Maryland HB 403: Maryland Patient Referral Law - Compensation Arrangements Under Federally Approved Programs and Models

Bill Text

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb0403*

HOUSE BILL 403
J2, J3, C3 7lr1163
CF 7lr1165
By: Delegate Pendergrass
Introduced and read first time: January 26, 2017
Assigned to: Health and Government Operations

A BILL ENTITLED

AN ACT concerning 1

Maryland Patient Referral Law – Compensation Arrangements Under Federally 2
Approved Programs and Models 3

FOR the purpose of exempting, under certain circumstances, a health care practitioner who 4
has a certain compensation arrangement with a health care entity from a certain 5
provision of law that prohibits a health care practitioner from referring a patient or 6
directing certain persons to refer a patient to a certain health care entity; providing 7
that the exemption is null and void if the Maryland Insurance Commissioner issues 8
a certain order; providing that a certain provision of this Act may not be construed 9
to permit certain actions, impose certain obligations, require the disclosure of certain 10
information, authorize a certain payment, permit an arrangement that violates 11
certain provisions of law, modify certain definitions or exceptions, or require a 12
compensation agreement to comply with a certain provision of this Act; establishing 13
a certain filing fee; requiring a certain participation agreement and other documents 14
to be filed for approval with the Commissioner within a certain period of time before 15
a certain exemption is implemented; providing for a certain exception; requiring the 16
Commissioner to make a certain determination within a certain period of time; 17
requiring the Commissioner to issue a certain order to a filer under certain 18
circumstances; requiring the Commissioner to hold a hearing before issuing an order 19
and to give written notice of the hearing to the filer within a certain period of time; 20
requiring the notice to specify certain matters; requiring a filer to submit a revised 21
filing under certain circumstances; requiring the Commissioner to make a new 22
determination under certain circumstances; making a certain filing subject to a 23
certain fee; altering a certain definition; defining certain terms; and generally 24
relating to patient referrals, compensation arrangements under federally approved 25
programs and models, and the business of insurance. 26

BY repealing and reenacting, without amendments, 27
Article – Health Occupations 28
Section 1–301(a) and (g) through (i) 29
Annotated Code of Maryland 30

2 HOUSE BILL 403

(2014 Replacement Volume and 2016 Supplement) 1

BY repealing and reenacting, with amendments, 2
Article – Health Occupations 3
Section 1–301(c), (k), and (l) and 1–302 4
Annotated Code of Maryland 5
(2014 Replacement Volume and 2016 Supplement) 6

BY adding to 7
Article – Health Occupations 8
Section 1–301(k) 9
Annotated Code of Maryland 10
(2014 Replacement Volume and 2016 Supplement) 11

BY adding to 12
Article – Insurance 13
Section 2–112(a)(12) and 15–143 14
Annotated Code of Maryland 15
(2011 Replacement Volume and 2016 Supplement) 16

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
That the Laws of Maryland read as follows: 18

Article – Health Occupations 19

1–301. 20

(a) In this subtitle the following words have the meanings indicated. 21

(c) (1) “Compensation arrangement” means any agreement or system 22
involving any remuneration, INCLUDING CASH OR IN–KIND COMPENSATION, between a 23
health care practitioner or the immediate family member of the health care practitioner 24
and a health care entity. 25

(2) “Compensation arrangement” does not include: 26

(i) Compensation or shares under a faculty practice plan or a 27
professional corporation affiliated with a teaching hospital and comprised of health care 28
practitioners who are members of the faculty of a university; 29

(ii) Amounts paid under a bona fide employment agreement between 30
a health care entity and a health care practitioner or an immediate family member of the 31
health care practitioner; 32

(iii) An arrangement between a health care entity and a health care 33
practitioner or the immediate family member of a health care practitioner for the provision 34
of any services, as an independent contractor, if: 35

HOUSE BILL 403 3

1. The arrangement is for identifiable services; 1

2. The amount of the remuneration under the arrangement 2
is consistent with the fair market value of the service and is not determined in a manner 3
that takes into account, directly or indirectly, the volume or value of any referrals by the 4
referring health care practitioner; and 5

3. The compensation is provided in accordance with an 6
agreement that would be commercially reasonable even if no referrals were made to the 7
health care provider; 8

(iv) Compensation for health care services pursuant to a referral 9
from a health care practitioner and rendered by a health care entity, that employs or 10
contracts with an