PARRIS N. GLENDENING, Governor

Ch. 273

Section 19-706.1

Annotated Code of Maryland

(1990 Replacement Volume and 1994 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Health - General

19-706.1.

(a)     Subject to this section, the provisions of Article 48A, Subtitle 10 of the Code
regarding the rehabilitation and liquidation of insurers is applicable to health
maintenance organizations.

(b)     (1) Subject to paragraph (2) of this subsection, any rehabilitation or
liquidation of a health maintenance organization shall be deemed to be the rehabilitation
or liquidation of an insurer and shall be conducted under the supervision of the
Commissioner under the law governing the rehabilitation or liquidation of insurers.

(2) The provisions of Article 48A, §§ 162, 162A, 163, and 164 of the Code do
not apply to the rehabilitation or liquidation of a health maintenance organization.

(c)     The Commissioner may apply for an order directing the Commissioner to
rehabilitate or liquidate a health maintenance organization:

(1)     Upon any one or more grounds set out in Article 48A, Subtitle 10 of the
Code; or

(2)     When in the Commissioner's opinion the continued operation of the
health maintenance organization would be hazardous either to its members or to the
people of this State.

(d)     (1) In addition to the Commissioner's authority under Article 48A, Subtitle
10 of the Code, the Commissioner as a rehabilitator of a health maintenance organization
may, subject to approval by a court:

(i) Change premium rates and other terms of an individual or group
contract;

(ii) Terminate or change the terms of:

1.       Provider contracts; or

2.       Contracts with participating entities for the provision of
administrative, financial, or management services; and

(iii) Negotiate and, if the assuming health maintenance organization
agrees:

1. Transfer the coverage obligations of the impaired health
maintenance organization to an assuming health maintenance organization; and

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