Gen. 53] 53

HEALTH MAINTENANCE ORGANIZATIONS

HEALTH INSURANCE – EMERGENCY MEDICAL SERVICES –

HMO LAW FORBIDS BALANCE BILLING OF HMO

MEMBERS FOR EMERGENCY AMBULANCE SERVICES

March 18, 2004

Mr. Alfred W. Redmer, Jr.

Insurance Commissioner

Maryland Insurance Administration

You have asked for our opinion on the application of the State

Health Maintenance Organization (“HMO”) law to the Baltimore

City Fire Department (“Fire Department”). Specifically, you ask

whether a provision that prohibits health care providers from directly

billing HMO patients applies to the Fire Department when it

provides emergency ambulance services.

In our opinion, the Fire Department may recover its fees from

the HMO for emergency ambulance services that are covered

services under the HMO plan. It may not bill the HMO member

directly for those services.

I

Balance Billing Prohibition of HMO Law

The Maryland Health Maintenance Organization Act (“HMO

law”) is codified at Annotated Code of Maryland, Health-General

Article (“HG”), §19-701 et seq. This law provides the statutory

basis for the familiar concept of an HMO, under which a member

pays a periodic fee to the HMO in return for the HMO’s promise to

provide or finance health care services for the member without

further charge, except for co-payments or deductibles set forth in the

HMO plan. See Riemer v. Columbia Medical Plan, Inc., 358 Md.

222, 228-33, 747 A.2d 677 (2000). 

Since the late 1980s, the Maryland HMO law has prohibited

health care providers from charging members of an HMO for a
54 [89 Op. Att’y

1

 The origin of the balance billing prohibition in the HMO law is

recounted in 83 Opinions of the Attorney General 128, 129-35 (1998).

2

 According to data gathered by the Maryland Institute for

Emergency Medical Services Systems (“MIEMSS”), in 2002 public safety

ambulances performed 337,362 out of a total of 554,972 ambulance

transports in the State. MIEMSS licenses commercial ambulance

providers; public safety ambulances are exempt from that requirement.

See Annotated Code of Maryland, Education Article, §13-515.

“covered service” provided to the member. HG §19-710(i), (p).1

This prohibition applies whether or not the provider is under contract

with the HMO; the contractual relationship simply affects the

amount of compensation due to the provider. See 88 Opinions of the

Attorney General ___ (2003) [Opinion No. 03-005 (March 13,

2003)], slip op. at pp.2-4. Thus, “subscribers or members owe no

debt to any health care provider (i.e., any doctor, hospital, etc.) for

any covered services.” Riemer, 358 Md. at 244. An HMO member

remains liable for co-payments and co-insurance as provided in the

HMO plan, as well as for any services not covered by the HMO plan.

HG §19-710(p)(3).

II

Ambulance Services

Emergency ambulance services are generally provided by a

local government agency or a volunteer fire and rescue company,

often in response to a 911 call. See Annotated Code of Maryland,

Public Safety Article, §1-304. Commercial ambulance services are

required to defer to the emergency medical services units of public

safety agencies in most emergencies. COMAR 30.09.07.04. More

than 60 percent of all ambulance transports in Maryland are done by

public safety ambulances.2

The Emergency Medical Services Division of the Baltimore

City Fire Department provides emergency ambulance services to

patients with life-threatening diseases or injuries. Since 1989, the

Fire Department has been authorized by a City ordinance to charge

a fee, set by the Board of Estimates, for such ambulance services.

Baltimore City Code, Article 9, §3-2. The fee may not exceed the

cost of providing the service. Id. The ordinance also provides that
Gen. 53] 55

an individual cannot be denied emergency services simply because

of an inability to pay the fee. Id., §3-3. The proceeds of the fee are

to be placed in a special fund for the sole purpose of supporting

emergency medical services in the City. Id., §3-4.

We understand that your inquiry arises from a situation in

which an HMO declined to pay the Fire Department the entire fee set

by ordinance for emergency ambulance services rendered to one of

the HMO’s members and the Fire Department billed the HMO

member for the remainder of the fee.

III

Analysis

A. Covered Service

As explained above, the prohibition against balance billing

applies when a provider furnishes a “covered service” to an HMO

member. The HMO law defines “covered service” as follows:

(d) “Covered service” means a health

care service included in the benefit package of

the health maintenance organization and

rendered to a member or subscriber of the

health maintenance organization by:

 (1) A prov ider under contract

with the health maintenance organization,

when the service is obtained in accordance

with the terms of the benefit contract of the

member or subscriber; or

 (2) A noncontracting provider

under §19-710.1 of this subtitle, when the

service is:

(i) Obtained in accordance with

the terms of the benefit contract of the

member or subscriber;

(ii) Obtained pursuant to a verbal

or written referral by:
56 [89 Op. Att’y

3

 Of course, as the definition makes clear, to qualify as a “covered

service”, the service must also be obtained in accordance with the terms

of the HMO plan or with the appropriate approval or authorization. This

element of the definition does not appear to be at issue in your inquiry. 

4

 It is also notable that the comprehensive standard health benefit

plan offered by HMOs for small employers in Maryland includes

emergency services and ambulance services. COMAR 31.11.06.03A(6),

(8). In addition, the federal Health Maintenance Organization Act of 1973

requires federally qualified HMOs to provide “medically necessary

(continued...)

 1. The hea lth maintenance

organization of the member or subscriber; or

 2. A provider under writte n

contract with the health maintenance

organization of the member or subscriber; or

(iii) Preauthorized or otherwise

approved either verbally or in writing by:

 1. The healt h ma inte nanc e

organization of the member or subscriber; or

 2. A provider under written

contract with the health maintenance

organization of the member subscriber.

HG §19-701(d) (emphasis added). Whether an emergency

ambulance transport provided by the Fire Department may be a

“covered service” depends on whether it is a “health care service”

for which the Fire Department is the “provider.”3

B. Health Care Service

Under the Maryland HMO Act, “health care services” mean

“services, medical equipment, and supplies that are provided by a

provider” and include ambulance services. HG §19-701(f)(1), (2)(i).

The HMO law itself does not prescribe all of the health care services

that an HMO must cover in its plan. It does specify that, by

definition, an HMO provides “health care services that include at

least ... emergency services....” HG §19-701(g)(2).4

 Emergency
Gen. 53] 57

4

 (...continued)

emergency services.” 42 U.S.C. §§300e(b) and 300e-1(c).

5

 “Emergency services” are defined as “those health care services

that are provided in a hospital emergency facility after the sudden onset of

a medical condition that manifests itself by symptoms of sufficient

severity, including severe pain, that the absence of immediate medical

attention could reasonably be expected by a prudent layperson, who

possesses an average knowledge of health and medicine, to result in: (1)

placing the patient’s health in serious jeopardy; (2) serious impairment to

bodily functions; or (3) serious dysfunction of any bodily organ or part.”

HG §19-701(e).

6

 Chapter 276, Laws of Maryland 1975.

7

See Annotated Code of Maryland, Education Article, §13-

515(a)(3)(ii) (excluding public safety ambulances from the definition of

(continued...)

services are defined in terms of health care services performed in a

hospital emergency facility.5

 It may well be that the Legislature did

not specifically include emergency ambulance transports provided

by public safety entities on the list of services covered by HMOs

because public entities did not generally charge fees for such

services when the HMO Act was originally enacted in 1975.6

However, given that the law includes ambulance services generally

within the term “health care services,” it is implicit that an HMO

plan would cover transportation to the hospital emergency facility by

ambulance when necessary – particularly when the emergency

services provided at the hospital are themselves “health care

services” that the HMO is required to provide under the HMO Act.

Accordingly, in our opinion, emergency ambulance service provided

by a public safety agency is a “health care service” for purposes of

the HMO Act.

C. Provider

Under the Maryland HMO Act, a “provider” is “any person ...

who is licensed or otherwise authorized in this State to provide

health care services.” HG §19-701(i) (emphasis added). As noted

above, ambulance services are included within the definition of

“health care services.” While the Fire Department is not subject to

the licensing requirements for ambulance services,7 it is clearly
58 [89 Op. Att’y

7

 (...continued)

“ambulance service” subject to licensing requirements).

8

 Although the HMO Act provides certain formulas for computing

(continued...)

“otherwise authorized” to provide those services. Thus, the Fire

Department’s status as a “provider” under the HMO Act turns on

whether it is a “person.”

As a general rule, neither the State nor its political subdivisions

are within the compass of legislation imposing obligations on

“persons.” See Nationwide Mutual Ins. Co. v. U.S. Fidelity &

Guaranty Co., 314 Md. 131, 141-42, 550 A.2d 69 (1988); Unnamed

Physician v. Commission on Medical Discipline, 285 Md. 1, 12-13,

400 A.2d 396 (1979); 85 Opinions of the Attorney General ___

(2000) [Opinion No. 00-001 (January 24, 2000)]. This general rule

of construction, which is derived from the doctrine of sovereign

immunity, does not apply when the statute manifests a legislative

intention to cover governmental entities, or there is no impairment

of sovereign powers and the particular provision enhances a

proprietary interest of the governmental unit. See 67 Opinions of the

Attorney General 380, 385-87 & n.7 (1982).

As is evident, the General Assembly contemplated that

emergency services generally, and the ambulance services necessary

to provide those services, would be part of the “covered services”

financed through HMOs. Emergency ambulance services are almost

exclusively provided by public safety entities, either government

entities or volunteer fire and rescue companies. Thus, it is consistent

with the legislative purpose underlying the HMO Act to include a

public safety entity like the Fire Department as a “provider” for

purposes of the HMO Act.

Construing the term “provider” to include the Fire Department

does not detract from the City’s sovereignty. If the Fire Department

were not considered a provider, there would be no basis for it to

receive payment from the patient’s HMO. As a provider, the Fire

Department becomes eligible for reimbursement of its fees by an

HMO when it transports a member of the HMO. Absent a contract

between the City and an HMO, this amount would presumably be the

fee set by ordinance.8 Thus, as a provider under the HMO law, the
Gen. 53] 59

8

 (...continued)

fees for non-contracting providers, they do not appear applicable to a

public safety entity whose fees are set by law. In particular, for a noncontracting provider that is not a hospital or a trauma physician, the HMO

Act prescribes a rate of payment by reference to what the HMO pays “a

similarly licensed provider” in the same geographic area for the same

covered service. HG §19-710.1(b)(1)(ii)(3). Apart from the question of

whether there can be a “similarly licensed provider” to a public safety

entity for which there is no licensing requirement, there is no indication

in this formula that the General Assembly intended to preempt a fee

established by a local government. By contrast, it is notable that the State

Medicaid law explicitly addresses fees charged bypublic safety entities for

emergency ambulance transport and sets a specific cap on reimbursements

paid by the Medicaid program. See HG §15-114.1 (public safety entity

that charges for services may receive up to $100 for the cost of

transportation and medical services from Medicaid program). 

Fire Department would have access to a more secure source of

payment than individual patients, many of whom may not be able to

afford the fee set by law. 

IV

Conclusion

In our opinion, when the Fire Department provides emergency

ambulance services to an HMO member, it acts as a “provider” of a

“covered service” for purposes of the State HMO law. Accordingly,

the Fire Department is entitled to collect from the HMO the fee set

by law; it may not seek payment from the HMO member.

J. Joseph Curran, Jr.

Attorney General

Robert N. McDonald

Chief Counsel

 Opinions & Advice