Ch. 57

1997 LAWS OF MARYLAND

3. A procedure for preauthorization of a medical service the
costs of which are anticipated to exceed a minimum threshold amount; and

4. A panel of preferred providers to provide services at
specified levels of reimbursement.

(2) Any agreement between a nonprofit health services plan or insurer and
a panel under paragraph (l)(ii)4 of this subsection shall contain a provision that a
policyholder or subscriber is not obligated to pay for a medical service rendered that is
determined not to be medically necessary.

(3) Subject to the approval of the INSURANCE Commissioner, a limited
benefits policy may include reasonable deductibles, copayment provisions, preexisting
condition limitations of 10 months or less, and medical underwriting as provided under
[this article] THE INSURANCE ARTICLE.

(e) (1) Prior to issuing a limited benefits policy, a nonprofit health service plan
or insurer shall provide to a prospective policyholder a written statement that, at a
minimum, discloses:

(i) Those mandated health insurance benefits and nondiscrimination
provisions not covered by the policy;

(ii) The managed care and cost control features of the policy, along
with all appropriate mailing addresses and telephone numbers to be utilized in seeking
information or authorization;

(iii) That a lower cost health insurance policy may be available from
another insurer or from a health maintenance organization, and that the prospective
policyholder may contact the Maryland Insurance Commissioner for additional
information and assistance; and

(iv) The primary and preventive care features of the policy.

(2) A statement provided under paragraph (1) of this subsection shall be in
clear and understandable language.

(f) (1) Prior to issuing a limited benefits policy, a nonprofit health service plan
or insurer shall obtain from a prospective policyholder:

(i) As a condition of coverage, the information form required under
subsection (i) of this section; and

(ii) A signed written statement that:

1. Certifies as to the eligibility for coverage under the policy;

2. Acknowledges that the disclosure statement required under
subsection (e) of this section was provided, and that the extent of the coverage and the
managed care and cost control features of the policy were explained and understood; and

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