# Health - General (GHG)

## Title 7. Developmental Disabilities Law

### Subtitle 3. State Plan

#### Section 7-301

In this subtitle, "State plan" means the plan established by the Secretary to provide services to individuals eligible for services under this title.

#### Section 7-302

The purpose of the State plan is to identify the populations in need of services, the current state of needed services, and the priorities for new services, including the reallocation of resources.

#### Section 7-303

(a) Through the Developmental Disabilities Administration, the Secretary shall establish and carry out a State plan to provide the following training and habilitation services:

  (1) For individuals with developmental disability:

    (i) Day habilitation services;

    (ii) Family support services;

    (iii) Individual support services;

    (iv) Prevention and early detection of disabilities;

    (v) Residential services in community-based settings;

    (vi) Services coordination;

    (vii) Services in State residential centers;

    (viii) Services to insure protection of the individual rights and liberties of individuals with developmental disability;

    (ix) Vocational services;

    (x) Community supported living arrangements services; and

    (xi) Any other services that may be necessary to permit delivery of the services under this subsection.

  (2) For individuals without developmental disability, but who meet the eligibility requirements of Sec. 7-403 of this title, individual support services.

(b) The Secretary periodically shall revise the State plan, but not less than every 2 years, to reflect changes in need, current available services, priorities, and any other changes that may affect the need for or scope of care and services.

#### Section 7-305

Through the State plan, the Secretary shall:

(1) Provide or encourage by consultation, cooperation, contract, or direct operation, services and facilities that are needed for the early detection, accurate evaluation, proper referral, protection of individual rights and liberties, and the optimal care and development of individuals with developmental disability who need treatment or services; and

(2) Encourage coordination of services with other public and private agencies that have responsibility for serving individuals with developmental disability.

#### Section 7-306

The Secretary shall implement the State plan through:

(1) The provision of direct services;

(2) The purchase of services; or

(3) Other appropriate means.

#### Section 7-306.1

** IN EFFECT UNTIL CONTINGENCY MET PER CHAPTER 648 OF 2014**

(a) The Administration shall develop and implement a funding system for the distribution of State funds to private providers that are under contract with the Administration to provide community-based services to individuals with disability in accordance with the State plan.

(b) Funds received for services that are fee-for-service or that have rates set by regulation shall be subject to recovery by the Administration only for the following purposes:

  (1) Client attendance;

  (2) Client fees; or

  (3) Sanctions allowed through regulations.

(c)

  (1) Under the funding system developed under subsection (a) of this section, the Administration shall notify each private provider at least 30 days before the beginning of the fiscal year of the billing rate or amount of funds to be paid to the provider for the provision of community-based services to an individual with developmental disability or a group of individuals with developmental disability for the coming fiscal year.

  (2) For rates that are set in regulation, the Administration shall include the cost centers used to determine the funding amount of each rate.

  (3)

    (i) A private provider may request an administrative resolution of a billing rate set under paragraph (1) of this subsection except for rates set in regulation.

    (ii) Within 60 days after receipt of the provider's request, the Administration shall make a decision on the request for an administrative resolution.

    (iii) If an administrative resolution cannot be reached between the provider and the Administration, the provider may request an evidentiary hearing or an oral hearing in accordance with regulations of the Department.

(d) Subject to the provisions of subsections (e), (f), and (g) of this section, the Administration shall provide payment to private providers for the services provided from the funds designated in subsection (c) of this section in accordance with the following payment schedule:

  (1) On or before the third business day of the fiscal quarter beginning July 1, 33% of the total annual amount to be paid to the provider;

  (2) On or before the third business day of the fiscal quarter beginning October 1, 25% of the total annual amount to be paid to the provider;

  (3) On or before the third business day of the fiscal quarter beginning January 1, 25% of the total annual amount to be paid to the provider; and

  (4) On or before the third business day of the fiscal quarter beginning April 1, 17% of the total annual amount to be paid to the provider.

(e) The Administration may deviate from the payment schedule provided under subsection (d) of this section for any provider:

  (1) That is reimbursed through the fee payment system and fails to submit properly completed program attendance reports within 15 days of the beginning of each month;

  (2) That provides services under the medical assistance program and fails to submit the designated forms used by the medical assistance program to claim federal fund participation within 30 days after the end of each month; or

  (3) That fails to submit a cost report for rate-based payment systems or wage surveys as required under subsection (k) of this section.

(f) A deviation from the payment schedule as provided under subsection (e) of this section may occur only if the Administration has:

  (1) Advised the provider that:

    (i) An attendance report which has been submitted on time is in need of correction;

    (ii) A designated medical assistance form which has been submitted on time is in need of correction;

    (iii) A cost report for rate-based payment systems has not been submitted within 6 months from the close of the fiscal year or, if submitted, is in need of correction; or

    (iv) A wage survey requested under subsection (l) of this section has not been submitted by the later of 60 days from the date of receipt of the request or within 60 days after the last day of the pay period for which the data was requested or, if submitted, is in need of correction;

  (2) Allowed the provider at least 5 working days to submit, resubmit or correct the report or form; and

  (3) Not in any way contributed to the delay of or error on a report or form.

(g) The amount of a reduction of payments to a provider pursuant to subsections (e) and (f) of this section may not:

  (1) Exceed the amount of lost federal revenue attributable to the delay or error; or

  (2) In the case of cost reports for rate-based payment systems or wage surveys, exceed $500 per day per report for each day the report is not submitted past the given due date or corrected.

(h) The Administration:

  (1) Shall place sufficient funds in a specially designated account with the Office of the Comptroller to meet its financial obligations under subsection (d) of this section;

  (2) Shall disburse funds from the account in accordance with the payment schedule provided in subsection (d) of this section;

  (3) May not use the funds in the account for any other purpose except for the purpose of reimbursing private providers for the provision of community-based services to individuals with developmental disability;

  (4) Within 1 year after receipt of a private provider's year-end report and cost report for rate-based payment systems, shall reconcile the report and shall provide the provider with a written approval of the report or a written explanation of any items in dispute; and

  (5) Shall conduct an audit of each private provider every 4 years.

(i) The Administration shall accept as final the private provider's year-end report and cost report for rate-based payment systems if:

  (1) The Administration fails to provide written approval or a written explanation of any items in dispute within 1 year after receiving the report; or

  (2) The Administration fails to reconcile the year-end report and cost report for rate-based payment systems within 1 year after receiving the report.

(j) If the Administration fails to conduct an audit of a private provider as required in subsection (h)(5) of this section, the Administration may not audit the private provider for any fiscal year that began more than 48 months before the Administration's notification of audit, unless the Administration suspects fraud or misappropriation of funds.

(k) Private providers shall provide the year-end report to the Administration no later than 6 months after the end of the State fiscal year.

(l) Private providers shall submit to the Administration:

  (1) Cost reports for rate-based payment systems no later than 6 months after the end of the State fiscal year; and

  (2) Wage surveys by the later of:

    (i) 60 days after the last day of the pay period for which the data is requested; or

    (ii) 60 days after receipt of a request from the Administration for wage survey information.

#### Section 7-306.2

(a) The Administration shall:

  (1) Conduct an independent cost-driven, rate-setting study to set provider rates for community-based services that includes a rate analysis and an impact study that considers the actual cost of providing community-based services, including:

    (i) The cost of transportation across all service types;

    (ii) Appropriate wage and benefit levels for direct support and supervisory staff; and

    (iii) Rates that incorporate the fiscal impact of absence days;

  (2) Develop and implement a plan incorporating the findings of the rate-setting study conducted under item (1) of this subsection, including projected costs of implementation and recommendations to address any potential shortfall in funding;

  (3) Develop a strategy for assessing the needs of an individual receiving services that conforms with the findings of the rate-setting study conducted under item (1) of this subsection;

  (4) Provide for adequate working capital payments to providers;

  (5) Develop a sound fiscal billing and payment system that is tested for adequacy and efficiency in payment of providers;

  (6) Establish a payment schedule that ensures the timely and efficient reimbursement of providers for services provided; and

  (7) Consult with stakeholders, including providers and individuals receiving services, in conducting the rate-setting study and developing the payment system required by this subsection.

(b) The Administration, on or before September 30, 2017, shall complete the study required under subsection (a) of this section.

(c) The Administration shall adopt regulations to implement the payment system required by this section.

#### Section 7-306.3

(a)

  (1) Beginning in fiscal 2014, the wage survey required under Sec. 7-306.1 of this subtitle shall be submitted by a community provider in a format that:

    (i) Meets the requirements of this subsection; and

    (ii) Is approved by the Department.

  (2) The wage survey shall:

    (i) Allow the Department to accurately assess the level of wages and benefits paid by a community provider to direct support employees who provide services funded by the Administration;

    (ii) At a minimum, include:

      (1) The starting wage and the average wage paid by the community provider to direct support employees;

      (2) The expenditures made annually by the community provider for direct support employee wages;

      (3) The costs and expenditures for mandatory and voluntary fringe benefits; and

      (4) The average tenure and turnover of direct support employees; and

    (iii) Include an attestation by an independent certified public accountant that the data in the wage survey is accurate.

  (3) At the request of the Department, a community provider shall make available to the Department individualized payroll information for each direct support employee of the community provider.

(b)

  (1)

    (i) Except as provided in subparagraph (ii) of this paragraph, this subsection applies in fiscal year 2016 and each fiscal year thereafter before the earlier of:

      (1) The implementation of the payment system required under Sec. 7-306.2 of this subtitle; or

      (2) The end of fiscal year 2019.

    (ii) This subsection does not apply in any fiscal year in which the rate increase for community service providers is less than 3.0% over the funding provided in the legislative appropriation for Object 08 Contractual Services Program M00M01.02 Community Services in the prior fiscal year.

  (2) The percentage of a community provider's total reported operating expenses, excluding interest on capital and other capital expenses, that is spent on direct support employee salaries, wages, and fringe benefits for a fiscal year, as reported to the Department by the provider in its fiscal year cost report data form, may not be less than the percentage of the community provider's total reported operating expenses spent on direct support employee salaries, wages, and fringe benefits for the last fiscal year in which the rate increase for community service providers is less than 3.0% over the funding provided in the legislative appropriation for Object 08 Contractual Services in Program M00M01.02 Community Services in the prior fiscal year.

  (3) If the Department determines that the proportion of a community provider's expenses for direct support employee salaries, wages, and fringe benefits for a fiscal year falls below the level required under paragraph (2) of this subsection, the Department shall notify the community provider of the determination in writing.

  (4) A community provider shall have 45 days after receiving notice of the determination under paragraph (3) of this subsection to:

    (i) Contest the determination;

    (ii) Provide information to the Department demonstrating mitigating circumstances justifying the community provider's noncompliance with paragraph (2) of this subsection, which may include proof that the average wage paid to direct support employees by the community provider increased in proportion to the rate increase to the community provider for the fiscal year; or

    (iii) Submit a plan of correction to the Department.

  (5) The Department shall notify a community provider in writing of its final determination after affording the community provider the opportunity to contest the determination, demonstrate mitigating circumstances, or submit a plan of correction under paragraph (4) of this subsection.

  (6)

    (i) The Department shall recoup funds from a community provider that have not been expended as required under paragraph (2) of this subsection through a reconciliation process if:

      (1) A community provider fails to respond to a determination of the Department within the time provided under paragraph (4) of this subsection;

      (2) The Department does not find mitigating circumstances; or

      (3) The Department does not accept a plan of correction submitted by the community provider.

    (ii) The amount of funds recouped by the Department under this paragraph shall be the difference between the actual funds spent by the community provider on direct support employee salaries, wages, and fringe benefits during the fiscal year at issue and the amount of funds that the community provider was required to spend on direct support employee salaries, wages, and fringe benefits under paragraph (2) of this subsection.

  (7) The Department may contract with an independent consultant to implement this subsection.

(c)

  (1) On or before December 1, 2015, the Department shall submit, in accordance with Sec. 2-1257 of the State Government Article, to the Senate Finance Committee, the Senate Budget and Taxation Committee, the House Appropriations Committee, and the House Health and Government Operations Committee a report summarizing the range of total funding spent by community providers on direct support employee salaries, wages, and fringe benefits as a percentage of total reported operating expenses, excluding interest on capital and other expenses, for fiscal year 2014.

  (2) The report required under this subsection shall include an analysis of data to explain any significant outliers in spending patterns among community providers.

#### Section 7-307

(a)

  (1) In this section the following words have the meanings indicated.

  (2) "Community direct service worker" means an employee of a community provider that provides treatment or services to developmentally disabled individuals.

  (3) "Community provider" means a community-based agency or program funded by the Administration to serve individuals with developmental disabilities.

  (4) "Rate" means the reimbursement rate paid by the Department to a community provider from the State General Fund, Maryland Medical Assistance Program funds, other State or federal funds, or a combination of funds.

(b) Notwithstanding the provisions of this title or any other provision of law, the Department shall reimburse community providers as provided in this section.

(c) Subject to subsection (d) of this section, the Department shall increase the rate of reimbursement for community service providers each fiscal year by the amount of rate increase included in the State budget for that fiscal year.

(d)

  (1) The Governor's proposed budget for fiscal year 2019 shall include a 3.5% rate increase for community service providers over the funding provided in the legislative appropriation for Object 08 Contractual Services in Program M00M01.02 Community Services for fiscal year 2018.

  (2) The Governor's proposed budget for fiscal year 2021 shall include a 4% rate increase for community service providers over the funding provided in the legislative appropriation for Object 08 Contractual Services in Program M00M01.02 Community Services for fiscal year 2020.

  (3) The Governor's proposed budget for fiscal year 2022 shall include a 4% rate increase for community service providers over the funding provided in the legislative appropriation for Object 08 Contractual Services in Program M00M01.02 Community Services for fiscal year 2021.

  (4) The Governor's proposed budget for fiscal year 2023 shall include a 4% rate increase for community service providers over the funding provided in the legislative appropriation for Object 08 Contractual Services in Program M00M01.02 Community Services for fiscal year 2022.

  (5) The Governor's proposed budget for fiscal year 2024 shall include a 4% rate increase for community service providers over the funding provided in the legislative appropriation for Object 08 Contractual Services in Program M00M01.02 Community Services for fiscal year 2023.

(e) The Governor's proposed budget for fiscal year 2016 and thereafter for community service providers shall be presented in the same manner, including object and program information, as provided for in the fiscal year 2015 budget.

(f) A portion of the funds in subsection (e) of this section may be allocated to address the impact of an increase in the State minimum wage on wages and benefits of direct support workers employed by community providers licensed by the Developmental Disabilities Administration.

#### Section 7-308

(a) In this section, "pilot program" means the fee-for-service payment pilot program.

(b) The Department shall establish a fee-for-service payment pilot program.

(c) A provider that provides waiver program services to individuals with a developmental disability who are eligible for services under Subtitle 4 of this title may participate in the pilot program.

(d) The Department shall:

  (1) Determine and establish rates for waiver program services; and

  (2) Publish the rates for waiver program services, and any subsequent changes to those rates, in regulation.

(e)

  (1) A provider participating in the pilot program shall submit a claim for payment to the Department on a form that the Department requires.

  (2) Payment for a claim is subject to the following limitations:

    (i) Payment may not be made for a claim that is received by the Department more than 1 calendar year after the date the services were provided; and

    (ii) A claim that is not submitted within the time period required under item (i) of this paragraph may not be charged to the recipient of services.

(f) A provider may not knowingly submit to the Department:

  (1) A false or fraudulent claim for payment; or

  (2) Documentation supporting a claim that contains false information.

(g)

  (1) A provider that participates in the pilot program must complete and submit to the Department each year financial statements for each fiscal year that were audited by an independent certified public accountant.

  (2) A provider participating in the pilot program shall submit information required by the Department, on a form approved by the Department, relating to wages and benefits paid to direct support professionals.

  (3) The Department may require a provider participating in the pilot program to submit information related to the provision of services to individuals with a developmental disability as it relates to the execution of the pilot program.

(h) The Department may:

  (1) Conduct an audit of any records supporting a claim for payment of a provider participating in the pilot program; and

  (2) Recover overpayments from a provider.

(i) A provider participating in the pilot program shall comply with all applicable laws and regulations governing financial documentation, reporting, and other payment-related requirements for Medicaid providers.

#### Section 7-309

(a) The Department shall ensure that providers of and individuals who receive Administration services are not adversely impacted when using the Long Term Services and Supports software system or the Electronic Visit Verification function.

(b)

  (1) An individual receiving Administration services who receives notice from the Department that the individual has lost eligibility to receive Maryland Medical Assistance Program services may appeal the determination.

  (2) If an individual appeals a loss of eligibility within the time period required under Sec. 42 C.F.R. 431.231, Administration services for the individual shall continue uninterrupted until the outcome of the appeal is complete.

  (3) The Department shall ensure that providers of Administration services to an individual affected by a loss of eligibility are notified of the individual's loss of eligibility when notice is sent to the individual.

  (4) The Department shall ensure that providers, including coordinators of community services, have the ability to automatically exchange electronic data with the Department through an application program interface with the Department's Long Term Services and Supports software system.

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