(a) (1) In this section the following words have the meanings indicated.

(2) “Carrier” means:

(i) an insurer;

(ii) a nonprofit health service plan;

(iii) a health maintenance organization;

(iv) a dental plan organization; or

(v) any other person that provides health benefit plans subject to regulation by the State.

(3) “Eligible provider” means:

(i) a licensed physician, as defined in § 14-101 of the Health Occupations Article, who voluntarily participates in a two-sided incentive arrangement; or

(ii) a set of health care practitioners that voluntarily participate in a two-sided incentive arrangement.

(4) “Health care practitioner” means an individual who is licensed, certified, or otherwise authorized under the Health Occupations Article to provide health care services.

(5) “Set of health care practitioners” means:

(i) a group practice;

(ii) a clinically integrated organization established in accordance with Subtitle 19 of this title;

(iii) an accountable care organization established in accordance with 42 U.S.C. § 1395jjj and any applicable federal regulations; or

(iv) a clinically integrated network that is a provider entity that meets the criteria established in guidance issued by the Federal Trade Commission, including a network of behavioral health care programs licensed under § 7.5-401 of the Health – General Article.

(6) “Two-sided incentive arrangement” means an arrangement between an eligible provider and a carrier in which the eligible provider may earn an incentive and a carrier may recoup funds from the eligible provider in accordance with the terms of a contract entered into with the eligible provider that meets the requirements of this section.

(b) A carrier may not reimburse a health care practitioner in an amount less than the sum or rate negotiated in the carrier’s provider contract with the health care practitioner.

(c) (1) This section does not prohibit a carrier from:

(i) providing bonuses or other incentive-based compensation to a health care practitioner or a set of health care practitioners; or

(ii) entering into a two-sided incentive arrangement with an eligible provider.

(2) A bonus or other incentive-based compensation program or two-sided incentive arrangement authorized under this section:

(i) may not create a disincentive to the provision of medically appropriate or medically necessary health care services; and

(ii) if the carrier is a health maintenance organization, shall comply with the provisions of § 19-705.1 of the Health – General Article.

(3) A bonus or other incentive-based compensation or two-sided incentive arrangement authorized under this section:

(i) if applicable, shall promote health equity, improvement of health care outcomes, and the provision of preventive health care services; or

(ii) may reward a health care practitioner, a set of health care practitioners, or an eligible provider, based on satisfaction of performance measures, if the following is agreed on in writing by the carrier and the health care practitioner, set of health care practitioners, or eligible provider:

1. the performance measures, including the source of the measures;

2. the method and the time period for calculating whether the performance measures have been satisfied;

3. the method by which the health care practitioner, set of health care practitioners, or eligible provider may request reconsideration of the calculations by the carrier; and

4. if applicable, the risk-adjustment method used.

(4) Acceptance of a bonus or other incentive-based compensation or two-sided incentive arrangement under this subsection shall be voluntary.

(5) A carrier may not reduce the fee schedule of a health care practitioner or a set of health care practitioners because the health care practitioner or set of health care practitioners does not participate in the carrier’s bonus or other incentive-based compensation or two-sided incentive arrangement program.

(6) Participation in a two-sided incentive arrangement may not be the sole opportunity for a health care practitioner or a set of health care practitioners to be eligible to receive increases in reimbursement.

(7) A carrier may not require as a condition of participation in the carrier’s provider network:

(i) a health care practitioner or set of health care practitioners to participate in the carrier’s bonus or other incentive-based compensation program; or

(ii) an eligible provider to participate in the carrier’s two-sided incentive arrangement program.

(8) A health care practitioner, a set of health care practitioners, an eligible provider, a health care practitioner’s designee, a designee of a set of health care practitioners, or a designee of an eligible provider may file a complaint with the Administration regarding a violation of this subsection.

(d) (1) A carrier shall provide a health care practitioner, a set of health care practitioners, or an eligible provider with a copy of:

(i) a schedule of all applicable fees or the 50 most common services billed by a health care practitioner in that specialty, whichever is less;

(ii) a description of the coding guidelines used by the carrier that are applicable to the services billed by a health care practitioner in that specialty;

(iii) the information about the practitioner and the methodology that the carrier uses to determine whether to:

1. increase or reduce the practitioner’s level of reimbursement;

2. provide a bonus or other incentive-based compensation to the practitioner; and

3. recoup compensation from an eligible provider under a two-sided incentive arrangement; and

(iv) a summary of the terms of a two-sided incentive arrangement program.

(2) Except as provided in paragraph (4) of this subsection, a carrier shall provide the information required under paragraph (1) of this subsection in the manner indicated in each of the following instances:

(i) in writing before a contract execution;

(ii) in writing or electronically 30 days before a change; and

(iii) in writing or electronically on request of the health care practitioner, set of health care practitioners, or eligible provider.

(3) Except as provided in paragraph (4) of this subsection, a carrier shall make the pharmaceutical formulary that the carrier uses available to a health care practitioner, a set of health care practitioners, or an eligible provider electronically.

(4) On written request of a health care practitioner, a set of health care practitioners, or an eligible provider, a carrier shall provide the information required under paragraphs (1) and (3) of this subsection in writing.

(5) The Administration may adopt regulations to carry out the provisions of this subsection.

(e) (1) A carrier that compensates health care practitioners or a set of health care practitioners wholly or partly on a capitated basis in accordance with § 15-2102 of this article may not retain any capitated fee attributable to an enrollee or covered person during an enrollee’s or covered person’s contract year.

(2) A carrier is in compliance with paragraph (1) of this subsection if, within 45 days after an enrollee or covered person chooses or obtains health care from a health care practitioner or a set of health care practitioners, the carrier pays to the health care practitioner or set of health care practitioners all accrued but unpaid capitated fees attributable to that enrollee or person that the health care practitioner or set of health care practitioners would have received had the enrollee or person chosen the health care practitioner or set of health care practitioners at the beginning of the enrollee’s or covered person’s contract year.

(3) Acceptance of a capitated payment shall be voluntary.

(f) (1) Under a two-sided incentive arrangement that complies with the requirements of this section, a carrier may recoup funds paid to an eligible provider based on the terms of a written contract between the carrier and the eligible provider that at a minimum:

(i) establish a target budget for:

1. the total cost of care of a population of patients adjusted for risk and population size; or

2. the cost of an episode of care;

(ii) limit recoupment to not more than 50% of the excess above the mutually agreed on target established in accordance with item (i) of this paragraph;

(iii) specify a mutually agreed on maximum liability for total recoupment that may not exceed 10% of the annual payments from the carrier to the eligible provider;

(iv) provide an opportunity for gains by an eligible provider that is greater than the opportunity for recoupment by the carrier;

(v) following good faith negotiations, provide an opportunity for an audit by an independent third party and an independent third-party dispute resolution process;

(vi) require the carrier and the eligible provider to negotiate in good faith adjustments to the target budget when:

1. certain circumstances beyond the control of the carrier or the eligible provider arise, including changes in hospital rates; and

2. material changes occur in health care economics, health care delivery, or regulations that impact the arrangement; and

(vii) require the carrier to pay any incentive to or request any recoupment from the eligible provider within 6 months after the end of the contract year, unless the carrier or eligible provider initiates a dispute relating to the recoupment or incentive amount.

(2) Unless mutually agreed to by an eligible provider and a carrier, an arrangement entered into under this subsection may not provide an opportunity for recoupment by the carrier based on the eligible provider’s performance during the first 12 months of the arrangement.

(3) A carrier that enters into a two-sided incentive arrangement with an eligible provider in which the amount of any payment is determined, in whole or in part, on the total cost of care of a population of patients or an episode of care, shall, at least quarterly, disclose to the eligible provider the following information in a manner that meets federal and State data use and privacy standards:

(i) any amount paid to another health care provider that is included in the total cost of care of a patient in the population or episode of care; and

(ii) any copayment, coinsurance, or deductible that is included in the total cost of care of a patient in the population or episode of care.

(4) Unless mutually agreed to by the carrier and eligible provider, a two-sided incentive arrangement may not be amended during the term of the contract.

(5) The opportunity for independent third-party dispute resolution provided for in paragraph (1)(v) of this subsection may not be required to be exhausted before a member or member’s representative is allowed to file an appeal of a coverage decision under § 15-10D-02 of this title.

(6) Nothing in this subsection may be construed to:

(i) alter any requirement for a carrier to pay a hospital or related institution the rate approved by the Health Services Cost Review Commission for hospital services; or

(ii) supersede the Health Services Cost Review Commission’s jurisdiction or authority over rate review and approval for hospital services.