Ch. 35

1997 LAWS OF MARYLAND

(1) BEFORE A MANAGED CARE ORGANIZATION MAY ENROLL A
MEDICAL ASSISTANCE PROGRAM RECIPIENT, THE MANAGED CARE ORGANIZATION
SHALL PROVIDE A BUSINESS PLAN TO THE COMMISSIONER.

(2) AS PART OF THE ANNUAL REPORT REQUIRED UNDER SUBSECTION
(A) OF THIS SECTION, A MANAGED CARE ORGANIZATION SHALL:

(I) FILE A CONSOLIDATED FINANCIAL STATEMENT IN
ACCORDANCE WITH PARAGRAPH (3) OF THIS SUBSECTION;

(II) PROVIDE A LIST OF THE TOTAL COMPENSATION FROM THE
MANAGED CARE ORGANIZATION, INCLUDING ALL CASH AND DEFERRED
COMPENSATION, STOCK, AND STOCK OPTIONS IN ADDITION TO SALARY, OF EACH
MEMBER OF THE BOARD OF DIRECTORS OF THE MANAGED CARE ORGANIZATION,
AND EACH SENIOR OFFICER OF THE MANAGED CARE ORGANIZATION OR ANY
SUBSIDIARY OF THE MANAGED CARE ORGANIZATION AS DESIGNATED BY THE
COMMISSIONER; AND

(III) PROVIDE ANY OTHER INFORMATION OR DOCUMENTS
NECESSARY FOR THE COMMISSIONER TO ENSURE COMPLIANCE WITH THIS
SUBSECTION AND SUBSECTIONS (A)(3)(III) AND (C)(5), (6), AND (7) OF THIS SECTION
AND FOR THE SECRETARY OF HEALTH AND MENTAL HYGIENE TO CARRY OUT
TITLE 15, SUBTITLE 1 OF THE HEALTH - GENERAL ARTICLE.

(3) THE CONSOLIDATED FINANCIAL STATEMENT SHALL:

(I) COVER THE MANAGED CARE ORGANIZATION AND EACH OF
ITS AFFILIATES AND SUBSIDIARIES; AND

(II) CONSIST OF THE FINANCIAL STATEMENTS OF THE MANAGED
CARE ORGANIZATION AND EACH OF ITS AFFILIATES AND SUBSIDIARIES PREPARED
IN ACCORDANCE WITH STATUTORY ACCOUNTING PRINCIPLES AND ON A FORM
APPROVED BY THE COMMISSIONER, AND CERTIFIED TO BY AN INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANT AS TO THE FINANCIAL CONDITION,
TRANSACTIONS, AND AFFAIRS OF THE MANAGED CARE ORGANIZATION AND ITS
AFFILIATES AND SUBSIDIARIES FOR THE IMMEDIATELY PRECEDING CALENDAR
YEAR.

(C) LOSS RATIO BENCHMARK.

(1) FOR A HEALTH BENEFIT PLAN THAT IS ISSUED UNDER SUBTITLE 12
OF THIS TITLE, THE COMMISSIONER MAY REQUIRE THE INSURER, NONPROFIT
HEALTH SERVICE PLAN, OR HEALTH MAINTENANCE ORGANIZATION TO FILE NEW
RATES IF THE LOSS RATIO IS LESS THAN 75%.

(2) (I) SUBJECT TO SUBPARAGRAPH (II) OF THIS PARAGRAPH, FOR A
HEALTH BENEFIT PLAN THAT IS ISSUED TO INDIVIDUALS THE COMMISSIONER MAY
REQUIRE THE INSURER, NONPROFIT HEALTH SERVICE PLAN, OR HEALTH
MAINTENANCE ORGANIZATION TO FILE NEW RATES IF THE LOSS RATIO IS LESS
THAN 60%.

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