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Chapter 10. Maryland Medicaid Managed Care Program: Sanctions

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Regulation .01 Sanction by the Department.Copy Citation

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A.
If the Department determines, after a sufficient investigation, that an MCO or any agent or employee of the MCO, or any person with an ownership interest in an MCO, or related party of the MCO, has failed to comply with any applicable law, regulation, or contract term, or for other good cause shown, the Department may impose sanctions on the MCO, including but not limited to:
(1)
Fines;
(2)
Suspension of further enrollment;
(3)
Withholding all or part of the capitation payment;
(4)
Termination of the current HealthChoice Managed Care Organization Agreement;
(5)
Disqualification from future participation in the Maryland Medicaid Managed Care Program;
(6)
Orders to provide a benefit or service to enrollees; and
(7)
Those outlined in 42 CFR §§438.700—438.708, as amended.
B.
Corrective Action.
(1)
Subject to §B(2) of this regulation, before imposing a sanction pursuant to §A of this regulation, the Department may permit an MCO an opportunity to take corrective action in accordance with a plan approved by the Department.
(2)
The MCO shall submit a corrective action plan within a time frame specified by the Department.

Regulation .01-1 Sanction by Center for Medicare and Medicaid Services (CMS).Copy Citation

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The Department shall comply with notification requirements of CMS at 42 CFR §438.730 for sanction determinations as specified in 42 CFR §438.700(b)(1)—(b)(6).

Regulation .02 Appeal.Copy Citation

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A.
From the decisions set forth in §B(1)—(8) of this regulation, an MCO may exercise the appeal rights set forth in §C of this regulation.
B.
The following Department decisions are appealable by the MCO or MCO applicant:
(1)
Denial of an entity’s completed application to become an MCO;
(2)
Decision to terminate the MCO's participation in the Maryland Medicaid Managed Care Program;
(3)
Decision to impose a fine valued at $50,000 or more on the MCO as described in Regulation .01 of this chapter;
(4)
Order that the MCO is impaired or in “hazardous financial condition”;
(5)
An adverse decision by the IRO as described in COMAR 10.67.13.08;
(6)
The denial of a hepatitis C payment as described in COMAR 10.67.04.19;
(7)
Overpayments recovered by the Department as described in COMAR 10.67.07.01; and
(8)
Remittances to the Department as described in COMAR 10.67.04.19-5.
C.
An MCO may appeal a decision listed in §B of this regulation to the Office of Administrative Hearings as specified in COMAR 10.01.03 and COMAR 10.09.36.09.
D.
The parties to an appeal to the Office of Administrative Hearings under §C of this regulation are the Department and the MCO. The enrollee is not a party at this hearing.
E.
The following sanctions shall take effect immediately and are not subject to stay during the pendency of an appeal:
(1)
Any fines imposed;
(2)
Any full or partial withhold of the capitation payment;
(3)
Any remittances to the Department as described in COMAR 10.67.04.19-5; or
(4)
Any overpayments recovered by the Department as described in COMAR 10.67.07.01.

Regulation .03 Incentives.Copy Citation

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A.
All monies collected from the MCOs as a result of the imposition of a financial sanction shall be deposited in the HealthChoice Performance Incentive Fund.
B.
This nonlapsing fund shall include all sanctions imposed on the MCOs starting in calendar year 1999.
C.
The fund shall be used to provide financial incentive awards to the MCOs that meet or exceed specific performance targets as established by the Department, unless otherwise directed by law.
Chapter annotations
Authority: Health-General Article, §15-103(b)(9), Annotated Code of Maryland
History: Effective date:
History: Regulations .01 and .02 adopted as an emergency provision effective November 8, 1996 (23:25 Md. R. 1730); adopted permanently effective March 10, 1997 (24:5 Md. R. 408)
History: Regulation .01A amended effective June 30, 2008 (35:13 Md. R. 1180); December 31, 2018 (45:26 Md. R. 1244)
History: Regulation .01B amended effective June 30, 2008 (35:13 Md. R. 1180)
History: Regulation .01B amended as an emergency provision effective July 1, 2003 (30:21 Md. R. 1527); amended permanently effective November 10, 2003 (30:22 Md. R. 1580)
History: Regulation .01C repealed effective December 31, 2018 (45:26 Md. R. 1244)
History: Regulation .01-1 adopted as an emergency provision effective July 1, 2003 (30:21 Md. R. 1527); adopted permanently effective November 10, 2003 (30:22 Md. R. 1580)
History: Regulation .02 repealed and new Regulation .02 adopted effective December 31, 2018 (45:26 Md. R. 1244)
History: Regulation .03 adopted effective February 18, 2002 (29:3 Md. R. 220)
History: Regulation .03C amended as an emergency provision effective July 1, 2003 (30:21 Md. R. 1527); amended permanently effective November 10, 2003 (30:22 Md. R. 1580)
History: Chapter transferred from COMAR 10.09.73 effective November 1, 2019 (46:22 Md. R. 977)
History: Regulation .02B amended effective April 28, 2025 (52:8 Md. R. 359)