Case Title: Riemer v. Columbia Medical Plan

Citation: 358 Md. 222

Docket Number: 90/99

State: maryland

Court: Maryland Supreme Court

Date: 2000-03-10T00:00:00Z

Document:
Circuit Court for Howard County
Case # 13-C-96-31528
IN THE COURT OF APPEALS OF MARYLAND
No. 90
September Term, 1999
VICTOR G. RIEMER et al.
v.
COLUMBIA MEDICAL PLAN, INC.
Bell, C. J.
Eldridge
Rodowsky
Raker
Wilner
Cathell
Harrell,
JJ.
Opinion by Cathell, J.
Filed:   March 10, 2000
 While this case has been pending, members of CMP became members of Free State
1
Health Plan, Inc.  In this opinion, we will refer to the appellees as members of the HMO
under which this action was filed, CMP.   
 All reference, infra, to sections in the Health-General Article refer to the 1996
2
Replacement Volume or 1999 Cumulative Supplement, unless otherwise stated.
Appellants, Victor G. Riemer, Stephen Marx, and Janet Marx, are subscribers (or
members) of Columbia Medical Plan, Inc. (CMP),  appellee, a health maintenance
1
organization (HMO).  In their complaint, appellants allege that provisions in the contract
between CMP and its members, which purport to give CMP the right to recover the cost of
health care from third-party tortfeasors, are in direct violation of several provisions of the
Maryland Health Maintenance Organization Act, Maryland Code (1982, 1996 Repl. Vol.,
1999 Cum. Supp.), Title 19, subtitle 7, of the Health-General Article.    
2
This cause of action began with members of CMP receiving health care benefits from
CMP for injuries arising out of accidents due to negligent third parties.  In the instances
described, the members received medical benefits from CMP, then later received financial
settlements arising out of their accident claims from the third parties.  CMP then sought
reimbursement and/or subrogation recovery from the subscribers’ proceeds of their
settlements for the health care benefits it had provided.  On April 3, 1995, appellant Victor
Riemer received a sum of $10,000.00 to resolve a claim arising from an automobile accident.
CMP asserted a lien against this recovery, and Mr. Riemer paid $829.50 to CMP on June 20,
1995.  Similarly, appellants Stephen and Janet Marx received $18,000.00 to settle their tort
claims arising from a car accident involving their son, and CMP asserted a lien against this
recovery in excess of $2,600.00.  
-2-
On July 15, 1996, appellants, on their own behalf and on the behalf of a putative class
of similarly situated persons, filed a complaint in the Circuit Court for Howard County
against appellee.  In their complaint, appellants allege that appellee’s general policy of
pursuing its members for subrogation whenever they recover funds from a third party in a
tort action is illegal and improper under sections 19-701(f)(3) and 19-710(o) of the Health-
General Article.  They brought three causes of action: unjust enrichment/money had and
received; negligent misrepresentation; and a request for a declaratory judgment that appellee
breached its contractual, statutory, and common law obligations to appellants by claiming
improperly a subrogation interest in and a lien against third-party settlement recoveries by
appellants.   
On August 15, 1996, appellee removed this case to the United States District Court
for the District of Maryland.  Appellee contended that appellants’ state law challenges to the
CMP plan provisions were preempted by the Employee Retirement Income Security Act of
1974 (ERISA), 29 U.S.C. § 1001 et seq. (1994 & Supp. 1998), and that the provisions of the
Maryland HMO Act were thus void and without effect.  On December 24, 1997, the federal
court held that the CMP plan provisions were preempted with respect to all persons who
were members of CMP by virtue of employee benefit plans governed by the ERISA.
However, the court also held that there was no federal jurisdiction over those class members
who were not members of the CMP through an ERISA health plan, and remanded their
 Appellee appealed this decision to the United States Court of Appeals for the Fourth
3
Circuit.  The case was argued before the Fourth Circuit on January 25, 1999.  As of the filing
of this opinion, the Fourth Circuit has not issued its decision. 
-3-
claims to the Circuit Court for Howard County.3
Upon remand, appellee moved for the circuit court to stay all proceedings pending the
outcome of the federal appeal dealing with the ERISA preemption.  The circuit court denied
the motion.  Both parties then moved for summary judgment.  On March 24, 1999, the circuit
court granted appellee’s motion for summary judgment on all claims.  Appellants appealed
to the Court of Special Appeals.  On our own initiative, we granted review prior to argument
in the Court of Special Appeals.  Appellant presents three issues to this Court:
I.  Did the circuit court err by holding that the [appellee] HMO was permitted
to pursue its members for compensation after they received a payment from a
third party tortfeasor, when Md. Code Ann., Health-Gen. § 19-701(f)(3)
expressly forbids HMO’s from receiving any compensation except for
premiums, deductibles or co-payments.   
II.  Did the circuit court err by holding that the [appellee] HMO was permitted
to pursue its members for “subrogation,” which is the right to recover monies
spent to pay the debt of another, when Md. Code Ann., Health-Gen. § 19-
710(o) provides that HMO members owe no money (and thus have no debt)
for covered medical care that they receive from the HMO?  
III.  Did the circuit court err by finding that interpreting §§ 19-701(f)(3) and
19-710(o) to mean what they say would be “illogical, unreasonable, and
inconsistent with common sense,” because interpreting those provisions to
mean what they say would contradict the circuit court’s own policy
preferences?
 
II.  History of HMOs
In order to address the issues presented in the case sub judice, we must first establish
 The origins of the modern day HMO can be traced to the turn of the twentieth
4
century but such plans were relatively uncommon until the 1930s when they were created
in response to health care needs during the Great Depression.  Still, HMOs did not hit the
forefront of the medical community until the latter part of the twentieth century.  President
Richard M. Nixon’s endorsement of HMOs as a way of controlling health care costs in a
message to Congress on February 18, 1971, led to the Federal HMO Act of 1973.  The State
of Maryland followed shortly thereafter with the enacting of the Health Maintenance
Organization Act of 1975.  See generally Health Maintenance Organizations: An Analysis
of the HMO Industry in Maryland, Department of Legislative Reference (Nov. 1986).  In the
1980’s, HMOs began dominating the medical service industry.  
-4-
a basic definition of a health maintenance organization (HMO).  The Court of Special
Appeals took great lengths in defining an HMO in Patel v. Healthplus, Inc., 112 Md. App.
251, 258-60, 684 A.2d 904, 908-09 (1996):   
4
HMO is a generic term for prepaid health coverage plans that provide
medical services to a relatively large population at a fixed rate.  There are five
salient characteristics of HMOs.  
1) HMOs assume the contractual responsibilities for
providing health care services to subscribers (subscribers and
members are used interchangeably).  
2) HMOs are closed health care systems, providing
services only to a defined and enrolled clientele.  
3) Members are voluntarily enrolled.  
4) Payment [by the members] for care is fixed and
periodic.  
5) HMOs assume financial risk, which may level either
to a loss or a gain.  
Health Maintenance Organization[s], [An] Analysis of the HMO Industry in
Maryland, Research Division, Department of Legislative Reference,
Legislative Report Service, November 1986.
-5-
There are several models of HMOs in respect to the manner of
providing health services to members.  They include generally:  (1) Staff
Models—the HMO employs salaried health care professionals to provide
health care services; (2) Group Practice Model—the HMO contracts with a
private practice group to provide health services to members; (3) Independent
Practice Association—physicians create the HMO as an association of
physicians or individual physicians to provide health care to members usually
on a fee for service basis (the fees are fixed and the individual physician bears
the risk of loss if the cost of the service exceeds the fee schedule) but
sometimes on a capitation basis (a fee of X amount per applicable member of
the HMO); and (4) Network Model — the HMO contracts with one or more
physicians or group practices. 
Shickich defines [an] HMO as “‘an organization which brings together
a comprehensive range of medical services in a single organization.’” Barbara
A. Shickich, Legal Characteristics of the Health Maintenance Organization,
in Healthcare Facilities Law § 16.4 (Anne M. Dellinger ed., 1991) (footnote
and citation omitted).  She describes three characteristics of [an] HMO:
(1)
It is an organized system for the delivery of health care
which brings together health care providers.  
(2)
Such an arrangement makes available basic health care
which the enrolled group [the members or subscribers]
might reasonably require. . . .
 
(3)
The payments [to the HMO] will be made on a
prepayment basis, whether by the individual enrollee[ ]
. . . [or in his behalf by others, i.e., employers].
Id.  (footnote omitted).
As Shickich notes, [an] HMO is a vertical system of health care that
brings together the providers, i.e., the physicians, dentists, etc., who provide
medical services, and the subscribers, i.e., the members of the HMO or HMOs,
who receive the medical services. [An] HMO is a facilitator.  It arranges for
medical services.  In doing so, it enters into two or more basic contractual
relationships.  First, it agrees (contracts) to provide medical services, either
through its employee physicians or through providers under other contracts,
to its subscribers for a fixed fee which is paid by the subscribers to the HMO.
The HMO then . . . enters into a separate contract or contracts with physicians
-6-
(or dentists, etc.) for the physicians to provide the medical services the HMO
has agreed to provide to its members under their separate subscriber contracts.
Apparently, it is through its bulk buying power, i.e., its power to direct its
members, that it is able to procure medical services at or below otherwise
prevailing rates.  Additionally, it is presumed, by at least “for-profit” HMOs,
that large numbers of subscribers will not need medical services or that the
medical services provided to subscribers will cost less than the membership
fees received. [Footnotes omitted.]
An HMO thus can be described as “an organization that contracts to produce or to
arrange to buy a specific list of health services for a specified population of members in
exchange for a specified sum per person, paid periodically in advance.”  Alan Somers, What
You and Your Physician Client Need to Know About Managed Care Contracts, Prac. Law.,
Apr. 1996, at 22.  These basic descriptions are important as an HMO is defined in great part
by the nature of how it receives compensation, which is at the heart of the case sub judice.
III. Discussion
Appellee asserts that the payments at issue here constitute subrogation, which has
been defined as “[t]he substitution of one person in the place of another with reference to a
lawful claim, demand or right, so that he who is substituted succeeds to the rights of the other
in relation to the debt or claim, and its rights, remedies, or securities.”  Black’s Law
Dictionary 1427 (6th ed. 1990).  As this Court has said:
Subrogation is founded upon the equitable powers of the court.  It is
intended to provide relief against loss and damage to a meritorious creditor
who has paid the debt of another.  Milholland v. Tiffany, 64 Md. 455, 460, 2
A. 831 (1886).  The doctrine is a legal fiction whereby an obligation
extinguished by a payment made by a third person is treated as still subsisting
for the benefit of this third person.  Harford Bank v. Hopper’s Estate, 169 Md.
314, 324, 181 A. 751 (1935) (citing Aetna Life Ins. Co. v. Middleport, 124
U.S. 534, 8 S. Ct. 625, 31 L. Ed. 537 (1888)).  This third person succeeds to
-7-
the rights of the creditor in relation to the debt.  Finance Co. of Am. v. U.S.F.
& G. Co., 277 Md. 177, 182, 353 A.2d 249 (1976) (and cases cited therein);
[George L.] Schnader[, Jr., Inc. v. Cole Build. Co.], 236 Md. [17,] 22, 202
A.2d 326 [, 330 (1964)].  The rationale underlying the doctrine of subrogation
is to prevent the party primarily liable on the debt from being unjustly enriched
when someone pays his debt.  Security Ins. Co. v. Mangan, 250 Md. 241,
246-47, 242 A.2d 482 (1968).  See also 10 S. Williston, A Treatise on the Law
of Contracts § 1265 at 845 (W. Jaeger 3d ed. 1967):
“The object of subrogation is the prevention of injustice.  It is
designed to promote and to accomplish justice, and is the mode
which equity adopts to compel the ultimate payment of a debt
by one, who, in justice, equity, and good conscience, should pay
it.  It is an appropriate means of preventing unjust enrichment.
The doctrine of subrogation is applied to . . . do equity in the
particular case under consideration.”  
Since a person entitled to subrogation stands in the shoes of the creditor, he is
ordinarily entitled to all the remedies of the creditor, and he may use all the
means which the creditor could employ to enforce payment.  Poe v. Phila.
Casualty Co., 118 Md. 347, 352-53, 84 A. 476 (1912).  This means that a
subrogee can enforce the obligation of a guarantor of the debtor.
Bachmann v. Glazer, 316 Md. 405, 412-13, 559 A.2d 365, 368-69 (1989).  
Appellee makes these demands for restitution or subrogation compensation pursuant
to the “Third Party Liability” provision of its subscribers policy, which, as relevant hereto,
provides as follows:
If a member is injured or becomes ill through an act of omission or
commission of a third party, the Plan will provide care as for any other injury
or illness.  Acceptance of such services will constitute consent to the
provisions of this section.
If such member receives payment from such [a] third party, by suit or
settlement, the member is obligated to reimburse the Plan for the reasonable
cash value of the services and supplies provided under this Health Benefits
Certificate. 
 There may be separate “co-payment” or “deductible” provisions provided for in the
5
statutes.  See infra.
-8-
. . . .
The member must take such action, furnish such information and assistance,
and execute such instruments as the Plan may require to facilitate enforcement
of its rights under this provision.  The member must agree to take no action
prejudicing the rights and interests of the Plan under this provision.
If the Plan so decides, it may be subrogated to the member’s right to the extent
of the benefits received under this contract.  This includes the Plan’s right to
bring suit against the third party in the member’s name.
We hold that generally, pursuant to sections 19-701(f) and 19-710(b) and (o) of the
Health-General Article, and the general statutory scheme of Maryland’s Health Maintenance
Organization Act, an HMO may not pursue its members for restitution, reimbursement, or
subrogation after the members have received a financial settlement from a third-party
tortfeasor, any contract to the contrary notwithstanding.  Restitution, reimbursement, and
subrogation provisions are contrary to the express wording of subtitle 7 of Title 19 of the
Health-General Article.  Moreover, they are in conflict with the basic nature of HMOs based
on subscriber per fee services.  Under the basic concept of HMOs, a subscriber has no
further obligation, primary or otherwise, beyond his or her fee for health services provided.5
Accordingly, there is, in any event, nothing for an HMO to be subrogated to.  The subscriber
is not a primary debtor.  The HMO, as to the fees paid health care providers, i.e., doctors,
hospitals, etc., is the primary debtor.  We hold that the trial court erred on all three issues and
accordingly, we reverse.
-9-
A.  Section 19-701(f)
Section 19-701(f) of the Health-General Article defines a health maintenance
organization (HMO) as  
any person, including a profit or nonprofit corporation organized under the
laws of any state or country, that:
(1) Operates or proposes to operate in this State;
(2) Except as provided in § 19-703(b) and (f) of this subtitle, provides
or otherwise makes available to its members health care services that include
at least physician, hospitalization, laboratory, X-ray, emergency, and
preventive services, out-of-area coverage, and any other health care services
that the Commissioner determines to be available generally on an insured or
prepaid basis in the area serviced by the health maintenance organization, and,
at the option of the health maintenance organization, may provide additional
coverage;
(3) Except for any copayment or deductible arrangement, is
compensated only on a predetermined periodic rate basis for providing to
members the minimum services that are specified in item (2) of this subsection
. . . . [Emphasis added.]
Section 19-710(b) provides explicitly “the applicant [for a certificate to operate as an HMO]
shall conform to the definition of a health maintenance organization.”  (Emphasis added.)
Section 19-712 (“Powers and authority of health maintenance organization.”) provides
in part:
[A] person who holds a certificate of authority to operate a health maintenance
organization . . . may:
(3) Provide health care services on a prepaid basis . . . . [Emphasis
added.] 
Section 19-729 (“Prohibited acts; remedies.”), provides that an HMO may not: 
-10-
(1) Violate any provision of the subtitle . . .
. . . .
(7) Fraudulently obtain . . . any benefit under this subtitle;
(8) Fail to fulfill the basic requirements to operate as a health
maintenance organization as provided in § 19-710 of this subtitle . . . .
Section 19-710(b), as we have said, contains a requirement that HMOs conform to the
definition of an HMO.  Accordingly, the statutes, by their language, expressly require an
HMO to limit its payments or money from subscribers to the fixed prepaid periodic fee or
rate.  
We commence our further analysis of section 19-701(f) by attempting to ascertain the
intent of the Legislature.  As we said in State v. Bell, 351 Md. 709, 717-19, 720 A.2d 311,
315-16 (1998):   
We have said that “[t]he cardinal rule of statutory interpretation is to
ascertain and effectuate the intention of the legislature.”  Oaks v. Connors, 339
Md. 24, 35, 660 A.2d 423, 429 (1995).  Legislative intent must be sought first
in the actual language of the statute.  Marriot Employees Fed. Credit Union
v. Motor Vehicle Admin., 346 Md. 437, 444-45, 697 A.2d 455, 458 (1997);
Stanford v. Maryland Police Training & Correctional Comm’n, 346 Md. 374,
380, 697 A.2d 424,427 (1997) (quoting Tidewater v. Mayor of Havre de
Grace, 337 Md. 338, 344, 653 A.2d 468, 472 (1995)); Coburn v. Coburn, 342
Md. 244, 256, 674 A.2d 951, 957 (1996); Romm v. Flax, 340 Md. 690, 693,
668 A.2d 1, 2 (1995); Oaks, 339 Md. at 35, 660 A.2d at 429; Mauzy v.
Hornbeck, 285 Md. 84, 92, 400 A.2d 1091, 1096 (1979); Board of Supervisors
v. Weiss, 217 Md. 133, 136, 141 A.2d 734 (1958).  Where the statutory
language is plain and free from ambiguity, and expresses a definite and simple
meaning, courts do not normally look beyond the words of the statute to
determine legislative intent.  Marriot Employees, 346 Md. at 445, 697 A.2d at
458; Kaczorowski v. Mayor of Baltimore, 309 Md. 505, 515, 525 A.2d 628,
633 (1987); Hunt v. Montgomery County, 248 Md. 403, 414, 237 A.2d 35, 41
(1968).
-11-
. . . .  
This Court recently stated that “statutory language is not read in
isolation, but ‘in light of the full context in which [it] appear[s], and in light
of external manifestations of intent or general purpose available through other
evidence.’” Stanford v. Maryland Police Training & Correctional Comm'n,
346 Md. 374, 380, 697 A.2d 424, 427 (1997) (alterations in original) (quoting
Cunningham v. State, 318 Md. 182, 185, 567 A.2d 126, 127 (1989)).  To this
end,
[w]hen we pursue the context of statutory language, we
are not limited to the words of the statute as they are printed . .
. .  We may and often must consider other “external
manifestations” or “persuasive evidence,” including a bill’s title
and function paragraphs, amendments that occurred as it passed
through the legislature, its relationship to earlier and subsequent
legislation, and other material that fairly bears on the
fundamental issue of legislative purpose or goal, which becomes
the context within which we read the particular language before
us in a given case.
  
. . . [I]n State v. One 1983 Chevrolet Van, 309 Md. 327,
524 A.2d 51 (1987), . . . [a]lthough we did not describe any of
the statutes involved in that case as ambiguous or uncertain, we
did search for legislative purpose or meaning—what Judge Orth,
writing for the Court, described as “the legislative scheme.”  [Id.
at] 344-45, 524 A.2d at 59.  We identified that scheme or
purpose after an extensive review of the context of Ch. 549,
Acts of 1984, which had effected major changes in Art. 27, §
297.  That context included, among other things, a bill request
form, prior legislation, a legislative committee report, a bill title,
related statutes and amendments to the bill.  See also Ogrinz v.
James, 309 Md. 381, 524 A.2d 77 (1987), in which we
considered legislative history (a committee report) to assist in
construing legislation that we did not identify as ambiguous or
of uncertain meaning. 
Kaczorowski, 309 Md. 514-15, 525 A.2d at 632-33 (some citations omitted).
[Alterations in original.]  
As we noted, supra, HMOs, in general, are defined in substantial measure by the
-12-
nature of how they receive compensation.  This characteristic of HMOs, as we have seen,
has been codified in Maryland.  It is apparent from the plain wording of section 19-701(f)
that in Maryland, the means by which an HMO is paid for its services is an integral and
limiting part of its definition.  The language of this provision is clear and unambiguous and
under section 9-710(b), HMOs must conform to that language.  Pursuant to section 19-
701(f)(3), HMOs are only permitted to receive compensation from their subscribers in one
of three forms: co-payments, deductibles, and a pre-determined and prepaid periodic fee.
When appellee asserted reimbursement and subrogation claims against appellants and
collected money from their respective settlements, it was clearly being compensated in a
form not provided for in section 9-710(f)(3).  Compensation is defined as “recompense in
value.”  Black’s Law Dictionary, supra, 283 ; see Tierney v. Van Arsdale, 332 S.W.2d 546,
549 (Ky. Ct. App. 1960) (“The word ‘compensation’ in common, general usage is broad
enough to include recompense of expenses.”); Goodrich Falls Elec. Co. v. Howard, 86 N.H.
512, 519, 171 A. 761, 765 (1934) (“Compensation is payment for value in money.”).  The
$829.50 paid by Mr. Riemer and the $2,600.00 paid by Mr. and Mrs. Marx to appellee can
be seen as nothing else than additional compensation for the health care benefits that
appellee had previously provided.  An HMO, by its statutory definition is limited to
compensation in one of the three forms outlined in section 19-701(f)(3).  A copayment is “a
relatively small fixed fee required of a patient by a health insurer (as an HMO) at the time
of each outpatient service or filling of a prescription.”  The Merriam-Webster Dictionary 177
(1994).  A deductible is defined as “[t]he portion of an insured loss to be borne by the
 Paragraph (1) of Article 43, section 842 mirrors the language of current section 19-
6
703(b)(2). 
-13-
insured before he is entitled to recovery from the insurer.”  Black’s Law Dictionary, supra,
413.  A pre-determined periodic premium is a fixed payment for a specific amount of time,
which is paid in advance for potential health care needs.  The so-called reimbursement-
subrogation manner of compensation sought by appellee in its contract does not fall into any
of these three accepted forms and the inclusion of such a provision in member contracts,
which takes the arrangement out of conformance with the statute, is in violation of the
Maryland HMO Act.   
 
Further insight as to what the Legislature intended concerning compensation of HMOs
can be gathered by an analysis of the Legislative history.  Section 19-701 was derived from
Maryland Code (1957, 1971 Repl. Vol., 1979 Cum. Supp.), Article 43, section 842.  In its
original wording, section 842, stated in relevant part that an HMO is  
any organization that operates or proposes to operate in Maryland, including
a profit or nonprofit corporation organized under the laws of another country,
state, or the District of Columbia, which:
. . . . 
(2) Is compensated (except for any copayment or deductible
arrangements) for the provision of the minimum services specified in
paragraph (1)  of this subsection to members solely on a predetermined
[6]
periodic rate basis. [Emphasis added.]
       
House Bill 200 of 1982 served as part of an ongoing revision of the Annotated Code of
Maryland, specifically creating the Health-General Article.  As the Bill File states, “[t]he
-14-
Primary Purpose of its work is modernization and clarification, not policy making.”  This
Court has previously addressed the general rules of construction to be applied by the courts
when analyzing a general bulk revision of this nature.  We said:  
It is true that a codification of previously enacted legislation,
eliminating repealed laws and systematically arranging the laws by subject
matter, becomes an official Code when adopted by the Legislature, and, since
it constitutes the latest expression of the legislative will, it controls over all
previous expressions on the subject, if the Legislature so provides.  However,
the principle function of a Code is to reorganize the statutes and state them in
simpler form.  Consequently, any changes made in them by a Code are
presumed to be for the purpose of clarity rather than change of meaning.
Therefore, even a change in the phraseology of a statute by a codification
thereof will not ordinarily modify the law, unless the change is so radical and
material that the intention of the Legislature to modify the law appears
unmistakably from the language of the Code.
Welch v. Humphrey, 200 Md. 410, 417, 90 A.2d 686, 689 (1952) (citing Welsh v. Kuntz, 196
Md. 86, 97, 75 A.2d 343, 347 (1950)); see also Bureau of Mines v. George’s Creek Coal &
Land Co., 272 Md. 143, 154-55, 321 A.2d 748, 754-55 (1974); Baltimore Tank Lines v.
Public Service Comm’n, 215 Md. 125, 127-28, 137 A.2d 187, 189 (1957).  Further evidence
that this change of wording was not meant to change the meaning of the statute is the
wording included in the Revisor’s Note to Maryland Code (1982), section 19-701 of the
Health-General Article, which states that with the exception of deleting the former reference
to the District of Columbia, “[t]he only other changes are in style.”  
The older wording included in Article 43, section 842 combined with the fact that any
changes were purely for clarification or style leaves little doubt that the original intent behind
this provision was to limit the nature of the compensation of entities seeking certification as
 “Only” is defined as “[s]olely; merely; for no other purpose; at no other time; in no
7
otherwise; alon[e]; of or by itself; without anything more; exclusive; nothing else or more.”
Black’s Law Dictionary, supra, 1089; see also Missouri-Kan.-Tex. R.R. Co. v. Whitaker, 489
S.W.2d 348, 349 (Tex. Civ. App. 1972) (“While, as applied to a quantity of anything [only]
means so much and no more, without anything more, etc.”); Hiner v. Hugh Breeding, Inc.,
355 P.2d 549, 551 (Okla. 1960) (“The word ‘only’ is defined as: Alone in its class, sole,
single, exclusive, solely, this and no other, nothing else or more.”); Ex parte Salhus, 247
N.W. 401, 402 (N.D. 1933) (“‘[O]nly’ means exclusively, solely, merely, for no other
purpose, at no other time, in no other wise.”); Moore v. Stevens, 106 So. 901, 904 (Fla. 1925)
(“‘[O]nly’ . . . is synonymous with the word ‘solely,’ or the equivalent of the phrase ‘and
nothing else.’”).  
-15-
health maintenance organizations.  In fact, the original wording strongly demonstrates the
intent of the Legislature to create a health care structure that was compensated “solely on a
predetermined periodic rate basis.”  (Emphasis added.)  The inclusion in former Article 43,
section 842 of the parenthetical acknowledges only two exceptions to this general rule: that
compensation could be accepted in the alternative forms of only “(. . . copayment or
deductible arrangements).”  (Emphasis added.)  The words “only” and “solely” can be
interpreted no other way.  To do so would run afoul of both the proper construction of the
English language and the apparent intent of the Legislature.7
As we stated, supra, more insight into Legislative intent can be obtained by looking
at the entire statutory scheme of Title 19, subtitle 7 of the Health-General Article.  For
example, section 19-702 states in relevant part:
In adopting this subtitle, the General Assembly intends to:
(1)  Provide alternative methods for the delivery of health care services
to residents of this State, with a view toward achieving greater efficiency and
economy in providing these services;  
-16-
(2)  Encourage the formation of health maintenance organizations that
provide health care services to subscribers or groups of subscribers who
contract for these services under a system of prepayments . . . . [Emphasis
added.] 
    
Furthermore, section 19-712(a) states in relevant part:
[A] person who holds a certificate of authority to operate a health maintenance
organization under this subtitle may: 
. . . .
(3) Provide health care services on a prepaid basis through licensed
providers of these services who are under contract with or employed by the
health maintenance organization. [Emphasis added.] 
Moreover, section 19-729 states in relevant part:
(a) Prohibited acts.  A health maintenance organization may not: 
. . . . 
(8) Fail to fulfill the basic requirements to operate as a health
maintenance organization as provided in § 19-710 of this subtitle.  
Section 19-710(b), as we have said, requires HMOs to “conform” to the definitions.  This
combination of mandatory provisions emphasizes the Legislature’s intent to have an HMO
act as an HMO.  Not only did it define mandatory characteristics of an HMO, it enacted an
additional provision requiring HMOs to conform to those definitions and enacted another
section demonstrating that noncompliance with the basic definition of an HMO was
prohibited and subject to penalties under section 19-730 of the Health-General Article.
 
There are sections in subtitle 7 that create an exception to an HMO’s limitation on
compensation.  For example, section 19-712.5, passed as an emergency measure, states in
-17-
relevant part:
(e) Payments from member or subscriber for nonemergency. —
Notwithstanding any other provision of this article, a hospital emergency
facility or provider or a health maintenance organization that has reimbursed
a provider may collect or attempt to collect payment from a member or
subscriber for health care services provided for a medical condition that is
determined not to be an emergency as defined in § 19-701(d) of this subtitle.
Evidently, the Legislature determined that an HMO may collect or attempt to collect
payment, other than then periodic payment, from a subscriber only in the rare situation when
the HMO has paid a provider for an uncovered nonemergency service.  The Legislature
recognized that, absent this extraordinary circumstance, an HMO could not seek such
reimbursement from a member.  The entire statutory scheme emphasizes that an HMO, by
its definitions, provides health care services on a prepaid basis. 
Subtitle 7 of Title 19 of the Health-General Article is dedicated to the formation of
Health Maintenance Organizations.  It is evident from the wording included throughout this
subtitle that it was the intent of the Legislature to promote health care services, which were
both affordable and efficient.  The Legislature viewed a system of prepayments as
instrumental to achieving that goal.  There is no other reason for including section 19-
701(f)(3).  The plain and unambiguous wording of both the old and new version of this
statute clearly limits compensation to HMOs to three formats: a predetermined periodic rate
basis, copayments or a deductible arrangement.  The language of section 19-701(f)(3) cannot
be interpreted to include payment to an HMO by means of other methods, whether
subrogation, restitution, or reimbursement.  The Legislature recognized this limitation on
-18-
compensation: that is the rationale for the exception allowing for an alternative form of
compensation in regards to the granting of emergency services and by enacting several
provisions requiring conformance with the statutory definitions of an HMO and prohibiting
acts inconsistent with those defining statutes.  Accordingly, we hold that the trial court erred
by ruling that appellee was permitted to pursue its members for subrogation, restitution, or
reimbursement after they received a settlement from third-party tortfeasors.  Such
compensation directly contradicts the express wording of section 19-701(f)(3).
B.  Section 19-710(o)
In their appeal, appellants also rely on section 19-710(o) of the Health-General
Article, which states:
(o) Enrollee not liable for covered services; exceptions. — (1) Except
as provided in paragraph (3) of this subsection, individual enrollees and
subscribers of health maintenance organizations issued certificates of
authority to operate in this State shall not be liable to any health care provider
for any covered services provided to the enrollee or subscriber.
(2) (i) A health care provider or any representative of a health
care provider may not collect or attempt to collect from any subscriber or
enrollee any money owed to the health care provider by a health maintenance
organization issued a certificate of authority to operate in this State.
     (ii) A health care provider or any representative of a health
care provider may not maintain any action against any subscriber or enrollee
to collect or attempt to collect any money owed to the health care provider by
a health maintenance organization issued a certificate of authority to operate
in this State.
(3) Notwithstanding any other provision of this subsection, a
health care provider or representative of a health care provider may collect or
attempt to collect from a subscriber or enrollee:
-19-
    (i) Any copayment or coinsurance sums owed by the
subscriber or enrollee to a health maintenance organization issued a certificate
of authority to operate in this State for covered services provided by the health
care provider; or
    (ii) Any payment or charges for services not covered under the
subscriber’s contract. [Emphasis added.]
 
Similarly, section 19-710(h) provides:
(h) Hold harmless clause. — (1) The terms of the agreements between
a health maintenance organization and providers of health services shall
contain a “hold harmless” clause.
(2) The hold harmless clause shall provide that the provider may
not, under any circumstances, including nonpayment of moneys due the
providers by the health maintenance organization, insolvency of the health
maintenance organization, or breach of the provider contract, bill, charge,
collect a deposit, seek compensation, remuneration, or reimbursement from,
or have any recourse against the subscriber, member, enrollee, patient, or any
persons other than the health maintenance organization acting on their behalf,
for services provided in accordance with the provider contract.
(3) Collection from the subscriber or member of copayments or
supplemental charges in accordance with the terms of the subscriber’s contract
with the health maintenance organization, or charges for services not covered
under the subscriber’s contract, may be excluded from the hold harmless
clause.
(4) Each provider contract shall state that the hold harmless
clause will survive the termination of the provider contract, regardless of the
cause of termination.
These sections explicitly provide that subscribers or members owe no debt to any health care
provider (i.e., any doctor, hospital, etc.) for any covered services.  Accordingly, except for
section 19-712.5, subscribers or members cannot be primary debtors.  These provisions do
not directly concern the relationship between an HMO and one of its members, but they do
 We do not here address any matters relating to third-party beneficiary issues.
8
-20-
relate to the rationale that the Legislature did not want members of HMOs to be retroactively
liable for covered services.  As we stated, supra, an HMO typically contracts with two
distinct entities: its members and health care providers.  While the relationship between a
member, an HMO, and a provider may at first appear “to be a triangular relationship with the
HMO at the apex, it is really two-sided — right (member) and left (provider) both meet at
the apex (HMO) but with no contractual base line between the [member] and the provider.”
Patel, 112 Md. App. at 260-61, 684 A.2d at 909.  
8
Section 19-710(o) specifically concerns itself with the relationship between an HMO
subscriber or member and a health care provider.  It provides that a subscriber is not liable
for monies owed to a health care provider by the HMO.  It does not concern itself with the
relationship between the member and the HMO because an HMO is not considered a health
care provider.  Group Health Ass’n, Inc. v. Blumenthal, 295 Md. 104, 110, 453 A.2d 1198,
1203 (1983) (“Under the statutory definition of [an] HMO . . . it is neither a hospital nor a
related institution.  Consequently, it is clear from the plain meaning of the Health Care
Malpractice Claims Act that [an] HMO, itself, is not included within the definition of health
care provider.”).  
Section 19-710(h) requires a hold harmless clause in the contract between an HMO
and its health care providers stating that a health care provider may not seek compensation,
renumeration, or reimbursement from the member.  Yet, in the case at bar, appellee seeks to
 In some contracts between HMOs and health care providers, there may be provisions
9
(continued...)
-21-
do indirectly what providers cannot do directly.  Because an HMO is a health care service,
which is compensated “only” through a predetermined rate basis, copayment, or deductible
arrangement, it stands to reason that the Legislature did not feel the need to address an
HMO’s right to pursue a member for payments for services already received: by the
definition of an HMO, that type of reimbursement cannot occur.  
One of the purposes of both 19-710 (o) and 19-710 (h) is consumer protection.  If a
member prepays the HMO for health care and receives what he or she has already paid for,
a service received from a health care provider and covered by the health care contract, and
the HMO does not pay the provider, the provider cannot then turn around and seek payment
from the member.  Under the same rationale, if a member prepays the HMO for health care
and receives a service from a health care provider covered by the health care contract, and
the HMO pays the provider, and then the member receives money from a third-party
tortfeasor responsible for the injuries, the HMO cannot then seek payment from the member.
Moreover, as we have said, the subscriber or member is not a primary debtor.  He or she is
not a debtor at all, but has already paid for services rendered.  Upon their prepayment they,
generally, have fully performed all of their financial obligations under an HMO subscriber
agreement as limited by the Maryland statutes.  The payment by the HMO to the health care
providers is the payment of the primary debt of the HMO to the health care providers, with
which the HMO separately contracts.  The rationale is simple: generally,  there is no debt
9
(...continued)
9
that result in period (year) end audits, where, depending upon a provider’s inability to
minimize costs to the HMO, the provider may be required to return sums to the HMO.  These
types of provisions are not relevant to the issues before us in this case.
-22-
owed the HMO under either contract (subscriber with HMO or HMO with health care
provider).  
It cannot be reasonably maintained that an HMO, in this case, appellee, even has a
general right of subrogation for “paying the debt” of the third-party tortfeasor, because
appellee’s action in providing covered medical services did not reduce or relieve any
obligations of the third-party tortfeasor.  The third-party tortfeasor is liable to the injured
victim for his or her damages regardless of whether the victim, an HMO, or any other insurer
has paid for that medical care.  See Plank v. Summers, 203 Md. 552, 557, 102 A.2d 262, 266-
67 (1954).  The member contracted with the HMO to provide health services and the HMO
provided them.  The fact that the member has now received additional monies from a third
party does not give the HMO an avenue to go after those monies.  If the Legislature took
measures to protect subscribers or members from health care providers that were actually
owed money by an HMO for services rendered, they plainly intended to protect members
from HMOs to whom no money was owed.         
As noted, supra, we can gather more insight into Legislative intent by looking at the
entire statutory scheme.  At the time of the occurrences here at issue, there were two sections
within Title 19, subtitle 7 that discuss subrogation and reimbursement.  Neither section
applies to the facts of the case sub judice.  Section 19-706.1, concerning rehabilitation or
-23-
liquidation of HMOs, states in relevant part: 
(h) Certain claims of subrogation prohibited. — (1) A health care
provider may not assert a claim of subrogation against:
(i) A member of an insolvent health maintenance organization;
or
(ii) Against any individual, organization, or government agency
which has made payments to the health maintenance organization on behalf of
a member.
Section 19-706.1, like section 19-710(o), demonstrates the Legislature’s continued
reluctance to allow a health care provider to seek reimbursement from a member of an HMO
for services provided by the HMO.  The Legislature recognized that circumstances could
arise where an HMO may become insolvent and unable to make payments for health care
services rendered to an HMO member from a health care provider.  This statute prohibits a
provider from seeking compensation directly from the member.  Although this statute does
not specifically concern the HMO-subscriber relationship, it does support our general
conclusion that the Legislature did not want a subscriber to be retroactively liable for
services for which he or she has already paid a predetermined fee. 
Section 19-710.2 of the Health-General Article, concerning payment to a health care
provider not under a written contract, provides in relevant part: 
(b) In general. — (1) In addition to any other provisions of this subtitle,
for a covered service rendered to an enrollee of a health maintenance
organization by a health care provider not under written contract with the
health maintenance organization, the health maintenance organization or its
agent:
(i) Shall pay the health care provider within 30 days after the
-24-
receipt of a claim in accordance with the applicable provisions of this subtitle;
and
(ii) Shall pay the claim submitted by:
     1. A hospital at the rate approved by the Health Services Cost
Review Commission; and 
    2. Any other health care provider at the rate billed or at the
usual, customary, and reasonable rate.
     (2) A health maintenance organization that pays a health care
provider at the usual, customary, and reasonable rate:
(i) Except for services rendered to medical assistance recipients
or for services rendered under a contract entered into under § 1876 (g) of the
federal Social Security Act (42 U.S.C. § 1395mm), may not use Medicare,
Medicaid, or workers’ compensation payments as part of any methodology
used to determine a payment at the usual, customary, and reasonable rate; and
(ii) On request of the health care provider, shall disclose the
methodology used to determine the amount of payment.
(c) Reimbursement. — (1) A health maintenance organization may not
seek reimbursement from an enrollee for any payment under subsection (b) of
this section for a claim or portion of a claim submitted by a health care
provider and paid by the health maintenance organization that the health
maintenance organization determines is the responsibility of the enrollee.
This section demonstrates that the Legislature, in the HMO statute, has expressly
limited reimbursement to this specified circumstance and circumstances relating to
emergency care, see supra.  Only if the HMO pays a provider for a service not covered by
the subscriber contract, may it thereafter seek reimbursement.  With these two exceptions
and the one we discussed in Roberts, infra, under a different statute, section 15-120,
everywhere reimbursement or subrogation was referenced in the Maryland Health
-25-
Maintenance Organization Act at the time here at issue, the Legislature has provided strict
wording that protects the HMO subscriber from the health care provider.  It is apparent that
the steps taken by the Legislature were designed to prevent an HMO subscriber from being
retroactively liable for prepaid medical services.
Although Maryland Code (1982, 1996 Repl. Vol., 1998 Cum. Supp.), sections 19-
710(o) and 19-710(h) of the Health-General Article generally do not apply to the case at bar,
we note that their construction, as well as the construction of the entire article, is in
congruence with the entirety of the public policy established by the Legislature in subtitle
7 of Title 19, which intends to keep the health care system in Maryland efficient and
affordable by limiting compensation to HMOs to predetermined rates, copayments, or
deductibles, and to protect HMO members from liability for prepaid health services already
rendered.  The contractual provisions for reimbursement incorporated into the subscriber’s
contracts are contrary to the public policy of this State, and are thus null and void.     
C.  Roberts v. Total Health Care, Inc.
We recently had the opportunity to address HMO subrogation rights in cases limited
to services provided as part of a Medical Assistance Program.  Roberts v. Total Health Care,
Inc., 349 Md. 499, 709 A.2d 142 (1998).  Our opinion was carefully structured to apply only
to the Medical Assistance Program.  We relied on a specific statutory provision not
applicable here in order to allow the HMO to recover under a theory of subrogation.  Title
15 of the Health-General Article relates to Medical Assistance Programs only.  It does not
apply to HMOs outside the scope of Medical Assistance Programs.  Accordingly, Maryland
-26-
Code (1982, 1994 Repl. Vol., 1999 Cum. Supp.), section 15-120 of the Health-General
Article “grants the State a right of subrogation to any cause of action which a program
recipient has against a third party for payment of medical services.”  Roberts, 349 Md. at
503, 709 A.2d at 144.  (Emphasis added).  Section 15-120(a) provides that: 
If a Program recipient has a cause of action against a person, the Department
shall be subrogated to that cause of action to the extent of any payments made
by the Department on behalf of the Program recipient that result from the
occurrence that gave rise to the cause of action.
   
Section 15-120 represents a portion of “the State of Maryland’s effort to comply with the
federal law on medical assistance, which requires states to seek reimbursement for medical
assistance payments made where a third party is legally liable for that medical care.”
Roberts, 349 Md. at 504, 709 A.2d at 144.  
The very existence of section 15-120 of the Health-General Article demonstrates that,
even in respect to personal injury claims, subrogation is a right that the Legislature knows
how to grant.  This section created a statutory right of subrogation in the State; a private
health maintenance organization’s right to enforce a subrogation claim pursuant to section
15-120 is based on the derivative claim that the State has a legal right to assign its statutory
right to other parties.  Roberts, 349 Md. 499, 709 A.2d 142, was premised in substantial part
on the government’s “strong interest in keeping its Medicaid program as efficient as possible
and limited to its function of being the payor of last resort.”  Roberts, 349 Md. at 519, 709
A.2d 152.  This supports our holding that there is no general right to reimbursement or
subrogation under circumstances such as exist in the case at bar. 
-27-
Prior to 1981, HMOs in Medical Assistance Programs were required to “determine
whether the enrollee has third-party coverage, [to] seek recovery from that source for any
medical services rendered, and [to] refund the payments, excluding Medicare, to the
Department.”  COMAR 10.09.16.09C (1980).  In 1981, COMAR was amended and HMOs
that paid out medical assistance claims were permitted to keep any funds recovered from
subrogation.  According to the Secretary of Health and Mental Hygiene, the 1981
Amendments were made
to achieve equity in payments to health maintenance organizations.  Medical
Assistance rates for these organizations are calculated on the assumption that
collections from liable third parties will help defray the cost of services to
Medical Assistance enrollees.  To require instead that these collections be
refunded to the Department is to place an undue financial burden on the
organization.
8 Md. Reg. 355 (1981).  The exception carved out by section 15-120 and subsequent
COMAR provisions is a specific subrogation exception that applies only to HMOs when the
payments are made as part of a Medical Assistance Program.  The intent is to allow the State
to continue to provide low cost health care to the Medical Assistance Program enrollees by
keeping overall costs down.  By allowing the HMO to act as an agent of the State, rates for
the program are kept down.  This, in turn, keeps the costs of federally funded Medicare and
Medicaid programs down.  Only under this set of circumstances has Maryland, in respect to
services covered under HMO plans, allowed for subrogation for HMOs in respect to personal
injury claims under circumstances based on its relationship with its subscribers.  This is not
 In its motion for summary judgment, CMP made no effort to demonstrate that its
10
subrogation recoveries are used to reduce premium or to argue that, as a result, the
subrogation recoveries are permitted as part of the predetermined periodic rate basis under
HG § 19-701(f)(3).
 There was a recodification of certain sections of the Health General Article in 1999
11
Maryland Laws, Chapter 702.  What is now section 19-133(k) was formerly section 19-
1501(h).
-28-
the same set of circumstances as the case sub judice.10
D. Section 11-112 of the Courts & Judicial Proceedings Article 
Appellee points out 1999 Maryland Laws, Chapter 590, which became effective on
October 1, 1999.  The title to Chapter 590 states that it is for “the purpose of requiring that
the amount for which certain persons have a right of subrogation for health care benefits or
services paid or payable on behalf of an injured person be reduced by a certain amount
related to the amount of attorney’s fees incurred by the injured person in a personal injury
claim . . . .”  Chapter 590 created Maryland Code (1974, 1998 Repl. Vol., 1999 Cum. Supp.),
section 11-112 of the Courts & Judicial Proceedings Article, which applies to “payors,” as
defined in section 19-133(k)  of the Health-General Article, including HMOs.
11
New section 11-112(b)(1) of the Courts & Judicial Proceedings Article then states that
it “applies to any right of subrogation under a contract or applicable law for payment of
health care benefits or services for an injured person paid or payable by a payor . . . if the
amount of the subrogee’s claim . . . is voluntarily paid by the injured person from the injured
person’s recovery in a claim for personal injury.”  Appellee argues that, by passing Chapter
590, “the General Assembly confirmed that . . . HMOs may, through a contractual
 When a subrogation claim can be made, the attorney’s fee is deducted
12
proportionately from the injured person’s damage recovery and up to one-third of the
subrogee’s claim.  See § 11-112(c).
-29-
agreement, be subrogated to their members’ claims against tortfeasors.” 
We disagree with this interpretation.  The intent behind section 11-112 does not
appear to be the “confirmation” of a right of subrogation for HMOs, but to protect a
plaintiff’s recovery from being subjected to both the full amount of a health insurer’s
subrogation claim, if they have the right to a subrogation claim, and the insured’s attorney’s
full fee.   First we note that this provision is not a part of Health General Article, subtitle
12
7, “Health Maintenance Organizations.”  Instead it is part of the general provisions relating
to “Judgments” of the Courts Article.  The language of the act states that it applies to “any
right of subrogation under a contract or applicable law . . . .”  This necessarily implies that
is directed to such rights that are created by valid contracts.  More important, the purpose of
the statute is not to create subrogation rights, but to limit subrogation rights that do validly
exist, in such a fashion that such payments, if validly permitted, take into account the
attorneys fees and expenses of the injured party.  Our review of the legislative history of the
new statute confirms our belief that it was a statute designed to limit subrogation rights, not
to extend them.  The inclusion of the language relating to a definition in another statute that
included health maintenance organizations, recognized, we suspect, that there were some
persons involved in the process, who believed that such rights existed, or might exist, and
were attempting to insure that if they existed, they were included in the limitations being
 Now section 19-133(k).
13
-30-
imposed.
1999 Maryland Laws, Chapter 590 was Senate Bill 653.  The genesis of this issue
however was in the House of Delegates, not the Senate.  The precursor to Senate Bill 653
was House Bill 91.  Its precursor was House Bill 927 filed in the 1998 session, but not
enacted into law.  House Bill 927's precursor was House Bill 258 filed, but not enacted, in
1997.
As first presented, House Hill 258 purported to add a new section to the Courts
Article, section 11-111.  As introduced there was no reference to describing “payor” as
having the same meaning as in Health General Article, section 19-1501.  The bill merely
provided that it applied, generally,  to any right of subrogation for payment of health care
benefits.  It then limited any such rights as did exist.  Neither the Bill Analysis nor the Fiscal
Report referred to any particular entity as having specific rights to subrogation.  By the third
reader, the reference to “Payor” being as defined in section 19-1501(h)  of the Health-
13
General Article was in the bill.  The bill file contains no reference to its origin.  Even at this
point there was no specific reference to contractual rights.  House Bill 258 was passed by the
House, but never enacted.
The same proposal was introduced in 1998, House Bill 927, but failed to be enacted.
Then in 1999 House Bill 91 was introduced in the House.  A companion bill, Senate Bill 653
was introduced in the Senate.  Most of the limited legislative history of these two bills is
-31-
found in the bill file in respect to HB 91.  The Bill Analysis in respect to HB 91 states that
it was intended to limit rights of subrogation.
Currently, there is no law that reduces the amount a health insurer or other
payor may collect based on the percentage of the personal injury claim that the
party pays for attorney’s fees.
. . . . 
The bill reduces the amount a subrogee may recover for health care benefits
paid or payable [on] behalf of an insured injured person . . . . 
It then noted that the bill only applied where the injured person had voluntarily paid the
subrogee’s claim. 
This bill file also contains a recommendation for passage by the Maryland Bar
Association providing, in relevant part:
The bill reduces the amount recoverable in subrogation proportionately
to the attorney’s fees incurred by the injured party in pursuing the recovery of
damages that led to the fund for reimbursement of the benefits paid by the
insurance carrier. 
In suggesting a deletion the Bar Association stated “the purpose of the proposal . . .
is to get more of the amount of the total recovery for the injured party, not the subrogee.” 
The Senate and House bill files contain identical Bill Analyses that note in their
summary that:
This bill requires a reduction of the amount which may be recovered by a
payor (i.e., subrogee) in a subrogation claim against an injured person for
health care benefits paid or payable by a payor on behalf of the injured person
. . . .
 
It is clear that the purpose of the act was not to extend subrogation rights to entities
 Regardless of our interpretation of the legislation, Chapter 590, section 2 states that
14
the new law “shall be construed only prospectively.”  Thus, if the Legislature was
recognizing a right of medical claim subrogation for HMOs, the lack of any previous mention
of such a “right” in the statutes means that it has only been legislatively recognized as of
October 1, 1999, long after the alleged subrogation claims in this case were made.
-32-
that were statutorily limited to methods of compensation, HMOS, but to limit such rights that
some of the entities defined as “payors” in section 19-133(k), might have.  Entities such as
health insurers, non-profit health service plans, and third-party administrators as defined in
section 19-133(k).  The Act was not intended to extend subrogation rights where none
existed.
If the Legislature assumed such a right existed for HMOs, its assumption was an
erroneous one.  We have held, supra, that, except for Medical Assistance Programs, HMOs
have no right of subrogation to personal injury damages claims.  In light of the current
statutory scheme relating to HMOs, only a statute specifically creating a right to subrogation
by HMOs or a statute removing the limitations on compensation could create a right to
subrogation, contractual or otherwise.  
14
E.  Subrogation in the Annotated Code of Maryland 
Looking at other articles of the Maryland Code, we have noticed that the Legislature
has frequently addressed the issue of subrogation.  The Legislature knows how to grant a
right to subrogate if it chooses to do so.  As we noted in our discussion of Roberts, supra,
Title 15 of the Health-General Article concerns Medical Assistance Programs.  Besides
 Maryland Code (1982, 1994 Repl. Vol., 1999 Cum. Supp.), section 15-102.2 makes
15
section 19-706.1 of the Health-General Article applicable to Managed Care Organizations
in the same manner as it applies to HMOs. 
 Maryland Code (1982, 1994 Repl. Vol., 1999 Cum. Supp.), sections 15-120, 15-
16
121.1, 15-121.2, and 15-121.3 all discuss Maryland’s right of subrogation and right to assign
subrogation claims in Medical Assistance Programs.
 Subtitle 4 of Title 8 of the Business Regulation Article establishes the Home
17
Improvement Guaranty Fund.  Section 8-410(a)(1) specifically provides “[a]fter the
[Maryland Home Improvement] Commission pays a claim from the Fund: (i) the
Commission is subrogated to all rights of the claimant in the claim up to the amount paid.”
 Title 12 of the State Government Article concerns state immunity and liability.
18
Section 12-318 grants Maryland a right of subrogation to the extent that a state “officer or
employee is awarded money in an action for false arrest, malicious prosecution, or other
cause that arises from the investigation or charges.” 
-33-
section 15-120, subtitle 1 of Title 15 also concerns subrogation in sections 15-102.2,  15-
15
121.1, 15-121.2, and 15-121.3.   The existence of these statutes in comparison to the HMO
16
statutes supports our reasoning that HMOs generally have no right to subrogation claims
against subscribers and are only granted an exception, by statute, to do so under unique
circumstances not present here.  
The remainder of subrogation statutes outside the Health-General Article primarily
deal with one of three issues: (1) special provisions for the State government, (2) commercial
law, or (3) insurance.  The statutes that expressly provide for subrogation for State
government include: Maryland Code (1992, 1998 Repl. Vol.), section 8-410 of the Business
Regulation Article,  Maryland Code (1984, 1999 Repl. Vol.), section 12-318 of the State
17
Government Article,  and Maryland Code (1957, 1996 Repl. Vol., 1999 Cum. Supp.),
18
 Section 828 is located in the Criminal Injuries Compensation section of Article 27.
19
Maryland Code (1957, 1996 Repl. Vol.), Article 27, section 816, spells out the intent of
these provisions: “[t]he legislature finds and determines that there is a need for government
financial assistance for . . . victims of crime.”  Section 828 provides that the State is
subrogated “to recover payments on account of the losses resulting from the crime with
respect to which the award is made.”   
 Maryland Code (1975, 1997 Repl. Vol.), section 4-407 of the Commercial Law
20
Article recognizes a payor bank’s right to subrogation on improper payment. 
 Subtitle 3 of Title 12 concerns credit provisions of consumer loans.  Maryland Code
21
(1975, 1990 Repl. Vol.), section 12-309(d) of the Commercial Law Article states that “[t]he
lender is subrogated to each right and remedy which the borrower has against the seller.” 
 Subtitle 4 of Title 15 of the Commercial Law Article concerns assignment of debts
22
in debt collection.  Section 15-401 of the Commercial Law Article states: “If a surety in any
bond or other obligation for the payment of money or a promissory note, or the endorser of
a protested draft, pays or tenders the money due on it in full, he is entitled to an assignment
of it and, by virtue of the assignment, may maintain an action in his name against the
principal debtor.”  
-34-
Article 27, section 828.   All three of these sections grant the State a right to recover money
19
that it may pay out as part of a State funded program.  The statutes that concern commercial
law include: sections 4-407,  12-309,  and 15-401  of the Commercial Law Article.  The
20
21
22
 Subtitle 3 of Title 9 of the Insurance Article sets the guidelines for the Property and
23
Casualty Insurance Guaranty Corporation.  Maryland Code (1997), section 9-309(d) involves
an insurer’s unpaid obligation and states that “[a]n insurer may not assert a claim of
subrogation against an insured of an insolvent insurer, but may assert a claim against the
receiver of the insolvent insurer.”  This section protects “insureds” much in the way that the
HMO statute protects subscribers.
 Subtitle 4 of Title 9 of the Insurance Article is the Life and Health Insurance
24
Guaranty Corporation Act.  Section 9-407(i)(3) states that “[t]he Corporation is subrogated
to the rights assigned under this subsection against the assets of the impaired insurer.”   
 Title 19 of the Insurance Article concerns Property and Casualty Insurance. 
25
Subtitle 1 of this title provides us with further insight concerning subrogation in medical
expense claims.  Section 19-109 states:
§ 19-109. Subrogation of medical expense payments prohibited.   
On or after January 1, 1972, an authorized insurer may not issue or
deliver a policy or contract of bodily injury liability insurance on a motor
vehicle that is principally garaged or principally used in the State when the
policy or contract is issued or delivered if:
(1) the policy or contract contains a representation that the
authorized insurer will pay all reasonable medical expenses incurred for bodily
injury caused by an accident to the insured or another individual covered by
the policy or contract; and
(2) the authorized insurer retains the right of subrogation to
recover from a third party any amount paid under the policy or contract on
behalf of the injured individual. [Emphasis added.] 
The original wording of the statute, prior to recodification in the Insurance Article, helps
clarify the intent of this subsection.  Maryland Code (1957, 1972 Repl. Vol.), Art. 48A,
section 481B provided:
§ 481B. Subrogation of medical payment claims prohibited.   
(continued...)
-35-
statutes that concern insurance include: sections 9-309,  9-407,  19-109,
23
24
25
(...continued)
25
On or after January 1, 1972, no policy or contract of bodily injury
liability insurance, which contains any representation by an insurance
company that the company will pay all reasonable medical expenses incurred
for bodily injury caused by accident to the insured or any relative or other
person coming within the provisions thereof, shall be issued or delivered by
any insurer licensed in this State upon any motor vehicle then principally
garaged or principally used in this State, if such insurer retains the right of
subrogation to recover any amounts paid on behalf of an injured person under
the provision of the policy from any third party. [Emphasis added.]
This provision expressly denied a right of subrogation in insurance policies providing
coverage for motor vehicle accidents that include provisions where the insurer also agrees
to pay the insured’s medical expenses.  Pursuant to this statute, subrogation clauses in such
contracts are prohibited.  Additionally, in the wording of 1971 Maryland Laws, Chapter 550,
the language of the bill originally applied to a “policy or contract of bodily injury liability
insurance, or of property damage liability insurance.” (Emphasis added.)  This section,
combined with the fact that language extending anti-subrogation to property claims was
eliminated, supports our general conclusion that the Legislature may not have wanted to
extend subrogation rights to the realm of personal injury claims.
  
 Subtitle 5 of Title 19 of the Insurance Code concerns motor vehicle insurance.
26
Section 19-507(d) states that “[a]n insurer that provides the benefits described in § 19-505
[personal injury protection coverage] of this subtitle does not have a right of subrogation and
does not have a claim against any other person or insurer to recover any benefits paid
because of the alleged fault of the other person in causing or contributing to a motor vehicle
accident.”  Section 19-511(d)(1) states that “[p]ayment as described in subsection (c) of this
section shall preserve the uninsured motorist insurer’s subrogation rights against the liability
insurer and its insured.”  
 Title 20 of the Insurance Article establishes the Maryland Automobile Insurance
27
Fund.  Section 20-515 concerns recovery of money owed to the Fund and expressly grants
the Fund a right to subrogation from a claimant against a responsible party where the Fund
has made a payment to a claimant.  Section 20-609 also grants the Fund a right of
subrogation “against the driver or owner of the motor vehicle by which the accident was
occasioned.”
-36-
19-507, 19-511,  20-515, and 20-609  of the Insurance Article.  
26
27
-37-
By looking to some of the portions of the Maryland Code we have just described,
which concern themselves with subrogation, we conclude that the Legislature recognizes
subrogation as a potential remedy designed to provide relief against loss and damage to a
party who has paid the debt of another.  But, in the Maryland HMO Act, the Legislature has
limited the use of this remedy to unique factual circumstances not present here.  The
numerous exceptions where it does grant such a right and the fact that it does not grant such
a right to HMOs in the Maryland Health Maintenance Organization Act, leads us to conclude
further that the Legislature did not intend for HMOs to have general subrogation rights
against members or subscribers.
IV.  Conclusion
We hold that generally, pursuant to sections 19-701(f) and 19-710(b) and (o) of the
Health-General Article, and the general statutory scheme of Maryland’s Health Maintenance
Organization Act, an HMO may not pursue its members for restitution, reimbursement, or
subrogation after the members have received damages from a third-party tortfeasor.  We hold
that the trial court erred on all three issues presented and, accordingly, we reverse.  The trial
judge also erred in not rendering a declaratory judgment.  We have repeatedly noted that a
declaration must be made when requested.
JUDGMENT REVERSED; CASE REMANDED
FOR FURTHER PROCEEDINGS CONSISTENT
WITH THIS OPINION; COSTS TO BE PAID BY
APPELLEE.   
Victor G. Riemer et al. v. Columbia Medical Plan, Inc. 
No. 90, September Term 1999
Headnote:
Generally, pursuant to Maryland Code (1982, 1996 Repl. Vol., 1999 Cum.
Supp.), sections 19-701(f) and 19-710(b) and (o) of the Health-General
Article, and the general statutory scheme of Maryland’s Health Maintenance
Organization Act, an HMO may not pursue its members for restitution,
reimbursement, or subrogation after the members have received a payment
from a third-party tortfeasor.  The trial court erred on all three issues. 
Accordingly, we reverse.