. It defines eligible providers broadly to include individual 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 two-sided incentive arrangements. These include requirements for written contracts, target budgets, limits on recoupment, opportunities for provider gains, independent audit and dispute resolution procedures, good-faith renegotiation when circumstances change, quarterly disclosure of relevant cost-sharing and payment information, and restrictions on midterm amendments. The bill applies to health insurance policies, contracts, and health benefit plans issued, delivered, or renewed in Maryland on or after January 1, 2026.
SB475 would amend Maryland Insurance law by adding a new section governing two-sided incentive arrangements and by expanding existing utilization review rules to bar prior authorization, step therapy, and quantity limits for services covered under those arrangements. It would affect insurers, nonprofit health service plans, and health maintenance organizations that provide hospital, medical, or surgical benefits in the state, while preserving existing hospital rate-setting authority of the Health Services Cost Review Commission. The practical effect would be to give participating providers more flexibility in delivering care under value-based contracts and to reduce insurer utilization management for those services.
Based on the bill text and the absence of recorded committee testimony or votes in the provided materials, the bill appears to be framed positively as a value-based care measure intended to support provider participation in alternative payment models. The structure of the bill suggests an effort to balance insurer and provider interests by allowing recoupment and performance-based incentives while limiting administrative barriers. No opposition or recorded vote history is provided, so the overall sentiment cannot be measured from committee action, but the bill’s design indicates support for value-based care reform.
The main points of potential contention are the limits on insurer utilization management and the restrictions on carrier recoupment. Carriers may view the prohibition on prior authorization, step therapy, and quantity limits as a reduction in cost-control tools, while providers may support it as a way to reduce administrative burden and align care decisions with value-based contracts. Another possible issue is the bill’s detailed contract and disclosure requirements, including recoupment caps, audit rights, and dispute resolution, which could be seen as protective for providers but administratively burdensome for carriers. The bill also preserves hospital rate-setting authority, which suggests an effort to avoid conflict with existing state hospital payment regulation.