# COMAR Title 10 — Maryland Department of Health

## Subtitle 67 — Maryland Healthchoice Program

### Chapter 03 — Maryland Medicaid Managed Care Program: MCO Application

**Authority:** Health-General Article §§15-102 and 15-103, Annotated Code of Maryland

**Administrative History:** Effective date:

**Administrative History:** Regulations .01—.11 adopted as an emergency provision effective November 8, 1996 (23:25 Md. R. 1730)

**Administrative History:** Regulations .01—.11 adopted effective March 10, 1997 (24:5 Md. R. 408)

**Administrative History:** Regulation .01 repealed effective December 27, 2010 (37:26 Md. R. 1787)

**Administrative History:** Regulation .02C repealed effective April 16, 2012 (39:7 Md. R. 492)

**Administrative History:** Regulation .03F, G amended effective December 23, 2002 (29:25 Md. R. 1981)

**Administrative History:** Regulation .03H amended effective February 2, 2004 (31:2 Md. R. 82)

**Administrative History:** Regulation .03T amended effective February 26, 2018 (45:4 Md. R. 205)

**Administrative History:** Regulation .04 amended effective June 30, 2008 (35:13 Md. R. 1180)

**Administrative History:** Regulation .04F amended effective December 23, 2002 (29:25 Md. R. 1981)

**Administrative History:** Regulation .05 amended effective October 28, 2013 (40:21 Md. R. 1775); February 16, 2015 (42:3 Md. R. 316); February 1, 2016 (42:23 Md. R. 1434)

**Administrative History:** Regulation .05A amended effective December 27, 2010 (37:26 Md. R. 1787); December 31, 2018 (45:26 Md. R. 1244)

**Administrative History:** Regulation .06 amended as an emergency provision effective July 1, 1998 (25:16 Md. R. 1261); amended permanently effective January 1, 1999 (25:26 Md. R. 1925)

**Administrative History:** Regulation .06 amended effective June 30, 2008 (35:13 Md. R. 1180)

**Administrative History:** Regulation .06E amended effective October 28, 2013 (40:21 Md. R. 1775)

**Administrative History:** Regulation .06G amended effective February 16, 2015 (42:3 Md. R. 316)

**Administrative History:** Regulation .07A amended effective December 23, 2002 (29:25 Md. R. 1981)

**Administrative History:** Regulation .07E amended effective February 16, 2015 (42:3 Md. R. 316)

**Administrative History:** Regulation .08 repealed effective April 19, 2010 (37:8 Md. R. 615)

**Administrative History:** Regulation .08 adopted effective December 24, 2012 (39:25 Md. R. 1612)

**Administrative History:** Regulation .09 amended effective April 19, 2010 (37:8 Md. R. 615); December 27, 2010 (37:26 Md. R. 1787)

**Administrative History:** Regulation .09G amended effective October 5, 2009 (36:20 Md. R. 1528)

**Administrative History:** Regulation .09K amended effective December 23, 2002 (29:25 Md. R. 1981)

**Administrative History:** Regulation .10C, D amended effective February 16, 2015 (42:3 Md. R. 316)

**Administrative History:** Regulation .11 amended effective February 26, 2018 (45:4 Md. R. 205)

**Administrative History:** Regulation .11C amended as an emergency provision effective November 1, 2008 (35:24 Md. R. 2069); amended permanently effective February 23, 2009 (36:4 Md. R. 353)

**Administrative History:** Chapter transferred from COMAR 10.09.64 effective November 1, 2019 (46:22 Md. R. 977)

**Administrative History:** Regulation .03I amended effective April 28, 2025 (52:8 Md. R. 359)

#### Regulation .01 Repealed.

*COMAR 10.67.03.01*

#### Regulation .02 Application.

*COMAR 10.67.03.02*

A. When applying for participation in the Maryland Medicaid Managed Care Program as an MCO, an applicant shall submit an application to the Secretary in the form that the Secretary requires.

B. An applicant may omit from its application any information or documents that it has previously submitted to the Department, if:

  (1) The information or documents are up to date; and

  (2) The applicant identifies in its application the information and documents that it has omitted.

#### Regulation .03 Organization, Operations, and Financing.

*COMAR 10.67.03.03*

Except as provided in Regulation .02B of this chapter, an MCO applicant shall include the following information or descriptions in its application:

A. An indication whether the applicant is an operating HMO with a certificate of authority from the Maryland Insurance Administration;

B. A written legal history of the applicant, specific as to dates and parties involved, that includes, but is not limited to:

  (1) Predecessor corporations;

  (2) Mergers;

  (3) Reorganizations; and

  (4) Changes of ownership;

C. A copy of the articles of incorporation of the applicant, and any amendments to it, certified by the Maryland Department of Assessments and Taxation;

D. A copy of the applicant's current bylaws, certified by the appropriate corporate officer;

E. A written description providing a reason if the applicant has ever defaulted on a contract or otherwise had a contract terminated;

F. If the applicant is an HMO, the most recent annual loss ratio report provided to the Maryland Insurance Administration pursuant to Insurance Article, §5-605, Annotated Code of Maryland;

G. A copy of the applicant's business plan provided to the Maryland Insurance Administration pursuant to Insurance Article, §5-605, Annotated Code of Maryland.

H. Evidence of compliance with Maryland Workers' Compensation Law, as follows:

  (1) Except as provided in §H(2) of this regulation, the applicant shall submit:

    (a) The policy number of its Workers' Compensation insurance coverage; and

    (b) The name of its Workers' Compensation insurance carrier; or

  (2) If self-insured, the applicant shall submit a certificate of compliance evidencing employee coverage under Workers' Compensation Law, as provided in Labor and Employment Article, Title 9, Annotated Code of Maryland;

I. The names, addresses, and official capacities of the managing employees or other individuals responsible for the conduct of the affairs of the applicant, including concise position descriptions and background, citing education, training, and experience, for, but not limited to, the applicant's:

  (1) Chief Executive Officer;

  (2) Chief Medical Officer;

  (3) Chief Information Officer;

  (4) Chief Financial Officer;

  (5) Chief Quality Officer;

  (6) Clinical Operations Manager;

  (7) Chief Operating Officer;

  (8) Marketing Director;

  (9) Program Integrity Director;

  (10) Health Equity Director;

  (11) Chief Compliance Officer;

  (12) Appeals and Grievances Manager;

  (13) Provider Relations Manager;

  (14) Special Needs Coordinator, as defined in COMAR 10.67.04.04; and

  (15) Newborn Coordinator, as defined in COMAR 10.67.04.27;

J. A full disclosure of the extent and nature of any contracts or arrangements, including any possible conflicts of interest between the applicant and any individual specified in §I of this regulation;

K. The name and address of each person with a 5 percent or more ownership or controlling interest in the applicant or in any subcontractor or supplier in which the applicant has direct or indirect ownership of 5 percent or more, including identifying whether any person named is related to any other named person as either spouse, parent, child, or sibling;

L. A list of any subcontractors or suppliers owned by the applicant, indicating the percent of financial interest held;

M. A history of any subcontractors with whom the applicant has had business transactions totaling more than $25,000 during the 12-month period ending on the date of application;

N. A description of the applicant's corporate and organizational structure, and an organizational chart, with detailed lines of authority indicating the relationships among the board of directors, the administrative component, and the medical and health service delivery component of the applicant including, but not limited to, staff positions responsible for the plan's key management functions enumerated in §I of this regulation;

O. A description of all current contractual relationships between the applicant and subcontractors for administrative/management, health, and marketing services, including the subcontractors' names;

P. A description of any contracts the applicant intends to enter into before beginning operation as an MCO;

Q. The name of any person or persons holding an ownership or controlling interest in excess of 5 percent in the applicant, or who is an agent or managing employee of the applicant, who has been subject to a conviction as defined at 42 U.S.C. §1320a-7(i), or a sanction for a Program-related offense;

R. Copies of all standard subcontracts with service and administrative providers who are not salaried employees of the applicant, including identification of any provision in subcontracts which differ from the standard subcontract;

S. A description of the method by which the applicant will accomplish cost avoidance or recovery in the case of third-party liability; and

T. Copies of the applicant’s written Medicaid marketing plan including:

  (1) A description of how the applicant plans to address the special access provisions in COMAR 10.67.05.01D; and

  (2) Sample version of all material and communication the applicant would like to distribute to potential enrollees, including but not limited to:

    (a) Brochures;

    (b) Fact sheets; and

    (c) Posters.

#### Regulation .04 Financial Solvency.

*COMAR 10.67.03.04*

An applicant that is not a Maryland certified HMO shall include in its application the following information or descriptions:

A. A table labeled “Insurance Coverage”, specifying the applicant's coverage in insurance types including, but not limited to, reinsurance, risk of insolvency, medical malpractice, general liability, and fidelity bond, and detailing the:

  (1) Carrier;

  (2) Entity covered;

  (3) Description of coverage including deductibles, coinsurance, and minimum and maximum benefits;

  (4) Premium in effect;

  (5) Any additional policies to cover new risks associated with anticipated MCO functions; and

  (6) Any other pertinent arrangements;

B. Evidence of the applicant's insurance for general liability and medical malpractice in the minimum amounts of $1,000,000 per loss and $3,000,000 in the aggregate;

C. Evidence that the applicant has on hand sufficient liquid funds or a reasonably adequate cash flow to meet all organizational and administrative expenses incurred or expected to be incurred before commencing operations;

D. An explanation detailing how the applicant would, if approved, protect itself from insolvency;

E. A description of how the applicant would, if approved, limit its financial risk;

F. Document that the applicant has deposited, in a trust account with the State treasury, $100,000 in cash or government securities of the type described in Insurance Article, §5-701(b), Annotated Code of Maryland;

G. A financial statement audited by an independent certified public accountant of the financial condition of the applicant, including:

  (1) Assets, liabilities, and minimum tangible net equity;

  (2) A prospective budget and expected cash flow analysis of the applicant for the first 24 months of its anticipated operation demonstrating financial stability based on reasonable assumptions; and

  (3) Any other financial information required by the Commissioner to adequately conduct financial examination of an applicant; and

H. A power of attorney executed by the applicant appointing the Commissioner and the Commissioner's authorized deputies as the true and lawful attorney of the applicant in and for the State upon which may be served all lawful process in any action, proceeding, or cause of action arising in this State against the applicant regarding the solvency and financial condition of the applicant.

#### Regulation .05 Access and Capacity.

*COMAR 10.67.03.05*

A. An MCO applicant shall include in its application the following information or descriptions:

  (1) A map or maps showing the county or counties in which the applicant proposes to provide health care services, and the service area boundaries.

  (2) The name and address of each of the applicant's service delivery sites, and, if applicable, the type of facility licensure of each site, grouped by county;

  (3) If the applicant is an HMO, the applicant's total prepaid enrollment or client population as of the date of application, with a breakdown by payment source, including Medicare, Medicaid, commercial group, commercial individual, and other enrollment;

  (4) If the applicant is an HMO, the total of the applicant's current unduplicated fee-for-service patient count, with a breakdown by payment source, including Medicaid, Medicare, commercial group, commercial individual, and other patients (including self-pay);

  (5) The name and address of each of the applicant's primary and specialty care providers, provided in a format specified by the Department, for distribution to recipients in enrollment packets;

  (6) The following information, grouped by medical specialty and county, regarding each individual practitioner, including primary care providers and specialists, who will act as a health care provider for the applicant:

    (a) Name, address, and practice location or locations, including a separate line for each location;

    (b) State licensure number;

    (c) Specialty, if applicable, indicating the type of services to be provided on behalf of the applicant;

    (d) Whether the provider will be a primary care provider;

    (e) A description of the practitioner's employment relationship to the applicant, including, but not limited to:

      (i) A salaried employee;

      (ii) A subcontractor;

      (iii) An employee of a subcontractor; or

      (iv) Any other form of contractual or employment relationship;

    (f) Any restrictions as to age of patients or numbers of enrollees the provider will serve;

  (7) The procedures for assuring proper credentialing and recredentialing of providers;

  (8) Documentation that the MCO applicant is able to meet the access standards set forth in COMAR 10.67.05 in each service area the MCO applicant plans to enter;

  (9) Documentation of any reasons for which they are unable to meet the access requirements of COMAR 10.67.05 in any service area;

  (10) For each primary care practice location, a specification of:

    (a) The name, address, and hours of operation; and

    (b) The staffing at each location, expressed in full-time equivalencies and grouped by medical specialty; and

  (11) Written protocols detailing how the applicant will provide 24-hour per day, 7-day per week coverage for emergency medical situations, including compliance with MIEMSS protocols and the federal Emergency Medical Treatment and Active Labor Act.

B. The service area in §A(1) of this regulation shall include at least two underserved counties as defined in §C of this regulation.

C. An underserved county is a county in which less than three current MCOs are participating and accepting new enrollments.

D. If there are no underserved counties, applications will not be accepted.

#### Regulation .06 Access and Capacity: Benefits and Appointments.

*COMAR 10.67.03.06*

An MCO applicant shall include in its application the following information or descriptions:

A. Written evidence of the applicant's preparedness to provide benefits equivalent to the benefit level mandated by the Maryland Medical Assistance Program as described in COMAR 10.67.05;

B. A description of any benefits the applicant proposes to provide in addition to those required by the Maryland Medicaid Managed Care Program, including:

  (1) Whether there are any limitations on these services; and

  (2) The name, medical specialty, location, and employment status as enumerated in Regulation .05F(5) of this chapter, of any providers rendering additional services;

C. A copy of the written procedures specifying how an enrollee may select and change primary care providers;

D. A written explanation of the applicant's plan to provide adequate case management and continuity of care, including its policies and procedures concerning:

  (1) Case management;

  (2) Making appointments;

  (3) Appointment no-shows;

  (4) Follow-up for appointment no-shows who are at-risk patients; and

  (5) Referral claims and reimbursement for authorized noncontractual and out-of-plan provider services;

E. Documentation of the applicant's preparedness to collaborate with providers of self-referral services, and reimburse at the Department's established fee-for-service rate, for permissible self-referred services as defined in COMAR 10.67.06.28;

F. Documentation of the applicant's preparedness to provide the full range of EPSDT services;

G. Documentation of the applicant’s preparedness to work with the Department’s behavioral health ASO for coordination of somatic care, behavioral health care, and all appropriate drug utilization review.

H. A written explanation of the prospective MCO's plan for providing monthly updates to primary care providers of the enrollees assigned to them;

I. Documentation of the applicant's plan to satisfy statutory requirements that enrollees be notified of due dates for obtaining immunizations, examinations, and other wellness services;

J. Documentation of how the applicant will provide timely access to health care services, including but not limited to:

  (1) Waiting time for telephone calls to be answered;

  (2) Obtaining appointments; and

  (3) Waiting times in practitioners' offices;

K. Documentation of access provisions to address the needs of enrollees who:

  (1) Do not speak English;

  (2) Are deaf; or

  (3) Have one or more physical, mental, or developmental disabilities;

L. The applicant's proposed written utilization management program that specifies, at a minimum, policies and procedures for:

  (1) Referral processes;

  (2) Services requiring preauthorization, including mechanisms for ensuring consistent application and requesting provider consultation when appropriate;

  (3) Criteria for determining medical necessity;

  (4) Provider responsibilities for utilization management activities;

  (5) Case management processes;

  (6) Utilization tracking mechanisms and the determination of over-utilization and under-utilization of health care services;

  (7) Integration of activities with quality improvement for provider profiling; and

  (8) Appeals and grievance processes;

M. The applicant's proposal to establish and utilize a consumer advisory board, including:

  (1) The anticipated composition of the board;

  (2) Identifying staff responsible for serving board needs; and

  (3) Proposed mechanisms by which the board will furnish the MCO with regular enrollee input;

N. A written description of the applicant's proposed member services unit, including a consumer services hotline, describing how the applicant will use this:

  (1) As an information source for enrollees;

  (2) To respond to enrollees' needs and requests in a timely manner; and

  (3) To facilitate enrollees' access to needed health care services, including how the hotline will function as a point of entry for complaint resolution and internal grievance procedures;

O. A written Enrollee Outreach Plan that:

  (1) Describes how the MCO intends to comply with the outreach, quality assurance, and provision of health care services requirements of Health-General Article, §15-103(b)(9), Annotated Code of Maryland; and

  (2) To the extent that the materials are relevant to the requirements of §O(1) of this regulation, may incorporate by reference written materials provided by the applicant in response to other elements of its application; and

P. Documentation of any service the MCO elects not to provide, reimburse for, or provide coverage of, because of a moral or religious objection, which shall:

  (1) Be provided to the Department whenever an MCO adopts the policy during the term of the contract;

  (2) Be consistent with the provisions of 42 CFR §438.10, as amended; and

  (3) Be provided to enrollees within 90 days after adopting the policy with respect to any particular service.

#### Regulation .07 Access and Capacity: Contracts and Provider Applications.

*COMAR 10.67.03.07*

An MCO applicant shall include in its application the following information or descriptions:

A. A description of the applicant's hiring and subcontracting policies, which shall correspond to the requirements of Insurance Article, §15-112, Annotated Code of Maryland;

B. A blank copy of the provider application form;

C. Documentary assurances that the applicant and its health care providers furnish access on a nondiscriminatory basis, in accordance with State and federal law, to all of their enrollees regardless of gender, race, age, religion, national origin, physical or mental disability, or type of illness or condition;

D. If the applicant is an HMO that will require its panel providers to participate in the MCO, documentation of the mechanism the MCO will use to make an equitable distribution of enrollees among its panel providers so that no provider is assigned a disproportionate number of enrollees;

E. Written evidence of the applicant's organizational capacity to provide special programs adequate to meet the individual needs of all enrollees, including:

  (1) Outreach;

  (2) Case management;

  (3) Home visiting;

  (4) Disease management;

  (5) Prevention and wellness education; and

  (6) All Medicaid-covered services required to comply with State statutes and regulations mandating health and behavioral health services for children in State-supervised care;

F. A written explanation of the applicant's plan for ensuring that each primary and specialty care provider receives a copy of the MCO's Medicaid requirements manual, and any other information necessary to facilitate full compliance with all federal and State Medicaid requirements within 2 weeks after the provider has entered into a contract or has begun employment with the MCO, and updated as necessary thereafter; and

G. A description of the applicant's plan to accommodate the cultural and ethnic diversity of the populations to be served.

#### Regulation .08 National Committee on Quality Assurance (NCQA) Accreditation.

*COMAR 10.67.03.08*

A. Effective July 1, 2012, an MCO applicant shall obtain NCQA health plan accreditation within 2 years of their effective date as an MCO.

B. Effective January 1, 2025, an MCO shall obtain NCQA health equity accreditation within 2 years of their effective date as an MCO.

#### Regulation .09 Quality Assurance System — General.

*COMAR 10.67.03.09*

An applicant shall include in its application the following information or descriptions:

A. The applicant's proposed quality assurance plan, that contains, at a minimum, all elements specified by Health-General Article, §15-103(b)(9)(i), Annotated Code of Maryland;

B. A description of any written procedures or protocols regarding physician and nursing care practice the applicant intends to use;

C. A description of the applicant's peer review committee structure and process;

D. A copy of the applicant's case management plan;

E. A description of all mechanisms to be used to ensure the quality of any services, including administrative and clinical, that the applicant intends to delegate to subcontractors;

F. The name and a description of the published standards or guidelines for maintenance of medical records the applicant will follow;

G. A description of how providers will be apprised of medical records, utilization review, and case management requirements;

H. A description of the applicant's system for ensuring inclusion in the medical record of reports of health care services or diagnostic testing performed in a referral setting;

I. A written description of the applicant's internal review system for the handling, monitoring, and resolution of provider complaints, grievances, and appeals;

J. Evidence of an adequate system for medical record retention and retrieval that meets, at minimum, all requirements of Health-General Article, §15-103(b)(9)(xiv), Annotated Code of Maryland;

K. Documentary evidence that the applicant requires school-based clinics to provide information concerning health care services provided to their enrollees;

L. A copy of the applicant's practice guidelines used to assist practitioners in approaching health care issues in a systematic, appropriate manner;

M. A copy of the applicant's health education plan;

N. A written description of the applicant's complaint resolution protocol, which shall, at minimum:

  (1) Include an internal grievance procedure by which an enrollee who is dissatisfied with the applicant or its providers may seek recourse within the applicant;

  (2) Specify what constitutes a grievance;

  (3) Provide for prompt resolution of complaints;

  (4) Require participation in the grievance process by individuals within the MCO who have the authority to require corrective action;

  (5) Specify how the MCO will handle formal appeals by enrollees;

  (6) Include a form that enrollees will use when filing a grievance, including foreign language versions for any substantial minorities in the applicant's proposed MCO service area;

  (7) Identify the steps in the grievance process, and what personnel will be responsible for receiving, processing, monitoring, and responding to grievances;

  (8) Specify how the enrollee will be informed that the enrollee's grievance is being investigated, and the protocols by which grievances will be resolved;

  (9) Describe what methods will be used to inform enrollees about the operation of the grievance procedure; and

  (10) Describe whether manual or automated processes will be used to track enrollees' complaints, determine any patterns of complaints, and report findings to the proposed MCO's quality assurance or quality improvement system; and

O. A copy of the MCO's provider education plan.

#### Regulation .10 Special Needs Populations.

*COMAR 10.67.03.10*

An MCO applicant shall include in its application the following information or descriptions:

A. A narrative description of the clinical expertise and experience of the MCO's network for special needs populations in a format specified by the Department;

B. Written evidence of the applicant's ability to comply with specific quality access, data, and performance measurements to satisfy the general requirements for all special needs populations specified in COMAR 10.67.04.04;

C. Written evidence, including treatment protocols, of the applicant’s ability to provide the range of clinical and support services specified in COMAR 10.67.04.05—.10 and .13, to ensure appropriate and coordinated services to the following special populations:

  (1) Children with special health care needs;

  (2) Individuals with a physical disability;

  (3) Individuals with a developmental disability;

  (4) Pregnant and postpartum women;

  (5) Individuals who are homeless; and

  (6) Individuals with HIV/AIDS; and

D. Referral protocols that demonstrate the conditions under which PCPs will make the arrangements for children with special health care needs to be referred to MCO specialty care networks and when appropriate the behavioral health ASO for services as described in COMAR 10.09.59 or 10.09.80.

#### Regulation .11 Management Information System and Data Reporting.

*COMAR 10.67.03.11*

An MCO applicant shall include in its application the following information or descriptions:

A. A description of the applicant's management information system, including, but not limited to:

  (1) Capacities, including:

    (a) The ability to generate and transmit electronic claims data consistent with the Medicaid Statistical Information System (MSIS) requirements or successor systems;

    (b) The ability to collect and report data on enrollee and provider characteristics and on all services furnished to enrollees through an encounter data system;

    (c) The ability to screen the data collected for completeness, logic, and consistency; and

    (d) The ability to collect and report data from providers in standardized formats using secure information exchanges and technologies utilized for Medicaid quality improvement and care coordination efforts;

  (2) Software;

  (3) Characteristics; and

  (4) Ability to interface with other systems;

B. A description of the applicant's operational procedures for generating service-specific encounter data;

C. Evidence of the applicant's ability to report, on a monthly basis, service-specific encounter data in UB04 or CMS1500 format;

D. A description of the applicant's operational procedures for generating financial reports, including, but not limited to:

  (1) Annual audits;

  (2) Annual financial statements; and

  (3) Quarterly unaudited financial statements;

E. Evidence of the applicant’s ability to collect and report all data necessary to derive indicators for Healthcare Effectiveness Data and Information Set (HEDIS); and

F. A description of the applicant’s procedures for verifying the accuracy and timeliness of reported data, including data from network providers the MCO was compensating on the basis of capitation payments or other payment arrangements that are not fee-for-service.