Gen. 53] 53 HEALTH MAINT ENANCE ORGANI ZATI ONS H E ALTH I NSURANCE

– E MERGENCY M EDICAL S ERVICES

– HMO L AW F ORBIDS B AL ANCE B ILLING OF HMO M EMBERS FOR E MERGENCY A MBULANCE S ERVICES

March 18, 2004
Mr. Alfred W. Redm er, Jr. Insurance Commissi oner Maryland InsuranceAdministration You have asked for our

opinion on t

he appli cati on of the State He alth Maintenance Organi zati on (“HMO ”) law to th e Baltimo re City Fire De partmen t (“Fire Dep art ment ”). Specifically, you ask whethera provision that prohibi ts health care provi ders fro m d irectly bill ing HMO patie nt s appl ie s t o the Fi re De partmen t wh en it provides emergency ambulance services.
In our opini on, the Fire Depart ment mayrecover

its fees from the HM O for emergencyambulance ser vices t hat are covered servi ce s u nder the HMO plan. It may not bi ll t

he HM O member directly for those services.
I Balance Bill ing Prohibit ion of HMO Law The M aryland H ealth Maintenance Organi zati on Act ( “H MO law”) is codi fied at

Annotated Code of Maryl and, Healt h-General Article (“HG ”), §1 9-701 et seq. This law provides the statutory ba sis for the famili ar concept of an HM O, under which a member pa ys a periodi c fee to the HM O in return for the H MO ’s prom ise to provide or fina nce h ealth c are ser vices for th e m ember without further charge, except for

co-payments ordedu ctibles se t forth in the HMO plan. See Riemer v. Columbia Medical Plan, I nc ., 358 Md. 222 , 228 -33 , 747 A.2 d 67 7 (2 000 ). Since the late 1980s, the Maryl an d H MO law has prohibited health care provi ders fr om cha rging mem bers of an HM O fo r a54 [89 O p. 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 Ac co rd in g t o d at a g at he re d b y th e M ar yl and In stitute for Emergency

Medical Services Syste

ms (“MIEMSS”), in 2002 public safe ty ambulances performed 337,362 out of a total of 554,972 ambulance transpor ts in the State . MIEMS S li censes commercial ambulance providers; public safety a mbulances are exempt from that requireme nt. SeeAnnotated Code of Mary land, Education Article, §13-515. “coveredservi ce” provi de d to the mem ber. HG §19-71 0(i), (p). 1 This prohibi tion appl ies whether or not the provi der is under contr act with the HMO ; the c ontract ual rel ations hip si mply af fects t he amount of co mp ensa tion du e to the p rov ider

. See 88 Opinions of the AttorneyGeneral

___ (2003) [Opini on No. 03-005 (March 13, 2003)], sli p op. at

pp.2-4. Thus, “subs criber s or members owe no debt to any he alt h c are provide r ( i.e

. , any doctor, hospit al, etc. ) for anycovered ser

vices. ” Riemer, 358 Md. at 244. An HM O member remains liable fo r co-p aymen ts and co-ins uran ce as p rovid ed in the HMO plan, as well as fo r any se rv ic es not

co ve re d by

th e HMO plan. HG §19-71 0(p)(3).
II

Ambu lance Servi ces Emergencyambulance ser vices ar e g en er all y pr ov id ed by a local go ve rn m en t ag en cy or a vo lu nt ee r f ire an d r es cu e c om pa ny, often in respons e to a 911 call. See Annotated Code of Maryl and, Pub lic Safety

Articl e, §1-304. Commercial ambulance services are requir ed to defer

to the emergency

medical s ervice s units o f pu blic safety agencies in most emer gencies. COM AR 30.09.07.04. Mo re than 60 percent

of all ambulance tr ansport s in Mary landare done by public safety

ambulances. 2 The Eme rgency M edical Service s Division o f the Ba ltimore City Fire D epartm ent pro vides eme rgen cy amb ulanc e serv ices to patien ts with li fe-thr eateni ng di sea ses or i njuri es. Si nce 1989, t he Fire Department has been author izedby a City ordinance to charge a fee, se t by

the Boa rd of Estimates, for such ambulance services. Baltimore City Code, A rt icle 9, §3-2. The fee may not exceed the cost of p rov idin g th e se rvic e. Id

. The ordinance a lso provi des thatGen. 53] 55

an indivi dual cannot

be denie d em ergen cy service s simp lybecause of an ina bility to p ay the fee

. Id. , §3- 3. The p roceeds o f the fee are to be placed in a special fund for the sole purpose of su ppo rtin g em erg enc y med ical s erv ices in th e C ity. Id. , §3-4. We und erstan d th at y our in quiry arises from a situatio n in which an HM O d ecline d to pay t he Fire Depart

ment the entire fe e set by ordinance for emergency ambulance ser

vices r endered t o one of the HMO’ s me mb er s an d t he Fi r e D ep ar

t me nt bi l l ed t he HMO member for the r emainder of t he fee.
III An alys is A. Covered Servic e As expla ined a bov e, the p rohib ition ag ainst b alanc e bill ing applie s wh en a prov i de r fur ni s he s a “ co ve r ed s er vi ce ” to an H MO member. The H MO law defines “covered service” as follows:

(d) “C overed servi ce” means a health care servi ce include d in the be nefit package of the he al th maintenanc e organization and rendered to a m embe r or subs criber of the health maintenance organization by : (1) A prov id er under contrac t with the heal th maint ena nc e organiz ation, when the ser

vice i s obtai ned in accor dance w ith the te rms of the bene fit c ontract of the member or subscr iber; or (2) A nonc ontract ing pr ovide r under §19-710.1 of this su btitl e, when the service is: (i) Obtainedin accordance with the terms of t

he benefit

contrac t of the mem ber or subs criber; (ii) Obtainedpursuant to a verba l or w ritt en re fe rra l b y:56 [89 O p. Att’y

3 Of course, as the de finition ma kes clea r, to qualify as a “ covered service”, the service must also be obtained

in accor dance w ith the ter ms of the HMO pl an or with

the appropriate approval or authorization. This element of the definition does not appear to be at issue in y our inquiry.

4 It is also notable that the comprehens ive stand ard hea lth benef it planoffere d by

HMOs for

small empl oye

rs in Maryland includes emergency

services and ambulance services. COMAR 31.11.06.03A(6), (8). In addition, the federal He alth Maintenance Organization Act of 1973 requires fede ral ly qualified HMOs to provide “ medically nec essary (continued...) 1. The hea lth maintenanc e organization of t

he member or subscriber; or 2. A provider unde r writte n contrac t with the he alth mai nten an c e organizationof the member or s ubscri be r ; or (iii) Preautho r izedor otherwise ap pr ov ed eit he r v er ba lly o r in w riti ng by: 1. The h eal t h ma inte nanc e organizationof the membe r or subscriber; or 2. A provider un d er w ritte n contrac t with the he alth mai nt en anc e organization o f the me mber su bscriber. HG §19-70 1(d) (emp hasis adde d). Wh ether an em ergency ambulance trans port pr ovided by the F ir e De partment

may be a “coveredservi ce” depends on whether it i s a “heal th care servi ce” for wh ich th e Fi re D epa rtme nt is th e “p rov ider .” 3
B. Health Care Service Under the M arylan d H M O A ct, “ h ealth care ser vices” mean “services, medical equipment, and suppl ies th at a re pr ov id ed by a provider” and incl ude ambulance ser vices. HG §19-701( f)(1), (2)(i ). The HMO law its elf does not prescr ibe al l of the health care ser vices that an HM O mu st cover in i ts pl an. It does speci fy t

hat, by defini tion, an HM O provides “health car e servi ces that include at least

. .. emerge ncy services....” HG § 19-701 (g)(2). 4 EmergencyGen. 53] 57

4 (...continued) emergency

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

5 “Emergency

service s” are d

efined as “those health

care services that are provided in a hospitalemergency facility afte

r the sudden

onset of a medical condition that manifests itself by sy mptoms of sufficient se ve ri ty, including severe pain, that the absence of immediate medical attentioncould reasonably be expected by a

prudent layperson, who possesses anaverage knowledge of health and medicine, to result in: (1) placingthe patient’s health in serious jeopardy ; (2) serious impairme nt to bodily functions; or (3) serious dysfunction of any bodily orga

nor part.” HG §19-701(e).

6 Chapter 276, Laws of Mary land 1975.

7 SeeAnnotate d Code of M ary land, Edu

cation Ar

tic le, §13- 515(a)( 3)(ii)(excludin

g public safety ambulances from the definition of

(continued...) servi ces are de fined in term s of h ealth c are ser vices p erfor med in a hospit al em er ge nc y fa cil ity. 5 It may well be that the L egislatu re did not specifi call y i nclude emer g ency ambulance tr ansport s provide d by pub li c s af

ety en ti ti es on t

he li st of se rv ic es co ve re d by

HMOs because public e ntities did no t genera lly charge fees for such servi ces wh en th e HMO Act was origi nally enacted i n 1975. 6 How ever, given that the law in clude s am bulan ce serv ices ge nerally wi thi n th e t erm “h ea lt

h c ar e s ervi ce s, ” i t i s i mpl ic it th at an HMO plan would cover tr ansport ation to the hospi tal emergency facil ity by ambulance wh en nec essary – parti cularly when the e mergency servi ces prov ided a t th e hos pital are themselve s “health care services” that t

he HM O is requi red to pr ovide und er the H M O A ct. A cc or di ng ly, in our opi nion, e mergenc y ambulan ce servi ce provide d by a pub lic safety agency is a “health ca re servi ce” for purpos es of the H M O A ct. C. Provider Under the M aryland H M O A ct, a “provide r” is “ an y person ... who is licensed or otherwis e authori zed in thi s Stat e to prov id e health care serv ices .” HG §19 -701 (i) (emphasis added). As not ed above, amb ulanc e serv ices are includ ed w ith in t he defini tion of “hea lth care ser

vices. ” While the Fi re Department is not su bject to t he licensing requir ements for ambulance services, 7 it is clearl y58 [89 O p. 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 tho se services. Th us, the Fire Dep artment’s st at

us as a “ pr ovi de r” und er th e HMO Act turns on wh ethe r it is a “ per son .” As a gen eral rule , neither the S tate nor its political subdivi sions are w ithi n the compass of l egisl ation imposing obli gations o n “pe rson s.” See Na tion wid e M utu al In s. C o. v. U .S. Fide lit y & Gu aran ty Co ., 314 Md. 131, 141-42, 550 A.2d 69 (1988); Unnamed Physici an v. Commission on Medical Disci pline , 285 Md. 1, 12- 13, 400 A.2 d 39 6 (19 79); 8 5 Opini ons of t he Attorne

y General___ (2000) [O pin ion No . 00- 001 (Jan uar y 24, 2 000 )]. This gene ral rule of con stru ct io n, whi ch i s de ri vedfr om th e doctrine of soverei gn im m un ity, does not ap ply wh en the sta tute manifest s a legi slat ive intention to cover gove rnmentalentities, or there is no i mpairment o f sover eign powers and the particular provision enhances a proprietary inter est of t

he gov ern me ntal u nit. See 67 Opinions of the AttorneyGeneral380, 385 -87 & n.7 (1982 ). A s is evi dent, the GeneralAssembly c ontemplat ed t ha t emergency

servi ces general ly , and the ambulance services nece ssary to provide t

hose servi ces, would be part of t he “ covered services” financedthrough HM Os. Emergency ambu lance services are al most exclu sively provi ded by publ ic safe ty entities, eithe r government entities or volunt eer fi re and res cue companies. Thus, it is consi stent with the le gisl ative purpose under ly ing the HMO A ct to include a pub lic sa fe ty

en ti ty like th e Fire De partmen t as a “provider” f or purp oses o f the H M O A ct. Construi ng the te rm “provider” to inc lude the Fire Depart ment does not detr act fr om the City ’s sover eignty . If t he Fire Depart

ment were not consi dered a provi der, the re w ould be no basis for it to recei ve payment from the patient’s H MO . As a provider, the F ire Departmentbeco mes eligible for reim burse men t of it s fees by an HMO when it tr ansport s a member of the HMO . Absenta contra ct between th e Ci ty

an d a n HMO, this amount would presumably be the fee set by or dinance. 8 Th us , as a p r ov i de r un de r t he HMO law, theGen. 53] 59

8 (...continued) fees for non-cont

ractingproviders, they do not appe ar applicable to a publicsafety e

ntity whose fees a

re set by law . In particular, for anoncontracting

provider that is not a hospital or a trauma physician, the HMO Act prescribes a rate of pay

ment by refe

rence to what the HMO pay s “a similarly licensed provider” inthe same geog raphic a rea 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 publ ic safety entity for which there is no licensing requirement, ther e is no in dication inthis fo rmu la that the General Assembly intended to preempt a fee established

by a local government. By contrast, it

is notable

that the Sta

te Medicai d law explicitly addresses fee s charged by public sa fety entities for emergency

ambulance transport and sets a specific ca p onreimburs ements paid by the Medicaid pr

ogra m. See H G §15-114 .1 (public safety entity that charges for service s may rec eive up to $ 10 0 for the cost of transportation and medical services from Medicaid prog ram). Fire De partm ent would have acc ess to a more secure s ource of payment than individual patient s, many of wh om may no t be ab le to afford the fee s et by la w. IV Conclusion In our opini on, when the Fire Depart ment provides emergency ambulance servic es to an H M O m emb er, it acts as a “provi der” of a “coveredservi ce” for purpos es of t he St at e H MO law . A cc or di ng ly, the Fire D epartm ent is ent i t l ed t o c ol l ec t fr om t he HMO the fee s et by law; it may not seek p ayment from the HM O m embe r.
J. Joseph C urran, Jr. AttorneyGeneral Ro bert N . Mc Do nald Chief Counsel Opinions & Advi ce