Ch. 578 LAWS OF MARYLAND

(5) "Nonpreferred provider" means a provider eligible for payment under
a preferred provider policy or preferred provider contract, who is not a contractee
under the provisions of the insurance policy or insurance contract.

(6) "Unfair discrimination" means any act, method of competition, or
practice engaged in by a nonprofit health service plan, which is prohibited by Sections
217 through 234, inclusive, of this article or any act, method of competition, or practice
not specified in Sections 217 through 234, inclusive, of this article that the
Commissioner believes is unfair or deceptive and which results in the institution of an
action by the Commissioner under Section 216 of this article.

(b) (1) Subject to the approval of the Commissioner, a nonprofit health service
plan may offer or administer a health benefit program under which the nonprofit health
service plan may offer preferred provider policies or preferred provider contracts that
limit the numbers and types of providers of health care services eligible for payment as
preferred providers under the insurance policies or insurance contracts.

(2) A nonprofit health service plan may establish terms and conditions that
shall be met by a provider in order to qualify for payment as a preferred provider under
the insurance policies or insurance contracts.

(3) If a preferred provider policy or preferred provider contract provides
for reimbursement for any service that is within the lawful scope of practice of a health
care provider licensed under the Health Occupations Article, any participant,
beneficiary, or other person covered by the insurance policy or insurance contract shall
be entitled to reimbursement for that service.

(4) Preferred provider policies or preferred provider contracts offered
under this section shall provide for payment of services rendered by nonpreferred
providers. Unless the nonprofit health service plan demonstrates to the satisfaction of
the Insurance Commissioner that an alternative level of payment is more appropriate
under the circumstances, aggregate payments in any full calendar year made under this
paragraph to nonpreferred providers after all deductible and copayment provisions
have been applied may not on the average be less than 80% of the aggregate payments
in that full calendar year to preferred providers for similar services in the same
geographic area pursuant to the preferred providers' agreements to provide the
services.

(c) If the rates for each institutional provider under a preferred provider policy
or preferred provider contract vary based upon individual negotiations, geographic
differences, or market conditions and are approved by the Health Services Cost Review
Commission, the rates may not be deemed to constitute unfair discrimination under this
article.

(d) This section does not apply to any employee benefit plan regulated by
federal law or by the Employee Retirement Income Security Act of 1974 (ERISA).]

[470X.

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

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