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Highlights of new health care legislation in Maryland

The Maryland General Assembly 2019 passed new health care legislation. Here are some highlights of the session:

Affordable Care Act
Next year’s Maryland tax return will include check boxes where, in addition to indicating health insurance status, individuals can choose whether they want the state to determine their eligibility for insurance affordability programs, such as Medicaid or subsidized care under the Affordable Care Act (ACA). That information will be provided to the Maryland Health Benefit Exchange, which in turn will help uninsured individuals enroll in insurance affordability programs.

The legislature also extended the reinsurance program enacted last year to stabilize premiums for, and thus encourage enrollment in, ACA health insurance plans. The reinsurance program was funded in part by a 2.75% tax on health insurers (called a “provider fee assessment”); that tax will continue to be levied on insurers through December 2023.

With the ACA facing court challenges about its constitutionality, the General Assembly extended the Maryland Health Insurance Coverage Protection Commission for an additional three years, through June 30, 2023, to monitor actions related to the ACA and to determine the best way for residents to obtain and retain health insurance independent of changes to federal law or interpretation of that law. The commission must report its findings in its annual report in December.

Certificates of need
This year, the General Assembly made a number of changes to certificate of need (CON) program requirements for health care facilities.

Effective Oct. 1, the threshold below which a CON is not required for certain hospital capital expenditures will increase from $10 million to a figure called the “hospital capital threshold,” defined as either 25% of a hospital’s gross regulated charges for the prior year or $50 million, whichever is less.

Also, certificates of need filed after Oct. 1 will be considered approved if they are uncontested and the Maryland Health Care Commission (MHCC) does not take final action within 120 days from when the CON application is docketed. This requirement does not apply to a CON involving the establishment or relocation of a health care facility, or a CON by a hospital introducing cardiac surgery or organ transplantation.

Effective immediately, existing, licensed general hospice programs and licensed intermediate care facilities that offer residential or intensive substance-related disorder treatment services are exempt from the requirement of obtaining a CON before changing bed capacity in those facilities. The facilities must still file a written notice to the MHCC of the intent to change bed capacity at least 45 days before the change.

The MHCC is now required to adopt a State Health Plan on or before Oct. 1 every year, as opposed to every five years, and the plan must be consistent with the Maryland All Payer Model Contract between the state and the federal Medicare program. On an annual basis, the MHCC will now assess each plan chapter, determine the chapters that should be reviewed and revised and, at a public meeting, establish a timeline and priority order for that review and revision.

Prescription drugs
On July 1, Maryland will be the first state with a Prescription Drug Affordability Board. The board is tasked with identifying potentially unaffordable prescription drugs and with making recommendations to the state legislature on costs and policy. Depending on the results of its study, the board may draft a plan to set upper payment limits on prescription drugs purchased or paid for by the state, or by a county or local government. If the board decides to draft a plan, it must do so on or before July 1, 2021. The plan will be phased in slowly, starting after January 2022.

The legislature also addressed issues of prior authorizations and formulary changes for prescription drugs. With respect to prior authorizations, any insurer, nonprofit health service plan or health maintenance organization (but not a Medicaid managed care organization) that provides prescription drug coverage through a pharmacy benefit must now maintain a database of prior authorizations that are filed electronically, provide detailed explanations for any denials of coverage, and honor prior authorizations granted by a previous carrier for at least the first 30 days of coverage by the new carrier.

Prior authorization requests must also indicate whether the prescription is for a chronic condition and, if so, a carrier may no longer request a reauthorization for a prescription for the lesser of either one year or for the standard course of treatment for the chronic condition.

As far as formulary changes, if these same carriers remove a drug from their formulary or move the drug to a higher tier, they must notify the member and member’s health care provider at least 30 days before the change. The carriers must also allow members to receive the recently removed off-formulary prescription drug or device if the prescriber determines that there is no equivalent in the formulary in a lower tier or that the lower-tier equivalent has been ineffective or likely to cause harm.

The new requirements for prior authorizations and formulary changes will apply to all policies, contracts and health benefit plans issued, delivered or renewed in Maryland on or after Jan. 1, 2020.

Additionally, with a successful evaluation from the Department of Legislative Services, the Prescription Drug Monitoring Program (PDMP) is no longer set to terminate in July.

Furthermore, starting Oct. 1, the PDMP is now required – not just authorized – to review prescription monitoring data. If there is an indication of misuse or a possible violation of the law or breach of professional standards by a prescriber or dispenser, the PDMP must notify and educate the prescriber or dispenser. If the PDMP finds that education would be inadequate to address the breach or violation, the PDMP may provide data to the Maryland Office of Controlled Substances Administration for investigation.

Barry F. Rosen, chairman and CEO of Gordon Feinblatt LLC, heads the law firm’s Health Care Practice Group and can be reached at 410-576-4224 or [email protected]. Sara J. Billard, a paralegal at Gordon Feinblatt, contributed to this article.