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ROBERT L. EHRLICH, JR., Governor S.B. 707
payments for a managed care organization or for the Maryland Medical Assistance
Program of a managed care organization that is a certified health maintenance
organization:
(i) if the loss ratio is less than 80% during calendar year 1997; and
(ii) during each subsequent calendar year if the loss ratio is less
than 85%.
(6) [A loss ratio reported under paragraph (5) of this subsection shall be
calculated separately and may not be part of another loss ratio reported under this
section.
(7)] Any rebate received by a managed care organization may not be
considered part of the loss ratio of the managed care organization.
(8) IF THE SECRETARY OF HEALTH AND MENTAL HYGIENE ADJUSTS
CAPITATION PAYMENTS IN ACCORDANCE WITH FOR A MANAGED CARE
ORGANIZATION OR A CERTIFIED HEALTH MAINTENANCE ORGANIZATION UNDER
PARAGRAPH (5) OF THIS SUBSECTION. A THE MANAGED CARE ORGANIZATION OR THE
MARYLAND MEDICAL ASSISTANCE PROGRAM OF A MANAGED CARE ORGANIZATION
THAT IS A CERTIFIED HEALTH MAINTENANCE ORGANIZATION MAY:
(I) APPEAL THE DECISION OF THE SECRETARY TO THE BOARD OF
REVIEW ESTABLISHED UNDER TITLE 2. SUBTITLE 2 OF THE HEALTH - GENERAL
ARTICLE; AND
(II) TAKE ANY FURTHER APPEAL ALLOWED BY THE
ADMINISTRATIVE PROCEDURE ACT UNDER TITLE 10, SUBTITLE 2 OF THE STATE
GOVERNMENT ARTICLE.
15-605.1.
(A) THE SECRETARY OF HEALTH AND MENTAL HYGIENE, IN CONSULTATION
WITH THE COMMISSIONER AND IN ACCORDANCE WITH THEIR MEMORANDUM OF
UNDERSTANDING, MAY ADJUST CAPITATION PAYMENTS FOR A MANAGED CARE
ORGANIZATION IF THE LOSS RATIO OF THE MANAGED CARE ORGANIZATION IS LESS
THAN 85%.
(B) (1) THE SECRETARY SHALL CALCULATE THE MEDICAL LOSS RATIO THAT
SERVES AS THE BASIS FOR A CAPITATION ADJUSTMENT:
(I) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION,
BASED ON THE AUDITED HEALTHCHOICE FINANCIAL MONITORING REPORT FILED
BY THE MANAGED CARE ORGANIZATION;
(II) IN A MANNER THAT INCLUDES THE MEDICAL ADMINISTRATION
EXPENSES OF A MANAGED CARE ORGANIZATION AS AN ELEMENT OF MEDICAL
EXPENSES IN THE LOSS RATIO; AND
(III) ON A 3 YEAR AVERAGE LOSS RATIO BASED ON THE MEDICAL
LOSS RATIOS OF THE PRECEDING 3 CALENDAR YEARS.
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