1624

LAWS OF MARYLAND

Ch. 572

(Medicaid) 42 U. S. C. § 1396 et seq. (1970 Ed. and Supp.
III 1972), as amended from time to time, AND PUBLIC HEALTH
SERVICE ACT, TITLE III (42 U. S. C. § 254C) , AS AMENDED FROM
TIME TO TIME, proposed to be made or made with governmental
or private agencies covering all or part of the cost of
subscriptions to provide health care services, facilities,
appliances, medicines, or supplies are financially sound,
based on reasonable actuarial assumptions that the
organization will be in a position to meet its obligations
and commitments to the agencies and their beneficiaries by
reason of the HEALTH MAINTENANCE organization's net equity
position, stop loss, reinsurance arrangements made with
authorized insurers, or other arrangements made by the
organization which are satisfactory to the Commissioner;

(4)   The terms of the contracts proposed to be
offered to subscribers will in fact assure that the health
care services will be rendered to members of the HEALTH
MAINTENANCE organization under reasonable standards of
quality of care applicable to the geographic area to be
served as approved by the Department of Health and Mental
Hygiene;

(5)   The procedures for offering health care
services and offering and terminating contracts to
subscribers will not unfairly discriminate on the basis of
age, sex, race, health or economic status. This requirement
does not prohibit reasonable underwriting classifications
for the purposes of establishing contract rates nor does it
prohibit experience rating;

(6)   The organization furnishes evidence of
adequate insurance coverage or an adequate plan for
self—insurance to respond to claims for injuries arising out
of the furnishing of health care;

(7)   The organization has provided, through
contract or otherwise, for periodic external audit and
review of its HEALTH MAINTENANCE ORGANIZATION'S health and
medical facilities and services in the manner determined or
approved by the Department of Health and Mental Hygiene,
using methods which will provide maximum confidentiality as
to patient identity and assure objective evaluation.
However, the organization may employ in lieu of an external
audit its own internal quality of care committee audit
procedures, if the procedures are approved by the Department
of Health and Mental Hygiene. Where there is a professional
standards review organization as described in 42 U. S. C. §
1320c—1 (Supp. III 1972), as amended from time to time,
which is certified by the United States Department of
Health, Education and Welfare as capable of serving persons
in the area in which the health maintenance organization is
located who are receiving benefits under "Subchapter XVIII.
— Health Insurance for the Aged and Disabled" (Medicare) 42
U. S. C. § 1395 et seq. (1970 Ed. and Supp. III 1972), as
amended from time to time, [and] "Subchapter XIX. — Grants
to States for Medical Assistance Programs" (Medicaid) 42 U.