Chapter 57. Partially Capitated Programs Authority
Regulation .01 Definitions.LinkCopy Citation
A.
In this chapter, the following terms have the meanings indicated.
B.
Terms Defined.
(1)
“Applicant” means an entity which submits an application to become a partially capitated provider.
(2)
“Capitation payment” means the sum of money paid by the Program on behalf of an enrollee on a regular periodic per capita basis for capitated services.
(3)
“Capitated services” means a service provided by a PCP or one of its subcontractors for which the Department has agreed to pay a capitation payment to the PCP.
(4)
“Department” means the Maryland Department of Health, the single State agency designated to administer the Maryland Medical Assistance Program under Title XIX of the Social Security Act, 42 U.S.C. §1396 et seq.
(5)
“Enrollee” means a recipient who has entered into an agreement to receive certain Medical Assistance services from or through a PCP.
(6)
“Medical Assistance Program” has the meaning stated in COMAR 10.09.36.01.
(7)
“Partially capitated provider (PCP)” means a public or private legal entity which is organized for the purpose of providing or arranging for the provision of medical and health-related services which meets the conditions for participation in Regulations .02 and .03 of this chapter for enrollment and which is eligible to enter into a contract with the Department to receive a capitated payment for a limited number of services.
(8)
“Program” means the Maryland Medical Assistance Program as defined in COMAR 10.09.36.01.
(9)
“Provider” means a partially capitated provider.
(10)
“Provider agreement” means the agreement between the Department and the partially capitated provider which specifies the terms of the relationship between the Department and the provider, and includes the amount of the capitation payment and the specific services to be provided for the capitation payment.
(11)
“Recipient” has the meaning stated in COMAR 10.09.36.01.
Regulation .02 Application for Qualification as a Partially Capitated Provider.LinkCopy Citation
A.
An applicant shall demonstrate to the satisfaction of the Department that it has the managerial, financial, clinical, and administrative capability to carry out the duties required by these regulations.
B.
An applicant shall submit the following documents to the Department along with a completed application form:
(1)
A narrative of the applicant's overall plan for providing and arranging for the provision of high quality services to enrollees efficiently, effectively, and economically;
(2)
A description of the organization and staff responsible for delivering health care and a copy of the applicant's organizational documents;
(3)
An annualized pro forma budget and financial plan for the operation of the organization or, at the Department's option, of the appropriate unit within the organization responsible for the operation for delivery of services pursuant to this regulation for the first 3 years of its anticipated operations which demonstrates its financial viability based on reasonable assumptions;
(4)
An annualized cash flow chart;
(5)
A statement of policy and procedures for accounting, methods of reimbursing subcontractors, and payment of emergency and out-of-area claims;
(6)
Balance sheets;
(7)
Any other financial information the Program requires;
(8)
Full and complete information at all times as to the identity of each person or corporation with an ownership or control interest in the PCP and of any subcontractor in which the applicant has a 5 percent or more ownership interest;
(9)
A detailed description of the applicant's quality assurance plan which demonstrates compliance with Regulation .07 of this chapter;
(10)
A description of a system for the receipt and prompt adjudication of complaints and grievances by enrollees which complies with Regulation .12 of this chapter;
(11)
A description of the process by which data about services provided will be collected;
(12)
Copies of all of the applicant's contracts with subcontractors;
(13)
A description of the boundaries of the geographic area or area the applicant wishes to serve; and
(14)
A copy of the applicant's marketing plan.
C.
If the applicant will be at risk for services it will not directly provide, the applicant shall identify and document a source of funds which will comprise the reserve account required by Regulation .10 of this chapter.
Regulation .03 Conditions of Participation.LinkCopy Citation
A.
A PCP shall meet the general conditions for participation as set forth in COMAR 10.09.36.03.
B.
In addition, the PCP shall:
(1)
Ensure that all of its employees, subcontractors, and employees of its subcontractors are appropriately licensed in the jurisdiction in which they are practicing;
(2)
Enter into and maintain contractual arrangements necessary to meet the medical and health needs of enrollees for which it is receiving a capitation payment, except for emergency treatment and out-of-area referrals;
(3)
Accept all Medical Assistance recipients who qualify for the PCP's services who select the PCP and who reside in the PCP's designated geographic area;
(4)
Allow each enrollee to choose his or her health professionals within the PCP to the extent possible and appropriate;
(5)
Comply with the requirements of Regulations .05 — .12 of this chapter;
(6)
Monitor the quality of the services its subcontractors render to its enrollees;
(7)
Be accessible 24 hours a day to enrollees unless the Program waives this requirement in the provider agreement;
(8)
Agree to provide services to enrollees as promptly as appropriate;
(9)
Have a marketing plan which has been approved by the Department and conduct marketing activities in accordance with that plan; and
(10)
Meet all other applicable requirements of federal and State law.
C.
In accordance with 42 CFR §434.26(b)(4), an applicant who does not come within one of the exceptions specified in 24 CFR §434.26(b) shall request from the Department a waiver of 42 CFR §434.26(a), which provides that Medicaid recipients and Medicare beneficiaries may constitute not more than 75 percent of the enrollees of a health maintenance organization or prepaid capitation plan. The Department shall pursue a waiver for good cause.
Regulation .04 Covered Services.LinkCopy Citation
Providers may be capitated for one of the following packages of services subject to the approval of the Department:
A.
Inpatient hospital services, as long as the applicant, if regulated by the Health Services Cost Review Commission, has received permission from that agency to receive capitation payments;
B.
Mental health services, including but not limited to, psychiatric inpatient treatment and community mental health outpatient services;
C.
Not more than two of the following services or groups of services:
(1)
Outpatient hospital services,
(2)
Physician services,
(3)
Laboratory and X-ray services,
(4)
Nursing facility services, EPSDT, and family planning services, and
(5)
Home health services;
D.
Any service covered by the Program other than a service specified in §A or C of this regulation;
E.
Inpatient hospital services as listed in §A of this regulation, plus one or more of the services included in §D of this regulation; or
F.
Not more than two of the services listed in §C of this regulation, plus one or more of the services included in §D of this regulation.
Regulation .05 Enrollment and Termination of Enrollment.LinkCopy Citation
A.
The Department shall determine the boundaries of the geographic area that a PCP may serve. The Department shall limit enrollment in a PCP to recipients who live in that area.
B.
The PCP is responsible for the enrollment of recipients who have chosen to enroll in the PCP.
C.
The PCP shall enter into an enrollment contract with a recipient on the form approved by the Department.
D.
The PCP shall enroll eligible recipients in the order in which the eligible recipients apply and may not discriminate on the basis of health status in its enrollment, re-enrollment, or disenrollment procedures.
E.
Termination of enrollment may be initiated by the enrollee, the enrollee's parent, guardian, or legal representative, by the PCP, or by the Department.
F.
The Department shall approve all terminations of enrollment.
Regulation .06 Marketing.LinkCopy Citation
A.
The PCP shall specify in its provider agreement the methods by which the PCP will assure the Department that its marketing plans, procedures, and materials are accurate and do not mislead, confuse, or defraud the Department or recipients.
B.
The Department shall preapprove all marketing plans, procedures, and materials.
Regulation .07 Quality Assurance.LinkCopy Citation
A PCP shall maintain an internal quality assurance system based on written policies, standards, and procedures that is in accordance with accepted medical practices and professional standards and that includes, at a minimum, the following:
A.
A comprehensive quality assurance plan which:
(1)
Addresses both the quality of clinical care and nonclinical aspects of service such as accessibility, coordination, and continuity of care,
(2)
Provides for review by physicians and other health professionals of the process followed in the provision of health services,
(3)
Provides feedback to health professionals and PCP staff regarding performance and patient results,
(4)
Objectively and systematically monitors and evaluates the quality and appropriateness of care to enrollees through quality of care studies and related activities, and
(5)
Provides for continuous performance of the activities, including tracking of issues over time;
B.
A comprehensive utilization management program monitored by the PCP's governing body; and
C.
A credentialing process for determining whether physicians and other health professionals who are under contract to the PCP are licensed and qualified to perform their services.
Regulation .08 Record Keeping and Reports.LinkCopy Citation
A.
The PCP shall have an effective procedure for reporting to the Department the following information:
(1)
The cost of operations;
(2)
Patterns of utilization;
(3)
The health status of enrollees;
(4)
Information demonstrating that the PCP has a fiscally sound operation; and
(5)
Complaints and grievances made by enrollees.
B.
The PCP shall collect and submit to the Department service specific encounter data by service type in the format and at the frequency designated by the Department.
C.
The PCP shall maintain adequate records to document that the services were delivered.
D.
The PCP shall prepare and submit to the Department quarterly financial and quality assurance reports as specified by the Department.
Regulation .09 Confidentiality.LinkCopy Citation
Subject to the requirements of 42 CFR 431F (1994), the PCP and its subcontractors may not release or disclose any information concerning an enrollee except with the written permission of the:
A.
Department;
B.
Enrollee; or
C.
Enrollee's attorney, legal representative, or guardian.
Regulation .10 Financial Solvency.LinkCopy Citation
A.
The PCP shall include in its provider agreement a clause that the PCP will hold harmless both the Department and its enrollees from any liability for payment for the legal obligations of the PCP.
B.
The PCP shall give the Department access to the PCP's financial records at reasonable intervals in order to monitor the PCP's financial solvency.
C.
The PCP shall file annual audited financial statements with the Department. A PCP in operation for less than 1 year shall file an interim statement.
D.
The provider agreement shall provide for the continuation of benefits to all enrollees for the duration of the contract period for which payment has been made.
E.
The PCP shall have a financially sound operation as demonstrated by:
(1)
A positive net worth; and
(2)
Sufficient cash and adequate liquidity, as determined by the Department, to meet the PCP's obligations as they become due.
F.
The PCP shall provide full and complete information as to the identity of each person or corporation with an ownership or control interest in the PCP and of any subcontractor in which the PCP has a 5 percent or more ownership interest.
G.
PCPs that are at risk for services that the PCPs do not directly provide shall deposit an amount equal to the portion of 2 months' capitation payments relating to the services in a reserve account in trust. The agreement establishing the reserve account, which is subject to the Department's approval, may provide that the Department is the sole beneficiary of the trust, and that the trust funds may be disbursed only at the request of the Department to prevent or postpone the PCP's insolvency.
H.
Minimum Insurance Coverage.
(1)
The PCP shall provide written evidence to the Department on an annual basis that it has sufficient insurance issued by an insurer authorized by the Maryland Insurance Administrator to engage in the insurance business to protect its financial viability and its ability to carry out its contractual obligations.
(2)
The coverage shall include at a minimum:
(a)
Malpractice coverage for all professional and related employees of the provider as well as for the organization itself;
(b)
Bonding of all employees and officers who have any responsibility for the accounting and financial management activities of the provider; and
(c)
Workers' compensation, fire, theft, casualty, and other coverage as required by State and local laws.
I.
PCPs which are governmental units or are funded by the Behavioral Health Administration or the Developmental Disabilities Administration of the Department and subject to the oversight of one of these agencies are exempt from the requirements of this regulation.
Regulation .11 Subcontracts.LinkCopy Citation
A.
The PCP shall ensure that the following provisions are contained in all subcontracts:
(1)
A description of the services to be provided by the subcontractor;
(2)
A description of other activities to be performed by the subcontractor;
(3)
Providing for release to the PCP of any information necessary for the PCP to perform any of its obligations under its contract with the Department, including but not limited to compliance with the reporting and quality assurance requirements of this chapter;
(4)
That the facilities and records of the subcontractor shall be open to inspection by the PCP and the Department and that medical records or copies of medical records will be transferred to the PCP upon request upon termination of the subcontractor;
(5)
That a termination of the subcontract may not be effective without 30 days prior written notice to the Department;
(6)
That the subcontractor shall look solely to the PCP for compensation for services provided to recipients;
(7)
The subcontractor shall cooperate with the PCP in implementing the PCP's quality assurance program; and
(8)
Such other provisions as the Department may reasonably require, taking into consideration the nature of the services to be provided and the requirements of this contract.
B.
The Department shall preapprove subcontracts.
C.
A subcontract may not alter or negate the PCP's legal responsibility to the Department under the PCP's provider agreement and this chapter.
Regulation .12 Internal Grievance Procedure.LinkCopy Citation
A.
The PCP shall have an internal grievance procedure which has been preapproved by the Department. The PCP shall provide a copy of its internal grievance procedures to all enrollees.
B.
The internal grievance procedure may:
(1)
Provide for the prompt resolution of any complaints of enrollees or their representatives;
(2)
Assure the participation of individuals with the authority to require corrective action; and
(3)
Require that a written record be made of all grievances and complaints by enrollees, and the responses taken by the PCP.
C.
The PCP shall submit monthly reports to the Department that summarize any grievances and complaints, the actions taken by the PCP in response to the complaints and grievances, and the PCP's plans to address the problems raised in the complaints and grievances.
Regulation .13 Payment Procedure.LinkCopy Citation
A.
The Department shall pay a PCP a per capita capitation payment for capitated services.
B.
The Department shall calculate the capitation payment as a percentage of the cost to the Program of providing the same services on a fee-for-service basis to an actuarially equivalent non-enrolled group.
Regulation .14 Recovery and Reimbursement.LinkCopy Citation
Recovery and reimbursement under this chapter are as set forth in COMAR 10.09.36.07.
Regulation .15 Cause for Suspension or Removal and Imposition of Sanctions.LinkCopy Citation
Causes for suspension or removal and imposition of sanctions under this chapter are as set forth in COMAR 10.09.36.08.
Regulation .16 Appeal Procedures.LinkCopy Citation
Appeal procedures under this chapter are as set forth in COMAR 10.09.36.09.
Regulation .17 Interpretive Regulation.LinkCopy Citation
Interpretation of this regulation is subject to COMAR 10.09.36.10.
Chapter annotations
Authority: Health-General Article, §§2-104(b), 15-103, and 15-105, Annotated Code of Maryland
History: Effective date
History: Regulations .01 — .17 adopted as an emergency provision effective June 14, 1995 (22:14 Md. R. 1051); adopted permanently effective October 23, 1995 (22:21 Md. R. 1616)
History: Regulation .10I amended effective March 30, 2026 (53:6 Md. R. 291)