# Health - General (GHG)

## Title 2. Maryland Department of Health

### Subtitle 1

#### Section 2-101

There is a Maryland Department of Health, established as a principal department of the State government.

#### Section 2-102

(a) The head of the Department is the Secretary of Health, who shall be appointed by the Governor with the advice and consent of the Senate.

(b)

  (1) The Secretary serves at the pleasure of the Governor and is responsible directly to the Governor. The Secretary shall advise the Governor on all matters assigned to the Department and is responsible for carrying out the Governor's policies on these matters.

  (2) The Secretary is responsible for the operation of the Department and shall establish guidelines and procedures to promote the orderly and efficient administration of the Department. The Secretary may establish, reorganize, or abolish areas of responsibility in the Department as necessary to fulfill the duties assigned to the Secretary.

(c) The Secretary is entitled to the salary provided in the State budget.

#### Section 2-103

(a)

  (1) With the approval of the Governor, the Secretary shall appoint the following five deputy secretaries:

    (i) The Deputy Secretary for Behavioral Health;

    (ii) The Deputy Secretary for Health Care Financing;

    (iii) The Deputy Secretary for Operations;

    (iv) The Deputy Secretary for Public Health Services; and

    (v) The Deputy Secretary for Developmental Disabilities.

  (2) The deputy secretaries serve at the pleasure of the Secretary.

  (3) The deputy secretaries are entitled to the salary provided in the State budget.

  (4) The deputy secretaries have the duties provided by law or delegated by the Secretary.

(b)

  (1) The Secretary may employ a staff in accordance with the State budget.

  (2) Each deputy secretary and professional consultant is appointed by and serves at the pleasure of the Secretary.

  (3) Except as provided in paragraph (5) of this subsection or otherwise by law, the Secretary shall appoint and remove all other staff in accordance with the provisions of the State Personnel and Pensions Article.

  (4) The appointment or removal of staff of any unit in the Department is subject to the approval of the Secretary. As to any unit in the Department, the Secretary may delegate this authority to the head of that unit.

  (5) All personnel in the Department, Grade 18 and above, who administer or direct a program, shall:

    (i) Be in the executive service, management service, or special appointments in the State Personnel Management System; and

    (ii) Be appointed by, and serve at the pleasure of, the Secretary.

  (6) All personnel in the Department, Grade 18 and above, who administer or direct a program, shall disclose all other employment and compensation outside the Department to the Secretary. An individual under this paragraph may not be employed or receive compensation outside the Department that would create a conflict of interest, an appearance of a conflict of interest, or impair the impartiality and independence of judgment of the individual.

(c) In determining the staff-to-resident ratio in any residential facility that the Department operates, the number of residents shall be the total of the residents who are physically present and who are on leave of 18 days or less.

#### Section 2-104

(a) The Secretary is responsible for the budget of the office of the Secretary and for the budget of each unit in the Department.

(b)

  (1) The Secretary may adopt rules and regulations to carry out the provisions of law that are within the jurisdiction of the Secretary.

  (2)

    (i) The Secretary shall adopt regulations, in consultation and cooperation with local governing bodies, to govern the siting of community residences for special populations funded by the Department, the Department of Housing and Community Development, the Department of Human Services, and the Department of Juvenile Services.

    (ii) Any regulations adopted shall comply with the federal Fair Housing Amendment Act of 1988.

    (iii) Prior to the adoption of any regulations proposed under this paragraph, the Secretary shall conduct a public hearing for the sole purpose of allowing all the governing bodies of each county and municipality the opportunity to review and comment on the proposed regulations.

  (3) The Secretary shall review and may revise the rules and regulations of:

    (i) Each unit in the Department that is authorized by law to adopt rules and regulations; and

    (ii) The Department.

(c) The Secretary may create an advisory board for the Department. The Secretary shall determine the size of the advisory board. The members shall be representative of the different professional areas or fields of endeavor with which the Department is concerned.

(d) The Secretary may create any advisory council that the Secretary considers necessary and assign appropriate functions to it.

(e) The Secretary shall have a seal.

(f)

  (1) The Secretary is responsible for the coordination and direction of all planning that the office of the Secretary initiates.

  (2) The Secretary shall keep fully apprised of plans, proposals, and projects of each unit in the Department and, except as expressly provided otherwise, may approve, disapprove, or modify any of them.

(g) Each unit in the Department shall report to the Secretary as provided in the rules, regulations, or written directives that the Secretary adopts.

(h) Except as expressly provided otherwise, the Secretary may transfer, by rule, regulation, or written directive, any function, staff, or funds from any unit in the Department to the office of the Secretary or another unit in the Department. Any staff transferred to the office of the Secretary shall be provided space, equipment, and services by the unit from which it was transferred, unless the Secretary orders removal to another location for the proper and efficient functioning of that office.

(i) The Secretary may apply for, receive, and spend grants-in-aid by the federal government or any of its agencies or any other federal funds made available to the Department for use in carrying out the powers and duties of the Secretary or the Department.

(j) The Secretary shall pay all money collected by the Department under this article into the General Fund of this State.

(k)

  (1) The Secretary or a designee of the Secretary may subpoena any person or evidence, administer oaths, and take depositions and other testimony.

  (2) If a person fails to comply with a lawful order or subpoena issued under this subsection, on petition of the Secretary or designee, a court of competent jurisdiction may compel obedience to the order or subpoena or compel testimony or the production of evidence.

  (3) A witness who is subpoenaed at the request of the Secretary or designee is entitled to receive the same fees and mileage provided for by law in civil cases. However, a witness who is subpoenaed at the request of any other party is not entitled to fees or mileage, unless the Secretary or designee certifies that the testimony was material to the matter investigated. The fee and mileage paid under this subsection shall be audited and paid by this State in the same way other expenses are audited and paid and shall be charged to the general appropriation for the Department.

(l)

  (1) The Secretary or an agent or employee of the Secretary may enter, at any reasonable hour, a place of business or public premises if the entry is necessary to carry out a duty under this article or the Health Occupations Article.

  (2) A person may not deny or interfere with an entry under this subsection.

  (3) A person who violates any provision of this subsection is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $100.

(m) The Secretary shall carry out and enforce the provisions of this article, the rules and regulations of the Department, and any other provisions of law that relate to the Secretary or the Department.

(n)

  (1) The Secretary may adopt regulations establishing fees not to exceed an amount sufficient to cover the administrative costs associated with:

    (i) Inspections or investigations carried out under this article; and

    (ii) Permits, licenses, certifications, or registrations issued under this article.

  (2) The Secretary may waive all or part of any fee established under this subsection.

(o)

  (1) The Secretary shall designate an agricultural ombudsman.

  (2) The agricultural ombudsman shall:

    (i) Serve as the primary point of contact for individuals involved in agriculture who interact with the Department; and

    (ii) Provide information regarding departmental regulations relating to on-farm food processing, on-farm food preparation, and other on-farm activities.

(p)

  (1)

    (i) In this subsection the following words have the meanings indicated.

    (ii) "Alternative workweek" means a work schedule for an employee of a State facility under which the employee may work less than 40 hours in a week.

    (iii) "State facility" means a health care facility that is:

      (1) Owned or operated by the Department; and

      (2) Open 24 hours a day and 7 days a week.

  (2) Beginning May 1, 2021, the Secretary may authorize an employee of a State facility to work according to an alternative workweek if the alternative workweek is consistent with:

    (i) Any applicable collective bargaining memorandum of understanding; or

    (ii) If the employee is not covered by an applicable collective bargaining memorandum of understanding, any other written agreement.

  (3) An employee of a State facility who works an alternative workweek as authorized under paragraph (2) of this subsection shall be considered a full-time employee of the State, notwithstanding any other provision of law.

#### Section 2-104.1

(a) Before procuring a system for collecting and storing electronic health records, as defined in Sec. 19-142 of this article, the Department shall consult with local health departments to assess the necessary qualities of an electronic health records system.

(b) If the Department procures a system for collecting and storing electronic health records, the Department shall notify each health officer for a county and offer the county health department the opportunity to join the procurement.

#### Section 2-105

(a) The Secretary shall establish general policy for, and adopt standards to promote and guide the development of, the physical and mental health services of this State and its subdivisions.

(b) The Secretary is responsible for the health interests of the people of this State and shall supervise generally the administration of the health laws of this State and its subdivisions.

(c) The Secretary shall adopt and revise as necessary a State health improvement plan that includes the following:

  (1) A description of the components that should comprise the health care system;

  (2) The goals and policies for Maryland's health care system;

  (3) Identification of unmet needs and excess services for facilities and services not regulated by the certificate of need program; and

  (4) An assessment of the financial resources required and available for the health care system.

#### Section 2-106

(a) The following units are in the Department:

  (1) Anatomy Board.

  (2) Behavioral Health Administration.

  (3) Developmental Disabilities Administration.

  (4) Health Services Cost Review Commission.

  (5) Maryland Psychiatric Research Center.

  (6) Office of the Chief Medical Examiner.

  (7) Board of Examiners for Audiologists, Hearing Aid Dispensers, Speech-Language Pathologists, and Music Therapists.

  (8) Board of Chiropractic Examiners.

  (9) Board of Dental Examiners.

  (10) Board of Dietetic Practice.

  (11) Board of Electrologists.

  (12) Board of Morticians and Funeral Directors.

  (13) Board of Nursing.

  (14) Board of Long-Term Care Administrators.

  (15) Board of Occupational Therapy Practice.

  (16) Board of Examiners in Optometry.

  (17) Board of Pharmacy.

  (18) Board of Physical Therapy Examiners.

  (19) Board of Physicians.

  (20) Board of Podiatric Medical Examiners.

  (21) Board of Professional Counselors and Therapists.

  (22) Board of Examiners of Psychologists.

  (23) Board of Social Work Examiners.

  (24) Acupuncture Board.

  (25) Board of Massage Therapy Examiners.

  (26) Board for Certification of Residential Child Care Program Professionals.

  (27) Board of Environmental Health Specialists.

(b) The Department also includes every other unit that is in the Department under any other law.

(c) The Secretary has the authority and powers specifically granted to the Secretary by law over the units in the Department. All authority and powers not so granted to the Secretary are reserved to those units free of the control of the Secretary.

#### Section 2-107

(a) The Attorney General is legal adviser to the Department.

(b) The Attorney General shall assign to the Department the number of assistant attorneys general authorized by law to be assigned to the Department and any additional ones necessary to give effective legal advice and counsel. The Attorney General also shall designate an assistant attorney general as counsel to the Department.

(c) The counsel to the Department may have no duty other than to give the legal aid, advice, and counsel required by the Secretary and any other official of the Department, to supervise the other assistant attorneys general assigned to the Department, and to perform for the Department the duties that the Attorney General assigns. The counsel shall perform these duties subject to the control and supervision of the Attorney General. After the Attorney General designates the counsel to the Department, the Attorney General may not reassign the counsel without consulting the Secretary.

#### Section 2-108

(a) On the Secretary's initiative or on request of a community or voluntary, nonprofit organization, the Secretary may conduct a survey to identify any area in this State that has a substantial deficiency in general or specific medical or health care facilities, staff, or services.

(b) In cooperation with appropriate county and State groups, the Secretary may provide the community or organization with counsel and other help to establish medical or health care facilities or services and to recruit medical or health care staff in an underserved area identified as a result of the survey conducted in accordance with subsection (a) of this section.

(c) If the counsel and other help provided under subsection (b) of this section do not result in feasible or successful proposals, or if other action is necessary to assure the public health of the underserved area, the Secretary may:

  (1) Provide the needed health care facilities, staff, or services by contract with one or more physicians, hospitals, or other medical groups or personnel; or

  (2) To facilitate the provision of State health care services to the underserved area, approve a contract or other written arrangement with a public or private health care entity, including:

    (i) A federally qualified health center;

    (ii) A health care facility, as defined in Sec. 19-114 of this article;

    (iii) A health benefit plan or insurance carrier;

    (iv) A health maintenance organization;

    (v) A managed care organization; and

    (vi) Any other entity that finances the provision of or delivers health care services to the area.

### Subtitle 3. Special Provisions as to Mental Health

#### Section 2-301

The Governor shall include in the State budget, beginning with fiscal year 1997, at a minimum, sufficient funds for local health services as required by this subtitle.

#### Section 2-302

(a) The funding required in the State budget for local health services, exclusive of special fund and federal appropriations, shall be at least the amount set forth in subsection (b) of this section.

(b) The funding shall be:

  (1) For fiscal years 2019, 2020, 2021, 2022, 2023, and 2024, the amount of funding provided through the formula for the preceding fiscal year adjusted for:

    (i) Inflation, as measured by the Consumer Price Index (All Urban Consumers), on June 30 of the second preceding fiscal year, calculated by the Bureau of Labor Statistics of the U.S. Department of Labor; and

    (ii) Population growth, as measured by the growth in the total population of the State on June 30 of the second preceding fiscal year, according to the most recent statistics available through the U.S. Department of Commerce;

  (2) For fiscal year 2025, $70,000,000, to be distributed to each municipality or subdivision in the same proportion as the fiscal year 2024 funding distributed to each municipality or subdivision;

  (3) For fiscal year 2026, $80,000,000, to be distributed to each municipality or subdivision in the same proportion as the fiscal year 2025 funding distributed to each municipality or subdivision; and

  (4) For fiscal year 2027 and each subsequent fiscal year, the greater of:

    (i) The funding provided by the formula for the immediately preceding fiscal year; or

    (ii) The actual funds appropriated for the immediately preceding fiscal year, adjusted for:

      (1) Inflation, as measured by the Consumer Price Index (All Urban Consumers), on June 30 of the second immediately preceding fiscal year, calculated by the Bureau of Labor Statistics of the U.S. Department of Labor; and

      (2) Population growth, as measured by the growth in the total population of the State on June 30 of the second immediately preceding fiscal year, according to the most recent statistics available through the U.S. Department of Commerce.

(c) For fiscal year 2027 and each subsequent fiscal year, no subdivision may receive less State funding for local health services under this section than that subdivision received in fiscal year 2026.

(d) The Secretary shall, in consultation with local health department directors, adopt regulations to guide the distribution of the funding required under this section. The regulations shall give consideration to appropriate measures of community health need, local funding effort, and other relevant factors.

#### Section 2-303

As to appropriations required by this subtitle, a local match shall be required as a condition of any distribution to a subdivision; however, the local match percentage required by the Secretary of Health may not exceed the local match percentage required for the subdivision for fiscal year 1996.

#### Section 2-304

The appropriations described in this subtitle shall be used for programs, including related administrative expenses, directed at the following:

(1) Communicable disease control services;

(2) Environmental health services;

(3) Family planning services;

(4) Maternal and child health services;

(5) Wellness promotion services;

(6) Adult health and geriatric services;

(7) Data management and exchange services regarding communicable diseases and other health matters, as allowed under federal and State law;

(8) Providing protective equipment for nurses, physician assistants, physicians, and other health care personnel in contact with patients;

(9) Providing equipment, medication, and other materials determined to be appropriate to prepare for potential communicable disease emergencies, or other public health emergencies; and

(10) Administration and communication services associated with the provision of the services described in items (1) through (9) of this section.

#### Section 2-305

The funds designated for the provision of local health services under this subtitle may not be transferred to any other program for any other purpose.

### Subtitle 4

#### Section 2-401

(a) A local health planning agency shall:

  (1) Develop a local health plan by assessing local health needs and resources; and

  (2) Provide input into the development of statewide criteria and standards for certificate of need and health planning.

(b) The Department may require that in developing local health plans, each local health planning agency:

  (1) Use data compatible with State data and data used by other local health planning agencies;

  (2) Meet applicable planning specifications; and

  (3) Work with other local health planning agencies to ensure consistency among local health plans.

(c) Subject to the annual State budget, the Department shall provide funding to local health planning agencies for implementation of the functions under this section and any other functions required by the Department or the Maryland Health Care Commission.

### Subtitle 5

#### Section 2-501

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

(b) "Abuse" means provider practices that are inconsistent with sound fiscal, business, or medical practices and result in unnecessary costs to a program, or in reimbursement for services that are not medically necessary or that fail to meet professionally recognized health care standards.

(c) "Claim" means a request or demand for money, property, or services made under contract or otherwise, by a contractor, grantee, provider, or other person seeking money for the provision of health services if:

  (1) The State or Department provides any portion of the money or property that is requested or demanded; or

  (2) The State or Department reimburses the contractor, grantee, provider, or other person for any portion of the money or property that is requested or demanded.

(d) "Employee" means any individual who performs services for, or under the control or direction of, a provider for wages or other remuneration.

(e)

  (1) "Fraud" means an intentional material deception or misrepresentation made by a person with the knowledge that the deception or misrepresentation could result in some unauthorized benefit or payment.

  (2) "Fraud" includes any act that constitutes fraud under applicable State or federal law.

(e-1) "Office" means the Maryland Office of the Inspector General for Health established under Sec. 2-502 of this subtitle.

(f) "Program" means the Medical Assistance Program, the Cigarette Restitution Fund Program, the Developmental Disabilities Administration, the Behavioral Health Administration, the Prevention and Health Promotion Administration, or any other unit of the Department that pays a provider for a service rendered or claimed to have been rendered to a recipient.

(g)

  (1) "Provider" means:

    (i) An individual licensed or certified under the Health Occupations Article to provide health care;

    (ii) A licensed facility that provides health care to individuals;

    (iii) Any other person who or entity that provides health care, products, or services to a program recipient; or

    (iv) A contractor, subcontractor, or vendor who directly or indirectly provides the Department or its recipients supplies, drugs, equipment, or services.

  (2) "Provider" does not include a State agency that receives grant funding from or through the Department if that agency has in place a corporate compliance program that meets departmental requirements.

(h) "Recipient" means an individual who receives benefits under a program.

(i) "Recovery" means the repayment of money to the Department by a provider through return, reimbursement, recoupment, withholding of future payments, offsets, or any other method.

#### Section 2-502

(a) There is a Maryland Office of the Inspector General for Health.

(b) The Office is an independent unit of the State.

(c)

  (1) Subject to paragraph (2) of this subsection, the Office shall have access to the following services of the Department:

    (i) Information technology;

    (ii) Budget and finance;

    (iii) Human resources;

    (iv) Police;

    (v) Procurement; and

    (vi) Support services.

  (2) The Office shall, in consultation with the Department, develop policies and adopt regulations regarding the use and confidentiality of the services listed in paragraph (1) of this subsection.

(d) The Office shall:

  (1) Maintain a physical location within the Department; and

  (2) Develop policies and adopt regulations regarding the use and confidentiality of the location of the Office.

#### Section 2-502.1

(a) There is an Inspector General in the Maryland Office of the Inspector General for Health.

(b)

  (1) An individual is eligible to be the Inspector General only if the individual executes an affidavit stating that the individual will not accept appointment to, or be a candidate for, a State or local office:

    (i) During the period of service as the Inspector General; and

    (ii) For at least 3 years immediately after the individual last serves as the Inspector General.

  (2) The Inspector General shall renew the affidavit every 2 years during the period of service.

  (3) A failure to renew the affidavit under this subsection shall subject the Inspector General to removal from office under this section.

(c)

  (1) The Inspector General shall be appointed unanimously by the Governor, the Attorney General, and the State Treasurer, subject to the advice and consent of the Senate.

  (2) The term of the Inspector General is 5 years, beginning July 1 after the appointment of the Inspector General.

  (3) At the end of a term, the Inspector General shall continue to serve until a successor is appointed.

  (4) If a vacancy occurs in the Office, an interim Inspector General shall be appointed as successor to serve for the remainder of the unexpired term.

(d) The Inspector General may be removed unanimously by the Governor, the Attorney General, and the State Treasurer for:

  (1) Misconduct in office;

  (2) Persistent failure to perform the duties of the Office; or

  (3) Conduct prejudicial to the proper administration of justice.

(e)

  (1) Subject to paragraph (2) of this subsection, the Inspector General must be professionally qualified through experience or education in at least one of the following areas:

    (i) Law;

    (ii) Auditing;

    (iii) Government operations;

    (iv) Financial management; or

    (v) Health policy.

  (2) If the Inspector General is professionally qualified in the area of health policy, the Inspector General also must be professionally qualified through experience or education in at least one of the other areas listed in paragraph (1) of this subsection.

(f)

  (1) The Inspector General is entitled to the salary provided in the State budget.

  (2) Funding for the Office shall be as provided in the State budget.

#### Section 2-502.2

(a) There is a Compliance Officer within the Maryland Office of the Inspector General for Health.

(b)

  (1) The Compliance Officer shall be designated by the Inspector General.

  (2) The Compliance Officer shall be professionally qualified through experience or education in at least one of the following areas:

    (i) Administrative management;

    (ii) Health care compliance standards; or

    (iii) Public health.

(c) The Compliance Officer shall ensure that units and employees of the Department comply with:

  (1) Best practices in health care, public health, and government administration; and

  (2) Laws, regulations, and Department policies.

#### Section 2-503

(a) The Inspector General:

  (1) May investigate fraud, waste, abuse of departmental funds, and behavior in the Department that threatens public safety or demonstrates negligence, incompetence, or malfeasance;

  (2) Shall cooperate with and coordinate investigative efforts with the Medicaid Fraud Control Unit and where a preliminary investigation establishes a sufficient basis to warrant referral, shall refer such matters to the Medicaid Fraud Control Unit; and

  (3) Shall cooperate with and coordinate investigative efforts with departmental programs and other State and federal agencies to ensure a provider is not subject to duplicative audits.

(b)

  (1) The Inspector General or a designated Assistant Inspector General may subpoena any person or evidence, administer oaths, and take depositions and other testimony for the purpose of investigating fraud, waste, abuse of departmental funds, or behavior in the Department that threatens public safety or demonstrates negligence, incompetence, or malfeasance.

  (2) If a person fails to comply with a lawful order or subpoena issued under this subsection, on petition of the Inspector General or a designated Assistant Inspector General, a court of competent jurisdiction may compel:

    (i) Compliance with the order or subpoena; or

    (ii) Testimony or the production of evidence.

(c) Within 30 business days after receiving a complaint or allegation, the Inspector General, the Compliance Officer, or a designated Assistant Inspector General shall respond to the individual who filed the complaint or allegation with:

  (1) A preliminary indication of whether the Office of the Inspector General is able to investigate the complaint or allegation; and

  (2) If the Office of the Inspector General is unable to investigate the complaint or allegation:

    (i) The reason for not being able to investigate, unless providing the reason would have a negative impact on or jeopardize an investigation being conducted by the Office of the Inspector General, a managed care organization, another unit of government, or law enforcement; and

    (ii) The contact information for the Office of Legislative Audits Fraud Hotline.

#### Section 2-504

The Inspector General, in collaboration with the appropriate departmental program, may:

(1) Take necessary steps to recover any mistaken claims paid or payments obtained in error or fraudulent claims paid to or obtained by a provider; and

(2) Take necessary steps to recover the cost of benefits mistakenly paid or obtained in error, or fraudulently paid to or obtained by a recipient.

#### Section 2-504.1

(a) Except as otherwise prohibited by State or federal law, in the sole discretion of the Inspector General, the Inspector General may impose a civil money remedy against a provider for a violation of State or federal law governing the conditions of payment for any service or item for which the provider submitted a claim for payment and received payment.

(b) A civil money remedy imposed under this section:

  (1) Is in lieu of full payment or full adjustment of the paid claim and not in addition to repayment of the claim;

  (2) May not be less than the federal financial participation share of the identified improper claim amount;

  (3) May not be imposed if the claim was included in the universe of claims under an extrapolation calculation; and

  (4) Is only available if the provider has not been subjected to a repayment penalty or fine, a criminal action, or a civil false claims action under either federal or State law for the same claim.

(c)

  (1) A civil money remedy may not exceed the amount of reimbursement that the provider received for the paid claim.

  (2) In determining whether to impose a civil money remedy under this section and in setting the amount of the civil money remedy, the Inspector General shall consider:

    (i) The number, nature, and seriousness of the violations;

    (ii) The provider's history of compliance;

    (iii) The efforts made by the provider to correct the violations and any continuation of conduct after notification of possible violations;

    (iv) The provider's level of cooperation with the Department or Inspector General as it relates to the review of the claim;

    (v) The degree of risk to the health, life, or safety of consumers as a result of the violations; and

    (vi) Any other reasonable factors as fairness may require.

  (3) In weighing the factors set forth in paragraph (2) of this subsection, the Inspector General shall, if appropriate, give special consideration to the extent to which the provider's size, operations, or financial condition:

    (i) May have contributed to the violations; and

    (ii) May affect the provider's ability to provide care and continue operations after payment of a civil money remedy.

(d) If a civil money remedy is imposed under this section, the Inspector General shall issue a written notice and order to the provider that:

  (1) States the total amount of the civil money remedy; and

  (2) Includes the following information:

    (i) The basis on which the order is made;

    (ii) Each regulation or statute violated;

    (iii) The amount of each civil money remedy imposed for each violation;

    (iv) The number of claims and total value of the claims identified with errors; and

    (v) The manner in which the amount of the civil money remedy was calculated.

(e) The notice and order shall be served on the provider by certified mail and shall include a statement that explains the provider's right to appeal the order in accordance with Title 10, Subtitle 2 of the State Government Article.

(f)

  (1) An order that imposes a civil money remedy is final when the provider has exhausted all opportunities to contest the civil money remedy in accordance with Title 10, Subtitle 2 of the State Government Article.

  (2) After exhaustion of all appeals, a provider shall pay a civil money remedy to the Department within 10 days after the provider receives a final order that affirms the imposition of the civil money remedy unless the Inspector General negotiates and approves a repayment schedule.

(g) The Inspector General, in consultation with stakeholders, shall adopt regulations to implement this section.

#### Section 2-505

(a) A person is not civilly liable for:

  (1) Making a report in good faith of fraud, waste, or abuse; or

  (2) Participating in any investigation related to fraud, waste, or abuse.

(b)

  (1) This subsection does not apply to an employee as defined in Sec. 1-501(c) of the Health Occupations Article or a State employee.

  (2) A provider may not take a retaliatory action against an employee because the employee:

    (i) Discloses or threatens to disclose to a supervisor or to a public body an activity, policy, or practice of the provider that the employee reasonably believes is in violation of this subtitle or a regulation adopted under this subtitle;

    (ii) Provides information to, or testifies before, a public body conducting an investigation, hearing, or inquiry into a suspected violation by the provider under this subtitle or a regulation adopted under this subtitle; or

    (iii) Objects to or refuses to participate in any activity, policy, or practice that the employee reasonably believes is in violation of this subtitle or regulations adopted under this subtitle.

  (3) Any employee who is subject to an action in violation of paragraph (2) of this subsection may institute a civil action in the county where:

    (i) The alleged violation occurred;

    (ii) The employee resides; or

    (iii) The provider maintains its principal office in the State.

  (4) The action shall be brought within 1 year after the alleged violation of paragraph (2) of this subsection or within 1 year after the employee first became aware of the alleged violation of paragraph (2) of this subsection.

  (5) In any action brought under this subsection, a court may:

    (i) Issue an injunction to restrain continued violation of this subsection;

    (ii) Reinstate the employee to the same or an equivalent position held before the violation of paragraph (2) of this subsection;

    (iii) Remove any adverse personnel record entries based on or related to the violation of paragraph (2) of this subsection;

    (iv) Reinstate full fringe benefits and seniority rights;

    (v) Require compensation for lost wages, benefits, and other remuneration; and

    (vi) Assess reasonable attorney's fees and other litigation expenses against:

      (1) The provider, if the employee prevails; or

      (2) The employee, if the court determines that the action was brought by the employee in bad faith and without basis in law or fact.

  (6) A provider shall:

    (i) Conspicuously display notices of its employee protections under this subsection; and

    (ii) Use appropriate means to inform its employees of the protections and obligations provided under this subsection.

#### Section 2-506

On or before December 1 each year, the Office shall submit a report to the Secretary, the Governor, and, in accordance with Sec. 2-1257 of the State Government Article, the Senate Budget and Taxation Committee, the Senate Finance Committee, the House Appropriations Committee, the House Health and Government Operations Committee, and the Joint Audit and Evaluation Committee on:

(1) The Office's activities during the immediately preceding fiscal year, including:

  (i) Investigations of fraud, waste, and abuse of departmental funds undertaken by the Office, including specific findings and recommendations related to the investigations;

  (ii) A summary of matters referred to the Medicaid Fraud Control Unit by the Office;

  (iii) Recoveries by the Office of mistaken claims paid or payments obtained in error or fraudulent claims paid to or obtained by a provider;

  (iv) Recoveries by the Office of the cost of benefits mistakenly paid or obtained in error, or fraudulently paid to or obtained by a recipient; and

  (v) A summary of matters referred to prosecutive authorities and the resulting prosecutions and convictions; and

(2) Any regulatory or statutory changes necessary to ensure compliance with applicable federal and State laws.

### Subtitle 6

#### Section 2-601

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

(b)

  (1) "Claim" means a request or demand, under a contract or otherwise, for money or other property, whether or not the State has title to the money or property, that is:

    (i) Presented through a State health plan or a State health program to an officer, employee, or agent of the State; or

    (ii) Made to a contractor, grantee, or other recipient, if the money or other property is to be spent or used on the State's behalf or to advance a State interest through a State health plan or State health program, and the State:

      (1) Provides or has provided any portion of the money or other property requested or demanded; or

      (2) Will reimburse the contractor, grantee, or other recipient for any portion of the money or other property that is requested or demanded.

  (2) "Claim" does not include requests or demands for money or other property that the State through a State health plan or State health program has paid to an individual as compensation for State employment or as an income subsidy with no restrictions on that individual's use of the money or other property.

(c) "Documentary material" includes:

  (1) The original or a copy of:

    (i) A book;

    (ii) A record;

    (iii) A report;

    (iv) A memorandum;

    (v) A paper;

    (vi) A communication;

    (vii) A tabulation;

    (viii) A chart;

    (ix) A document; or

    (x) Data compilation stored in or accessible through a computer or other information retrieval system, including instructions and all other materials necessary to use or interpret the data compilation; and

  (2) Any product of discovery, including:

    (i) The original or duplicate of any deposition, interrogatory, document, thing, result of an inspection of land or other property, examination, or admission that is obtained by any method of discovery in any judicial or administrative proceeding of an adversarial nature;

    (ii) Any digest, analysis, selection, compilation, or derivation of any item listed in item (i) of this item; and

    (iii) Any index or other manner of access to any item listed in item (i) of this item.

(d) "Employee" means an individual who performs services:

  (1) For and under the control and direction of an employer; and

  (2) Under an employer's promise or implied promise of payment of wages or other remuneration.

(e) "Employer" means a person or group of persons who, acting directly or indirectly on behalf of another person or group of persons:

  (1) Allows an employee to perform services under the employer's control and direction; and

  (2) Promises or implies that the employee will receive wages or other remuneration in payment for the performance of those services.

(f)

  (1) "Knowing" or "knowingly" means, with respect to information and without requiring proof of specific intent to defraud, that a person:

    (i) Has actual knowledge of the information;

    (ii) Acts in deliberate ignorance of the truth or falsity of the information; or

    (iii) Acts in reckless disregard of the truth or falsity of the information.

  (2) "Knowing" or "knowingly" does not mean, with respect to information, that a person acts in a manner that constitutes mistake or negligence.

(g) "Material" means having a natural tendency to influence or be capable of influencing the payment or receipt of money or other property.

(h) "Obligation" means an established duty, whether or not fixed, arising from:

  (1) An express or implied:

    (i) Contractual relationship;

    (ii) Grantor-grantee relationship; or

    (iii) Licensor-licensee relationship;

  (2) A fee-based or similar relationship;

  (3) Statute or regulation; or

  (4) The retention of an overpayment.

(i) "Provider" has the meaning stated in Sec. 2-501 of this title.

(j) "Public body" means:

  (1) The General Assembly or any other elected body;

  (2) A member or an employee of the General Assembly or other elected body;

  (3) A State court;

  (4) A member or an employee of a State court;

  (5) A State or local regulatory, administrative, or public agency or authority;

  (6) An instrumentality of a State or local regulatory, administrative, or public agency or authority;

  (7) A State or local law enforcement agency, prosecutorial office, or police or peace officer;

  (8) A State or local department of an executive branch of government; or

  (9) A division, board, bureau, office, committee, or commission of any of the public bodies listed in this subsection.

(k) "Retaliatory action" means:

  (1) Discharging, suspending, demoting, threatening, harassing, or discriminating against an employee, contractor, or agent; or

  (2) Any other adverse action taken against an employee, contractor, or agent relating to the conditions of employment, contract, or agency.

(l)

  (1) "State health plan" means:

    (i) The State Medical Assistance Plan established in accordance with the federal Social Security Act of 1939, as amended;

    (ii) A medical assistance plan established by the State; or

    (iii) A private health insurance carrier, health maintenance organization, managed care organization as defined in Sec. 15-101 of this article, health care cooperative or alliance, or another person that provides or contracts to provide health care services that are wholly or partially reimbursed by, or are a required benefit of, a health plan established in accordance with the federal Social Security Act of 1939, as amended, or by the State.

  (2) "State health plan" includes a person who provides or contracts or subcontracts to provide health care services for an entity described in paragraph (1) of this subsection.

(m) "State health program" means the Medical Assistance Program, the Cigarette Restitution Fund Program, the Developmental Disabilities Administration, the Behavioral Health Administration, the Prevention and Health Promotion Administration, or any other unit of the Department that pays a provider for a service rendered or claimed to have been rendered to a recipient.

(n) "Supervisor" means an individual within an employer's organization who has the authority to:

  (1) Direct and control the work performance of an employee; or

  (2) Take corrective action regarding the violation of a law or regulation that is the subject of a complaint or charge under this subtitle.

#### Section 2-602

(a) A person may not:

  (1) Knowingly present or cause to be presented a false or fraudulent claim for payment or approval;

  (2) Knowingly make, use, or cause to be made or used a false record or statement material to a false or fraudulent claim;

  (3) Conspire to commit a violation under this subtitle;

  (4) Have possession, custody, or control of money or other property used by or on behalf of the State under a State health plan or a State health program and knowingly deliver or cause to be delivered to the State less than all of that money or other property;

  (5)

    (i) Be authorized to make or deliver a receipt or other document certifying receipt of money or other property used or to be used by the State under a State health plan or a State health program; and

    (ii) Intending to defraud the State or the Department, make or deliver a receipt or document knowing that the information contained in the receipt or document is not true;

  (6) Knowingly buy or receive as a pledge of an obligation or debt publicly owned property from an officer, employee, or agent of a State health plan or a State health program who lawfully may not sell or pledge the property;

  (7) Knowingly make, use, or cause to be made or used, a false record or statement material to an obligation to pay or transmit money or other property to the State;

  (8) Knowingly conceal, or knowingly and improperly avoid or decrease, an obligation to pay or transmit money or other property to the State; or

  (9) Knowingly make any other false or fraudulent claim against a State health plan or a State health program.

(b)

  (1) A person who is found to have violated subsection (a) of this section is liable to the State for:

    (i) A civil penalty of not more than $10,000 for each violation of subsection (a) of this section; and

    (ii) An additional amount of not more than three times the amount of damages that the State sustains as a result of the acts of that person in violation of subsection (a) of this section.

  (2) The total amount owed by a person under paragraph (1) of this subsection may not be less than the amount of the actual damages the State health plan or State health program incurs as a result of the person's violation of subsection (a) of this section.

(c)

  (1) In determining the appropriate amount of fines and damages under subsection (b) of this section, the court shall consider:

    (i) The number, nature, and severity of the violations of this subtitle for which the person has been found liable;

    (ii) The number, nature, and severity of any previous violations of this subtitle;

    (iii) The degree of loss suffered by the State health plan or State health program;

    (iv) The person's history of billing compliance;

    (v) Whether the person has a compliance program in place;

    (vi) The extent to which the person has taken steps to address and correct the violation since the person became aware of the violation;

    (vii) The extent to which the violation caused harm or detriment to patients or consumers of the State health plan or State health program;

    (viii) Any funds previously returned to the State health plan or State health program in compliance with federal requirements regarding overpayments, to the extent the funds represented losses to the State health plan or State health program caused by the violation;

    (ix) Whether the person self-reported the violation, the timeliness of the self-reporting, the extent to which the person otherwise cooperated in the investigation of the violation, and the extent to which the person had prior knowledge of an investigation or other action relating to the violation; and

    (x) Any other factor as justice requires.

  (2) In weighing the factors set forth in paragraph (1) of this subsection, the court shall, where appropriate, give special consideration to:

    (i) The extent to which the person's size, operations, or financial condition may have affected each of the factors set forth in paragraph (1) of this subsection; and

    (ii) The extent to which the person's size, operations, or financial condition may affect the person's ability to provide care and continue operations after payment of damages and fines.

(d) The penalties provided in subsection (b) of this section are in addition to any criminal, civil, or administrative penalties provided under any other State or federal statute or regulation.

#### Section 2-603

(a) If the State finds that a person has violated or is violating Sec. 2-602(a) of this subtitle, the State may file a civil action in a court of competent jurisdiction within the State against the person.

(b) In filing a civil action under this section, the State may seek:

  (1) The penalties provided under Sec. 2-602(b) of this subtitle; and

  (2) Subject to the guidelines set forth in Sec. 2-605(a)(4) of this subtitle, court costs and attorney's fees.

#### Section 2-604

(a)

  (1)

    (i) A person may file a civil action on behalf of the person and the State in a court of competent jurisdiction within the State against a person who has acted or is acting in violation of Sec. 2-602(a) of this subtitle.

    (ii) A civil action filed under subparagraph (i) of this paragraph shall be brought in the name of the State.

  (2) A person filing an action under this section may seek:

    (i) The penalties provided under Sec. 2-602(b) of this subtitle; and

    (ii) Subject to the guidelines set forth in Sec. 2-605(a)(4) of this subtitle, court costs and attorney's fees.

  (3)

    (i) The person shall serve on the State a copy of the complaint and a written disclosure of substantially all material evidence and information that the person possesses, in accordance with the provisions of Title 2 of the Maryland Rules for serving process on the State.

    (ii)

      (1) The complaint shall be filed in camera and shall remain under seal for at least 60 days.

      (2) The complaint may not be served on the defendant until the complaint is unsealed and the court orders the complaint served.

      (3) Within 60 days after the State receives the complaint and the material evidence and information, the State may elect to intervene and proceed with the action.

  (4)

    (i) For good cause shown, the State may move the court for extensions of the time during which the complaint remains under seal under paragraph (3)(ii)1 of this subsection.

    (ii) Any motions made under subparagraph (i) of this paragraph may be supported by affidavits or other submissions in camera.

  (5)

    (i) The defendant may not be required to answer a complaint filed under this section until after the complaint is:

      (1) Unsealed and ordered by the court to be served; and

      (2) Served on the defendant in accordance with Title 2 of the Maryland Rules.

    (ii) When answering a complaint filed under this section, a defendant shall follow the time frames and other provisions for filing answers to a complaint as required under Title 2, Chapter 300 of the Maryland Rules.

    (iii) During the period in which the complaint is under seal, if the State's investigation reveals that the act, transaction, or occurrence that gave rise to the alleged violation of this subtitle is reasonably likely to be continuing, the State shall notify the defendant as soon as practicable without jeopardizing the course and conduct of the State's or the federal government's investigation of the violation, compromising the development of evidence, or violating any State or federal law.

  (6) Before the later of the expiration of the 60-day period during which the complaint remains under seal under paragraph (3)(ii)1 of this subsection or any extension of the 60-day period obtained under paragraph (4) of this subsection, the State shall:

    (i) Intervene and proceed with the action in a court of competent jurisdiction within the State; or

    (ii) Notify the court that it will not intervene and proceed with the action.

  (7) If the State does not elect to intervene and proceed with the action under paragraph (6) of this subsection, before unsealing the complaint, the court shall dismiss the action.

  (8) If a person initiates an action under this section, no person other than the State may intervene in the action or initiate a related action based on the facts underlying the pending action.

(b)

  (1) If the State intervenes and proceeds with the action under subsection (a)(6)(i) of this section:

    (i) The State shall have the primary responsibility for proceeding with the action and may not be bound by any act of the person who initiated the action; and

    (ii) Subject to paragraphs (3) through (6) of this subsection, the person who initiated the action may continue as a party to the action.

  (2)

    (i) During an investigation by the State conducted either independently or in conjunction with a civil action filed under this subtitle, the Attorney General shall have the same rights of discovery as a civil litigant in the circuit court under Title 2, Chapter 400 of the Maryland Rules.

    (ii) A person from whom the Attorney General seeks discovery shall be considered a party under Title 2, Chapter 400 of the Maryland Rules.

  (3)

    (i) Notwithstanding the objections of the person initiating the action, the State may elect at any point to withdraw its intervention as a party to the action.

    (ii) If the State elects to withdraw as a party to the action:

      (1) The State shall notify the court and the party initiating the action; and

      (2) The court shall dismiss the action.

  (4) Notwithstanding the objections of the person initiating the action, if the court determines after a hearing that a proposed settlement is fair, adequate, and reasonable under the circumstances, the State may settle a civil action filed under this section.

  (5) On motion of the State or the defendant or on the court's own motion, the court may impose limitations on the participation of the person initiating an action under this section if:

    (i) The State shows that the person's unrestricted participation in the action would:

      (1) Interfere with or unduly delay the State in its pursuit of the civil action; or

      (2) Be repetitious, irrelevant, or harassing to the defendant; or

    (ii) The defendant shows that unrestricted participation by the person initiating the action would harass the defendant or cause the defendant undue burden or unnecessary expense.

  (6) Limitations imposed by the court under paragraph (5) of this subsection may include:

    (i) A limitation on the number of witnesses the person may call to testify;

    (ii) A limitation on the length of the testimony of witnesses called by the person;

    (iii) A limitation on the person's cross-examination of witnesses; or

    (iv) A limitation on the participation of the person in the litigation.

(c)

  (1) Instead of proceeding with a civil action filed under this subtitle, the State may pursue any alternative remedy available to the State, including any appropriate administrative proceeding to determine a civil money penalty.

  (2) If the State seeks an alternative remedy in another proceeding after intervening in a civil action filed under this section, the person initiating the action shall have the same rights in the alternative proceeding as the person would have had if the civil action had continued under this section.

  (3)

    (i) A finding of fact or conclusion of law made in any alternative proceeding that has become final shall be conclusive on all parties to an action filed under this subtitle.

    (ii) For purposes of subparagraph (i) of this paragraph, a finding or conclusion is final if:

      (1) It has been finally determined on appeal to the appropriate court of the State;

      (2) All time for filing the appeal with respect to the finding or conclusion has expired; or

      (3) The finding or conclusion is not subject to judicial review.

(d)

  (1) On a showing in camera by the State that certain actions of discovery by the person initiating the action would interfere with the State's investigation or prosecution of a criminal or civil matter arising out of the same facts, the court may stay the discovery for a period of not more than 60 days.

  (2) The court may extend the 60-day period on a further showing in camera that:

    (i) The State has pursued the criminal or civil investigation or proceeding with reasonable diligence; and

    (ii) Any proposed discovery in the civil action will interfere with the ongoing criminal or civil investigation or proceeding.

#### Section 2-605

(a)

  (1) If the State intervenes and proceeds with an action filed under Sec. 2-604 of this subtitle and the State prevails, the court shall award the person initiating the action an amount that is:

    (i) Not less than 15% and not more than 25% of the proceeds of the action or settlement of the claim; and

    (ii) Proportional to the amount of time and effort that the person substantially contributed to the final resolution of the civil action.

  (2)

    (i) If the court finds that the action is based primarily on disclosures of specific information relating to allegations or transactions in a criminal, civil, or administrative hearing, in a legislative or administrative report, hearing, audit, or investigation, or from the news media, the court may make an award to the person initiating the action that:

      (1) The court considers appropriate, taking into account the significance of the information and the role of the person initiating the action in advancing the case to litigation; and

      (2) Does not exceed 10% of the proceeds of the action.

    (ii) The information described in subparagraph (i) of this paragraph does not include information disclosed and provided by the person initiating the action.

  (3) Any payment to a person under paragraph (1) or (2) of this subsection shall be made from the proceeds of the action.

  (4)

    (i) In addition to the amount provided under paragraphs (1) and (2) of this subsection, a court may award the person initiating the action:

      (1) An amount for reasonable expenses that the court finds to have been necessarily incurred; and

      (2) Reasonable attorney's fees and costs.

    (ii) In determining the amount of any award under subparagraph (i) of this paragraph, the court shall consider the amount of any penalties and damages recovered in the action and any other factor as justice may require.

    (iii) Any expenses, fees, and costs awarded under this paragraph shall be awarded against the defendant.

(b)

  (1) If a court finds that the action is initiated by a person who planned and initiated or otherwise deliberately participated in the violation on which the action was based, the court may, to the extent it considers appropriate, reduce the share of the proceeds of the action that the person otherwise would have received under this section.

  (2) In reducing the share of the proceeds of the person initiating the action under this subsection, the court shall consider:

    (i) The role of the person in advancing the case to litigation; and

    (ii) Any relevant circumstances relating to the underlying violation.

  (3)

    (i) If the person initiating a civil action under Sec. 2-604 of this subtitle is convicted of criminal conduct arising from the person's participation in the violation on which the action was based prior to a final determination of the action, the person:

      (1) Shall be dismissed from the action; and

      (2) May not receive any share of the proceeds of the action.

    (ii) The dismissal of the person initiating the action in accordance with this paragraph does not prejudice the right of the State to continue the action.

  (4) If the person initiating a civil action under Sec. 2-604 of this subtitle is convicted of criminal conduct arising from the person's participation in the violation on which the action was based after the proceeds from the action are awarded to that person, the court shall order the person to repay the proceeds previously awarded.

(c) A court may award reasonable attorney's fees and expenses to a defendant and against the person initiating the action if:

  (1) The defendant prevails in the action; and

  (2) The court finds that the claim of the person initiating the action was brought primarily for purposes of harassment or otherwise brought in bad faith.

#### Section 2-606

(a) No court in this State shall have jurisdiction over an action filed under Sec. 2-604 of this subtitle against any member of the Legislative Branch or the Judiciary of the State, any member of the Governor's Executive Council, the Attorney General, the Comptroller, or the State Treasurer if the action is based on evidence or information known to the State when the action was filed.

(b) A civil action may not be brought under this subtitle by a person who is or was a public employee or public official if the allegations of the action are based substantially on:

  (1) Allegations of wrongdoing or misconduct that the person had a duty or obligation to report or investigate within the scope of the person's public employment or office; or

  (2) Information or records to which the person had access as a result of the person's public employment or office.

(c) A person may not bring an action under Sec. 2-604 of this subtitle that is based on allegations or transactions that are the subject of a civil suit or an administrative civil money penalty proceeding in which the State is already a party.

(d)

  (1) Except as provided in paragraphs (2) and (3) of this subsection, no court in this State shall have jurisdiction over an action filed under Sec. 2-604 of this subtitle that is based on the public disclosure of allegations or transactions:

    (i) In a criminal, civil, or an administrative hearing;

    (ii) In a legislative or an administrative report, a hearing, an audit, or an investigation; or

    (iii) From the news media.

  (2) Paragraph (1) of this subsection does not apply if the action is initiated by a person who:

    (i) Has direct and independent knowledge of the information on which the allegations are based; and

    (ii) Has voluntarily provided the information to the State before filing an action under Sec. 2-604 of this subtitle that is based on the information.

  (3) The State, through the Attorney General, may file a civil action under Sec. 2-603 of this subtitle based on the public disclosure described in paragraph (1) of this subsection.

(e) The State is not liable for expenses that a person incurs in bringing an action under Sec. 2-604 of this subtitle.

(f) A person who is or was employed by the State, a local government, or any other political subdivision of the State as an auditor, investigator, attorney, financial officer, or contracting officer may not bring an action under Sec. 2-604 of this subtitle that is based on allegations or transactions that the person discovered or learned of while acting in the person's capacity as an auditor, investigator, attorney, financial officer, or contracting officer for the State, local government, or other political subdivision of the State.

#### Section 2-607

(a) A person may not take a retaliatory action against an employee, contractor, or grantee because the employee, contractor, or grantee:

  (1) Acts lawfully in furtherance of an action filed under this subtitle, including an investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this subtitle;

  (2) Discloses or threatens to disclose to a supervisor or to a public body an activity, policy, or practice of the person that the employee, contractor, or grantee reasonably believes is in violation of Sec. 2-602(a) of this subtitle or a regulation adopted under this subtitle;

  (3) Provides information to, or testifies before, a public body conducting an investigation, hearing, or inquiry into a violation of Sec. 2-602(a) of this subtitle or a regulation adopted under this subtitle that is allegedly or actually committed by the person; or

  (4) Objects to or refuses to participate in any activity, policy, or practice that the employee, contractor, or grantee reasonably believes is in violation of Sec. 2-602(a) of this subtitle or a regulation adopted under this subtitle.

(b)

  (1) An employee, contractor, or grantee may file a civil action against a person other than a supervisor in State government, an appointing authority in State government, or the head of a principal unit in State government if the person takes a retaliatory action against the employee, contractor, or grantee in violation of subsection (a) of this section.

  (2) The employee, contractor, or grantee may seek in the civil action:

    (i) An injunction to restrain a continuing violation of subsection (a) of this section;

    (ii) Reinstatement to the same seniority status held before the retaliatory action;

    (iii) Reinstatement of full fringe benefits and seniority rights;

    (iv) Two times the amount of lost wages, benefits, and other remuneration, including any interest accumulated;

    (v) Payment by the person of reasonable costs and attorney's fees;

    (vi) Punitive damages;

    (vii) An assessment of a civil penalty:

      (1) Not exceeding $1,000 for the first violation; and

      (2) Not exceeding $5,000 for each subsequent violation; and

    (viii) Any other relief necessary to make the employee, contractor, or grantee whole.

  (3) The remedies provided under this section do not diminish or affect the rights, privileges, or remedies available to the employee, contractor, or grantee under:

    (i) Any other federal or State statute or regulation; or

    (ii) Any collective bargaining agreement or employee contract.

(c) This section does not apply to an employee as defined in Sec. 1-501 of the Health Occupations Article or a State employee.

(d)

  (1) An employee as defined in Sec. 1-501 of the Health Occupations Article who is subject to retaliatory action in violation of subsection (a) of this section may file a civil action under Title 1, Subtitle 5 of the Health Occupations Article.

  (2) A State employee who is subject to retaliatory action in violation of subsection (a) of this section may file a complaint under Title 5, Subtitle 3 of the State Personnel and Pensions Article.

#### Section 2-608

An employer shall:

(1) Conspicuously display notices of the protections provided to and obligations required of its employees under this subtitle; and

(2) Use any appropriate means to inform its employees of the protections and obligations provided under this subtitle.

#### Section 2-609

(a) A civil action filed under this subtitle may not be filed after the later of:

  (1) 6 years after the date on which the underlying violation of Sec. 2-602(a) of this subtitle occurred; or

  (2) 3 years after the date when facts material to the right of action are known by the relator, the State's Inspector General, or the Director of the State's Medicaid Fraud Control Unit or reasonably should have been known, but in no event more than 10 years after the date on which the underlying violation of Sec. 2-602(a) of this subtitle is committed.

(b) A civil action may be filed under this subtitle for activity that occurred prior to October 1, 2010, if the limitations period under subsection (a) of this section has not lapsed.

(c) If the State elects to intervene and proceed with an action brought under this subtitle, the State, through the Office of the Attorney General, may:

  (1) File its own complaint; or

  (2) Amend the complaint of the person who brought the action to clarify, add detail to the complaint, or add additional claims to the complaint.

(d) To the extent that the claim of the State arises out of the conduct, transactions, or occurrences set forth, or attempted to be set forth by a person, a State pleading relates back to the filing date of the complaint of the person who originally brought the action.

(e) In an action filed under this subtitle, all essential elements of the cause of action, including damages, shall be proven by a preponderance of the evidence.

(f) Notwithstanding any other provision of law or rule of procedure or evidence in the Maryland Rules, a final judgment rendered in favor of the State in any criminal proceeding charging fraud or false statements, whether on a verdict after trial or on a plea of guilty or nolo contendere, shall stop the defendant from denying the essential elements of the offense in any action filed under this subtitle that involves the same act, transaction, or occurrence as in the criminal proceeding.

#### Section 2-610

(a) Any remedy provided under this subtitle is in addition to any other appropriate legal or equitable relief provided under any other applicable State or federal statute or regulation.

(b)

  (1) The State shall make all reasonable efforts to coordinate any investigation of an alleged violation under this subtitle with any investigation conducted by the federal government involving the same violation.

  (2) The State's objective shall be to avoid unnecessary duplication of effort on the part of the person alleged to have committed the violation and to minimize the burden of the investigation on the person.

(c)

  (1) Except as provided under paragraph (2) of this subsection, the Comptroller shall deposit any civil penalty or damages collected under this subtitle in the General Fund of the State.

  (2)

    (i) If a violation of this subtitle affects any of the following funds, the Comptroller shall deposit any civil penalty or damages collected by the State under this title into the affected fund:

      (1) A fund that is not subject to Sec. 7-302 of the State Finance and Procurement Article;

      (2) A special fund requiring the reversion of appropriated funds to the special fund under Sec. 7-304 of the State Finance and Procurement Article;

      (3) A fund under the jurisdiction of the Board of Trustees for the State Retirement and Pension System; or

      (4) A fund under the jurisdiction of the State Employee and Retiree Health and Welfare Benefits Program.

    (ii) If more than one fund is affected by a violation of this subtitle, the Comptroller shall deposit any civil penalty or damages collected by the State into the appropriate fund or the General Fund of the State on a pro rata basis.

(d) The Department or the Inspector General of the Department may adopt regulations to carry out the provisions of this subtitle.

#### Section 2-611

(a) Beginning October 1, 2010, the Inspector General of the Department and the Director of the Medicaid Fraud Control Unit in the Office of the Attorney General shall report annually to the General Assembly, in accordance with Sec. 2-1257 of the State Government Article, the following information for the previous fiscal year:

  (1) The number of civil actions filed under this subtitle;

  (2) The number of civil actions under this subtitle in which a judgment was entered, whether by settlement or adjudication; and

  (3) The number of claims made by the State based on alleged violations of Sec. 2-602(a) of this subtitle that are settled without the filing of a civil action under this subtitle.

(b) Unless the action is under seal in accordance with Sec. 2-604 of this subtitle, for each civil action reported under subsection (a)(1) or (2) of this section, the report shall state:

  (1) Whether the action was filed by the State or by a person on behalf of the State and, if filed by a person, whether the State intervened and proceeded with the action;

  (2) The name of the defendant and the following information about the defendant:

    (i) The number of employees and any other data relevant to the size of the defendant;

    (ii) The amount of payments made to the defendant in the year prior to the filing of the action from State health plans and, to the extent known by the Inspector General and the Medicaid Fraud Control Unit, from other sources; and

    (iii) Whether the defendant is a minority-owned business enterprise as defined by Sec. 14-301 of the State Finance and Procurement Article;

  (3) A description of the violation or alleged violation of Sec. 2-602 of this subtitle; and

  (4) The amount sought in the action and, if applicable, the amount for which the defendant is liable under a settlement agreement or court order.

(c) For each claim reported under subsection (a)(3) of this section, the report shall state:

  (1) A description of the violation or alleged violation of Sec. 2-602 of this subtitle;

  (2) The resolution of the claim;

  (3) The amount, if any, the person against whom the claim was made agreed to pay in settlement of the claim; and

  (4) The amount, if any, collected by the State.

### Subtitle 7. Use of Extrapolation in Recovery of Health Claim Overpayments

#### Section 2-701

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

(b) "Claim" has the meaning stated in Sec. 2-501 of this title.

(c) "Extrapolation" means the process of estimating an unknown value by projecting, with a calculated precision or margin of error, the results of the review of a sample to the universe from which the sample was drawn using a statistically valid sampling methodology.

(d) "Federal government" means an agency of the United States government or a contractor retained by the agency of the United States government.

(e) "Overpayment" means a payment that:

  (1) Is made by the Department to a provider for services or goods for which the provider submitted a claim to the Department;

  (2) Is found to be incorrect; and

  (3) Results in a payment greater than that to which the provider is entitled.

(f) "Program" has the meaning stated in Sec. 2-501 of this title.

(g) "Provider" has the meaning stated in Sec. 2-501 of this title.

(h) "Statistically valid sampling methodology" means a methodology used for extrapolation that has a confidence level of 90% or greater and is validated by a statistician who possesses at least a master's degree in statistics.

(i) "Universe" means a defined population of claims submitted by a provider to the Department and paid to the provider by the Department during a specified time period.

#### Section 2-702

(a) Subject to the requirements of this subtitle, the Inspector General, or a contractor or an agent acting on behalf of the Inspector General, may use extrapolation during an audit to recover an overpayment from a provider if:

  (1) The federal government has also conducted an audit of the program for overpayment; and

  (2) The monetary recovery amount determined to be due by the program to the federal government is based on the federal government's use of extrapolation.

(b) An audit conducted by the Inspector General or a contractor or agent acting on behalf of the Inspector General under subsection (a) of this section shall be limited to the scope of the federal audit, including claims for the same audit time period and the same type of claims.

#### Section 2-703

(a) On a finding of an overpayment to a provider, the Inspector General may not use extrapolation unless there is a determination of a sustained or high level of payment error, as defined by regulation.

(b) When using extrapolation to determine an overpayment, the sample to be used may not include claims:

  (1) In which the alleged overpayment would have no fiscal impact on the entire sample;

  (2) That were submitted in accordance with the Department's, Inspector General's, or program's directives, policies, guidelines, or regulations; or

  (3) That are the result of an unintentional overlap in services among unrelated providers caused by circumstances beyond the control of the provider that is subject to the audit, in which case the Inspector General may recover the original overpayment.

#### Section 2-704

(a) The Inspector General or a contractor or an agent of the Inspector General that conducts an audit under this subtitle in which extrapolation may be used shall:

  (1) Perform the audit in accordance with a methodology used by the federal government or conducted in accordance with Generally Accepted Auditing Standards (GAAS) and the Statement on Accounting Standards (SAS);

  (2) Use a statistically valid sampling methodology; and

  (3) Meet the following qualifications:

    (i) Have at least 3 years of auditing experience;

    (ii) Have experience in the procedural coding program used for the claim;

    (iii) Be familiar, either independently or through training by the provider, with the format and content of paper and electronic medical records and claim forms used by the provider; and

    (iv) Have general knowledge of the particular health care item or service that is the subject of the audit and the program rules that govern the health care item or service at the time the item or service was provided.

(b)

  (1) If the medical necessity of the claim is the subject of the audit, the entity that conducts the audit shall include as part of the audit team an individual licensed in the same health occupation as the provider.

  (2) The individual included in the audit team under paragraph (1) of this subsection shall have significant knowledge of the audited procedure but is not required to be in the same specialty or practice area as the audited provider.

#### Section 2-705

(a) Not less than 15 calendar days before commencement of an audit by the Inspector General under this subtitle, the Inspector General shall give to the provider written notice of the audit, including:

  (1) The statistically valid sampling methodology to be used;

  (2) The name, contact information, and credentials of each individual conducting the audit, including the individual validating the methodology;

  (3) The audit location, including whether the audit will be conducted on-site at the location of the provider or through record submission; and

  (4) The manner in which the information requested must be submitted.

(b)

  (1) Except in cases where the Inspector General refers the audit findings and conclusions to the Office of the Attorney General Medicaid Fraud Control Unit or other applicable law enforcement agency, the Inspector General shall, on completion of the audit, conduct an exit conference with the provider that is the subject of the audit.

  (2) During the exit conference, the Inspector General shall:

    (i) Present the provider with the audit draft written findings and conclusions and the estimated amount of recovery due as a result of overpayment to the provider; and

    (ii) Give the provider the following information in writing:

      (1) A clear description of the universe from which the sample was drawn;

      (2) The sample size and the method used to select the sample;

      (3) The formulas and calculation procedures used to determine the amount to be recovered;

      (4) The list of claims that were reviewed;

      (5) A description of each claim, noting the errors that resulted in an overpayment; and

      (6) A specific list of the regulations, statutes, and transmittals on which the Inspector General relied in determining that the claim was improper.

  (3)

    (i) A provider may challenge the draft findings and conclusions within 30 days after the exit conference unless, because of the size and scope of the audit, the provider:

      (1) Has negotiated a longer period with the Inspector General through a mutual good faith process; and

      (2) Has submitted additional information regarding the claims to the Inspector General.

    (ii) The additional information submitted under subparagraph (i) of this paragraph may include evidence showing that:

      (1) The claims used in the sample were either paid properly or paid in accordance with Sec. 2-703 of this subtitle; or

      (2) The audit does not meet applicable requirements or reach valid findings and conclusions.

  (4) Failure to challenge the draft findings and conclusions contained in the preliminary report does not preclude a provider from appealing the final report and recovery letter under subsection (d) of this section.

(c)

  (1) The Inspector General shall review any additional documentation submitted by the provider under subsection (b) of this section or presented at any time during the audit.

  (2) After review of any additional documentation submitted by the provider, the Inspector General shall, when appropriate, recalculate the error rate used in extrapolation and issue its final report and recovery letter.

  (3) The final report and recovery letter shall state that the provider has 30 days after the date of the recovery letter to appeal the findings in the report in accordance with Sec. 2-207 of this title, Title 10, Subtitle 2 of the State Government Article, and COMAR 10.01.03 and 28.02.01.

(d)

  (1) On appeal, the provider may present evidence of a second audit using the same sampling methodology but based on a different sample of claims identified and produced by the Inspector General.

  (2) On request of the provider, the Inspector General shall provide a new sample of claims to the provider within 30 days after receipt of the request.

  (3) The provider shall have 60 days after receipt of the new sample to conduct the audit and provide the results to the Inspector General, unless the provider has negotiated a longer period with the Inspector General.

  (4) The Inspector General may review the provider's audit for compliance with the requirements of this subtitle.

(e) The recovery shall be stayed until completion of the administrative appeal process.

(f) This subtitle does not limit a provider from challenging the accuracy of the Inspector General's audit, including:

  (1) The statistical and extrapolation methodology used in the audit;

  (2) The credentials of any individual who performed or reviewed the audit; or

  (3) Any other reasonable basis.

(g)

  (1) The Department may adopt the findings of the federal government, including the error rate, if the federal government conducts an audit that:

    (i) Concludes that a provider received an overpayment;

    (ii) Uses an error rate that is specific to a single provider;

    (iii) Derives the overpayment from a statistically valid sample; and

    (iv) Provides all supporting documentation of the audit.

  (2) If the Department adopts the findings of the federal government, the Department shall provide to the provider a copy of the federal government's audit report and supporting documentation with the preliminary recovery letter stating the amount due to the State and the provider's appeal rights.

  (3)

    (i) Within 30 days after receipt of the preliminary recovery letter, the provider may challenge the draft findings and conclusions unless, due to the size and scope of the audit, the provider:

      (1) Has negotiated a longer period with the Inspector General through a mutual good faith process; and

      (2) Has submitted additional information to the Inspector General.

    (ii) The additional information submitted under subparagraph (i) of this paragraph may include evidence showing that:

      (1) The claims used in the sample were either paid properly or paid in accordance with Sec. 2-703 of this subtitle; or

      (2) The audit did not meet applicable requirements or reach valid findings and conclusions.

  (4) Failure to challenge the draft findings and conclusions contained in the preliminary recovery letter does not preclude a provider from appealing the final report and recovery letter under subsection (d) of this section.

(h) This subtitle does not apply to audits conducted in response to federal audits initiated before October 1, 2016.

### Subtitle 8. Prohibition Against Price Gouging for Essential Off-Patent or Generic Drugs

#### Section 2-801

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

(b)

  (1) "Essential off-patent or generic drug" means any prescription drug:

    (i) For which all exclusive marketing rights, if any, granted under the Federal Food, Drug, and Cosmetic Act, Sec. 351 of the federal Public Health Service Act, and federal patent law have expired;

    (ii)

      (1) That appears on the Model List of Essential Medicines most recently adopted by the World Health Organization; or

      (2) That has been designated by the Secretary as an essential medicine due to its efficacy in treating a life-threatening health condition or a chronic health condition that substantially impairs an individual's ability to engage in activities of daily living;

    (iii) That is actively manufactured and marketed for sale in the United States by three or fewer manufacturers; and

    (iv) That is made available for sale in the State.

  (2) "Essential off-patent or generic drug" includes any drug-device combination product used for the delivery of a drug for which all exclusive marketing rights, if any, granted under the Federal Food, Drug, and Cosmetic Act, Sec. 351 of the federal Public Health Service Act, and federal patent law have expired.

(c) "Price gouging" means an unconscionable increase in the price of a prescription drug.

(d) "State health plan" has the meaning stated in Sec. 2-601 of this title.

(e) "State health program" has the meaning stated in Sec. 2-601 of this title.

(f) "Unconscionable increase" means an increase in the price of a prescription drug that:

  (1) Is excessive and not justified by the cost of producing the drug or the cost of appropriate expansion of access to the drug to promote public health; and

  (2) Results in consumers for whom the drug has been prescribed having no meaningful choice about whether to purchase the drug at an excessive price because of:

    (i) The importance of the drug to their health; and

    (ii) Insufficient competition in the market for the drug.

(g) "Wholesale acquisition cost" has the meaning stated in 42 U.S.C. Sec. 1395w-3a.

#### Section 2-802

(a) A manufacturer or wholesale distributor may not engage in price gouging in the sale of an essential off-patent or generic drug.

(b) It is not a violation of subsection (a) of this section for a wholesale distributor to increase the price of an essential off-patent or generic drug if the price increase is directly attributable to additional costs for the drug imposed on the wholesale distributor by the manufacturer of the drug.

#### Section 2-803

(a) The Maryland Medical Assistance Program may notify the Attorney General of any increase in the price of an essential off-patent or generic drug when:

  (1) The price increase, by itself or in combination with other price increases:

    (i) Would result in an increase of 50% or more in the wholesale acquisition cost of the drug within the preceding 1-year period; or

    (ii) Would result in an increase of 50% or more in the price paid by the Maryland Medical Assistance Program for the drug within the preceding 1-year period; and

  (2)

    (i) A 30-day supply of the maximum recommended dosage of the drug for any indication, according to the label for the drug approved under the Federal Food, Drug, and Cosmetic Act, would cost more than $80 at the drug's wholesale acquisition cost;

    (ii) A full course of treatment with the drug, according to the label for the drug approved under the Federal Food, Drug, and Cosmetic Act, would cost more than $80 at the drug's wholesale acquisition cost; or

    (iii) If the drug is made available to consumers only in quantities that do not correspond to a 30-day supply, a full course of treatment, or a single dose, it would cost more than $80 at the drug's wholesale acquisition cost to obtain a 30-day supply or a full course of treatment.

(b) On request of the Attorney General, the manufacturer of an essential off-patent or generic drug identified in a notice under subsection (a) of this section, within 45 days after the request, shall submit a statement to the Attorney General:

  (1)

    (i) Itemizing the components of the cost of producing the drug; and

    (ii) Identifying the circumstances and timing of any increase in materials or manufacturing costs that caused any increase in the price of the drug within the 1-year period preceding the date of the price increase;

  (2)

    (i) Identifying the circumstances and timing of any expenditures made by the manufacturer to expand access to the drug; and

    (ii) Explaining any improvement in public health associated with those expenditures; and

  (3) Providing any other information that the manufacturer believes to be relevant to a determination of whether a violation of this subtitle has occurred.

(c) The Attorney General may require a manufacturer or a wholesale distributor to produce any records or other documents that may be relevant to a determination of whether a violation of this subtitle has occurred.

(d) On petition of the Attorney General and subject to subsection (e) of this section, a circuit court may issue an order:

  (1) Compelling a manufacturer or a wholesale distributor:

    (i) To provide the statement required under subsection (b) of this section; and

    (ii) To produce specific records or other documents requested by the Attorney General under subsection (c) of this section that may be relevant to a determination of whether a violation of this subtitle has occurred;

  (2) Restraining or enjoining a violation of this subtitle;

  (3) Restoring to any consumer, including a third party payor, any money acquired as a result of a price increase that violates this subtitle;

  (4) Requiring a manufacturer that has engaged in price gouging in the sale of an essential off-patent or generic drug to make the drug available to participants in any State health plan or State health program for a period of up to 1 year at the price at which the drug was made available to participants in the State health plan or State health program immediately prior to the manufacturer's violation of this subtitle; and

  (5) Imposing a civil penalty of up to $10,000 for each violation of this subtitle.

(e) The Attorney General may not bring an action for a remedy under subsection (d)(2) through (5) of this section unless the Attorney General has provided the manufacturer or wholesale distributor an opportunity to meet with the Attorney General to offer a justification for the increase in the price of the essential off-patent or generic drug.

(f) Any information provided by a manufacturer or a wholesale distributor to the Attorney General under subsections (b) and (c) of this section shall be considered confidential commercial information for purposes of Sec. 4-335 of the General Provisions Article unless the confidentiality of the information is waived by the manufacturer or wholesale distributor.

(g) In any action brought by the Attorney General under subsection (d) of this section, a person who is alleged to have violated a requirement of this subtitle may not assert as a defense that the person did not deal directly with a consumer residing in the State.

### Subtitle 10. Prohibition on Discrimination

#### Section 2-1001

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

(b) "Commission" means the Commission on Civil Rights.

(c) "Gender identity" has the meaning stated in Sec. 20-101 of the State Government Article.

(d) "Sexual orientation" has the meaning stated in Sec. 20-101 of the State Government Article.

(e) "Unit of the Department" means a unit described under Sec. 2-106 of this title.

#### Section 2-1002

It is the policy of the State to:

(1) Provide affordable health care throughout the State to all regardless of race, color, religion, sex, age, national origin, marital status, sexual orientation, gender identity, or disability; and

(2) Prohibit discrimination with respect to the provision of health care by any person, in order to protect and ensure the peace, health, safety, prosperity, and general welfare of all.

#### Section 2-1003

(a)

  (1) Notwithstanding any other law and except as provided in paragraph (2) of this subsection, the Secretary or a unit of the Department has exclusive jurisdiction to enforce by administrative action the laws of the State as provided for under this article and the Health Occupations Article.

  (2) The Commission on Civil Rights has concurrent jurisdiction with the Secretary or a unit of the Department over alleged discrimination on the basis of race, color, religion, sex, age, national origin, marital status, sexual orientation, gender identity, or disability.

(b) When the Secretary or a unit of the Department has exclusive jurisdiction under subsection (a) of this section, the Commission may:

  (1) Refer complaints about discriminatory practices to the Secretary or the unit of the Department;

  (2) Appear before the Secretary or the unit of the Department as a party at a hearing about discriminatory practices;

  (3) Make recommendations about discriminatory practices to the Secretary or the unit of the Department;

  (4) Represent a complainant in a proceeding authorized under this article or the Health Occupations Article that is related to discriminatory practices; or

  (5) Appeal as a party aggrieved by an order or decision of the Secretary or the unit of the Department in a proceeding authorized under this article or the Health Occupations Article that is related to discriminatory practices.

(c) The Secretary or a unit of the Department shall notify the Commission of any hearing scheduled on a complaint about alleged discriminatory practices.

(d) On request of the Commission and unless the complainant objects, the Secretary or a unit of the Department shall give the Commission all information regarding any complaint alleging discriminatory practices received by the Secretary or unit of the Department.

(e) The Secretary or a unit of the Department and the Commission shall set guidelines for determining when allegations of discriminatory practices in a complaint are sufficient to warrant a hearing.

#### Section 2-1004

(a) This section does not prohibit a person that is licensed or otherwise regulated by the Department or a unit of the Department from refusing, withholding from, or denying any person services for failure to conform to the usual and regular requirements, standards, and regulations imposed by the licensed or regulated person, unless the refusal, withholding, or denial is based on discrimination on the grounds of race, color, religion, sex, age, national origin, marital status, sexual orientation, gender identity, or disability.

(b) A person that is licensed or otherwise regulated by the Department or a unit in the Department may not discriminate against any person because of the person's race, color, religion, sex, age, national origin, marital status, sexual orientation, gender identity, or disability.

### Subtitle 11

#### Section 2-1101

In this subtitle, "Corps" means the Maryland Medical Reserve Corps.

#### Section 2-1102

(a) The Department shall organize the Maryland Medical Reserve Corps.

(b) The purpose of the Corps is to provide a statewide volunteer network integrated into community emergency systems to facilitate a coordinated approach to volunteer management.

(c) The Corps shall include clinical and nonclinical personnel capable of assisting during crises that strain the health care system or public health system, including public health emergencies, disease outbreaks, and natural disasters.

#### Section 2-1103

The Department shall:

(1) Maintain an efficient and modern electronic registration system to register and track volunteers for the Corps; and

(2) Designate a Public Health Emergency Surge Coordinator among its staff to coordinate and plan improvements to the Corps.

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Md. Code Ann., Health-Gen. (as displayed at mgaleg.maryland.gov, October 16, 2026)