Ch; 341

1995 LAWS OF MARYLAND

(b)     (1) [On or before January 1, 1995,] AFTER JANUARY 1, 1996, BY JANUARY
1, 1997, the Commission shall [develop and] implement a payment system for all health
care practitioners in the State.

(2)     The payment system established under this section shall include a
methodology for a uniform system of health care practitioner reimbursement.

(3)     Under the payment system, reimbursement for each health care
practitioner shall be [derived by multiplying] COMPRISED OF the following numeric
factors:

(i) A numeric factor representing the resources of the health care
practitioner necessary to provide health care services;

(ii) A numeric factor representing the relative value of a health care
service, as classified by a code, compared to that of other health care services; and

(iii) A numeric factor representing a conversion modifier used to adjust
reimbursement.

(4)     To prevent overpayment of claims for surgery or services, in developing
the payment system under this section, the Commission, to the extent practicable, shall
establish standards to prohibit the unbundling of codes and the use of reimbursement
maximization programs, commonly known as "upcoding".

(5)     In developing the payment system under this section, the Commission
shall consider the underlying methodology used in the resource based relative value scale
established under 42 U.S.C. § 1395W-4.

(6)     The Commission and the licensing boards shall develop, by regulation,
appropriate sanctions, including, where appropriate, notification to the insurance fraud
unit of the State, for health care practitioners who violate the standards established by
the Commission to prohibit unbundling and upcoding.

(c)     (1) In establishing a payment system under this section, the Commission
shall take into consideration the factors listed in this subsection.

(2) In making a determination under subsection (b)(3)(i) of this section
concerning the resources of a health care practitioner necessary to deliver health care
services, the Commission:

(i) Shall ensure that the compensation for health care services is
reasonably related to the cost of providing the health care service; and

(h) Shall consider:

1.       The cost of professional liability insurance;

2.       The cost of complying with all federal, State, and local
regulatory requirements;

3.       The reasonable cost of bad debt and charity care;

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