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*hb0772*
HOUSE BILL 772
J3, J1 (6lr2474)
ENROLLED BILL
— Health/Finance —
Introduced by Delegates Shetty, Ruff, Bagnall, Cullison, Edelson, Forbes, Guzzone,
S. Johnson, D. Jones, and McCaskill McCaskill, Alston, Hill, Kaufman,
Lopez, Martinez, Rosenberg, Ross, Taveras, White Holland, and Woorman
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at ________________________ o’clock, ________M.
______________________________________________
Speaker.
CHAPTER ______
AN ACT concerning 1
Workgroup on Behavioral Health Rate Methodology Modernization – 2
Workgroup Establishment and Study 3
FOR the purpose of requiring the Maryland Department of Health, rather than the 4
Behavioral Health Administration and the Medical Care Programs Administration, 5
to conduct a certain rate –setting study; requiring the Department to review and 6
implement certain recommendations an d administer certain tools and oversee 7
certain submissions required to support a certain study; requiring the Maryland 8
Health Care Commission to assist the Department with the facilitation of a certain 9
study; altering the date by which the rate–setting study is to be completed; requiring 10
the Secretary of Health, or the Secretary’s designee, to designate a representative of 11
the Administration to be a certain technical liaison; authorizing the Commission, 12
rather than the Department, to require community provi ders to submit certain 13
2 HOUSE BILL 772
information for the completion of a certain report; altering certain requirements 1
related to the submission of a certain interim report and when certain annual reports 2
must be submitted; establishing the Workgroup on Behavioral Healt h Rate 3
Methodology Modernization in the Maryland Health Care Commission to develop 4
certain reimbursement methodologies for certified community behavioral health 5
clinics and, outpatient mental health centers, and independent outpatient providers; 6
and generally relating to behavioral health rate methodology modernization. 7
BY repealing and reenacting, with amendments, 8
Article – Health – General 9
Section 16–201.3(e) and (h) 10
Annotated Code of Maryland 11
(2023 Replacement Volume and 2025 Supplement) 12
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
That the Laws of Maryland read as follows: 14
Article – Health – General 15
16–201.3. 16
(e) (1) IN THIS SUBSECTION , “COMMISSION” MEANS THE MARYLAND 17
HEALTH CARE COMMISSION. 18
[(1)] (2) [The Behavioral Health Administration and the Medical Care 19
Programs Administration jointly ] ON OR BEFORE JUNE 30, 2028, THE DEPARTMENT 20
shall: 21
(i) Conduct an independent cost –driven, rate –setting study to set 22
community provider rates for community–based behavioral health services that includes a 23
rate analysis and an impact study that considers the actual cost of providing 24
community–based behavioral health services; 25
[(ii) Develop and implement a payment system incorporating the 26
findings of the rate –setting study co nducted under item (i) of this paragraph, including 27
projected costs of implementation and recommendations to address any potential shortfall 28
in funding; and] 29
(II) REVIEW AND IMPLEMENT THE RECOMMENDATIONS OF THE 30
WORKGROUP ON BEHAVIORAL HEALTH RATE METHODOLOGY MODERNIZATION 31
ESTABLISHED BY CHAPTER ____ (H.B. 772) OF THE ACTS OF THE GENERAL 32
ASSEMBLY OF 2026; AND 33
(III) ADMINISTER COST –REPORTING TOOLS AND OVERSEE 34
COST–REPORT SUBMISSIONS REQUIRED TO SUPPORT THE STUDY REQUIRED UNDER 35
ITEM (I) OF THIS PARAGRAPH. 36
HOUSE BILL 772 3
(3) THE COMMISSION SHALL ASSI ST THE DEPARTMENT WITH THE 1
FACILITATION OF THE RATE–SETTING STUDY REQUIRED UNDER PARAGRAPH (2)(I) 2
OF THIS SUBSECTION, INCLUDING BY: 3
[(iii)] (I) [Consult] CONSULTING with stakeholders, including 4
community providers and individuals receiving services [, in conducting the rate–setting 5
study and developing the payment system required by this paragraph]; AND 6
(II) PROVIDING ANALYTICAL SUPPORT AND TECHNICA L 7
ASSISTANCE. 8
(4) THE BEHAVIORAL HEALTH ADMINISTRATION AND THE MEDICAL 9
CARE PROGRAMS ADMINISTRATION JOINTLY SHALL: 10
(I) DEVELOP AND IMPLEMENT A PAYMENT SYSTEM 11
INCORPORATING THE FINDINGS OF THE RATE–SETTING STUDY CONDUCTED UNDER 12
PARAGRAPH (2)(I) OF THIS SUBSECTION; AND 13
(II) CONSULT WITH STAKEHOL DERS, INCLUDING COMMUNITY 14
PROVIDERS AND INDIVIDUALS RECEIVING SERVICES, IN DEVELOPING THE PAYMENT 15
SYSTEM REQUIRED UNDER ITEM (I) OF THIS PARAGRAPH. 16
[(2) The Administration, on or before September 30, 2019, shall comple te 17
the study required under paragraph (1)(i) of this subsection.] 18
[(3)] (5) The Administration shall adopt regulations to implement the 19
payment system required by paragraph [(1)] (4)(I) of this subsection. 20
(6) (I) THE SECRETARY, OR THE SECRETARY’S DESIGNEE, SHALL 21
DESIGNATE A REPRESEN TATIVE OF THE ADMINISTRATION TO SER VE AS A 22
TECHNICAL LIAISON BETWEEN THE DEPARTMENT AND THE COMMISSION. 23
(II) THE TECHNICAL LIAISON SHALL: 24
1. PROVIDE TECHNICAL INP UT FOR THE COMPLETIO N 25
OF THE STUDY REQUIRE D UNDER PARAGRAPH (2)(I) OF THIS SUBSECTION 26
REGARDING MEDICAID POLICY , BEHAVIORAL HEALTH RE IMBURSEMENT 27
STRUCTURES, AND EXISTING DATA SOURCES; 28
2. ENSURE CONTINUITY BETWEEN THE DEPARTMENT’S 29
WORK REGARDING THE COMPLETION OF THE STUDY REQUIRED UNDER PARAGRAPH 30
(2)(I) OF THIS SUBSECTION A ND THE COMMISSION’S FACILITATION OF TH E 31
WORKGROUP ON BEHAVIORAL HEALTH RATE METHODOLOGY MODERNIZATION 32
4 HOUSE BILL 772
ESTABLISHED UNDER CHAPTER ____ (H.B. 772) OF THE ACTS OF THE GENERAL 1
ASSEMBLY OF 2026; AND 2
3. COORDINATE THE COMMISSION’S AC CESS TO 3
EXISTING ANALYTICAL WORK OR STUDY PREPARATION THAT HAS BEEN COMPLETED 4
BY THE DEPARTMENT IN COMPLYING WITH PARAGRAPH (2) OF THIS SUBSECTION. 5
(h) (1) On or before [December] JANUARY 1, [2018] 2028, the [Department] 6
COMMISSION shall submit an interim report to the Governor and, in accordance with § 7
2–1257 of the State Government Article, the General Assembly on [the]: 8
(I) THE delivery system through which community –based 9
behavioral health services should be provided; 10
(II) THE STATUS OF THE IMP LEMENTATION OF THE 11
RECOMMENDATIONS OF T HE WORKGROUP ON BEHAVIORAL HEALTH RATE 12
METHODOLOGY MODERNIZATION ESTABLISHED UNDER CHAPTER ____ (H.B. 772) 13
OF THE ACTS OF THE GENERAL ASSEMBLY OF 2026; and [any] 14
(III) ANY preliminary reco mmendations regarding the payment 15
system required under this section. 16
(2) On or before December 1, [2019] 2028, and on or before December 1 17
each year thereafter, the [Department] COMMISSION shall submit a report to the 18
Governor and, in accordance with § 2 –1257 of the State Government Article, the General 19
Assembly on the impact of the rate adjustments and the payment system required under 20
this section on community providers, including the impact on: 21
(i) The wages and salaries paid and the benefits provided to direct 22
care staff and licensed clinicians employed by community providers; 23
(ii) The tenure and turnover of direct care staff and licensed 24
clinicians employed by community providers; and 25
(iii) The ability of community providers to recruit qualified direct 26
care staff and licensed clinicians. 27
(3) The [Department] COMMISSION may require a community provider to 28
submit, in the form and manner required by the [Department] COMMISSION, information 29
that the [Department] COMMISSION considers necessary for completion of the report 30
required under paragraph (2) of this subsection. 31
SECTION 2. AND BE IT FURTHER ENACTED, That: 32
HOUSE BILL 772 5
(a) There is a Workgroup on Behavioral Health Rate Methodology Modernization 1
in the Maryland Health Care Commission. 2
(b) The purpose of the Workgroup is to develop transparent, cost –based 3
reimbursement methodologies for certified community behavioral health clinics and, 4
outpatient mental health centers , and independent outpatient providers using federally 5
required and existing cost–study data as the foundation for future rate reform. 6
(c) The Workgroup consists of the following members: 7
(1) two members one member of the Senate of Maryland, appointed by the 8
President of the Senate; 9
(2) two members one member of the House of Delegates, appointed by the 10
Speaker of the House; 11
(3) the Executive Director of the Maryland Health Care Commission, or the 12
Executive Director’s designee; 13
(4) one repres entative of the Maryland Medical Assistance Program, 14
designated by the Secretary of Health; 15
(5) one the representative of the Behavioral Health Administration , 16
appointed by the Secretary of Health designated as technical liaison under § 16–201.3(e)(6) 17
of the Health – General Article, as enacted by Section 1 of this Act; 18
(6) three representatives of community behavioral health providers 19
designated by the Community Behavioral Health Association of Maryland, including: 20
(i) at least one provider from a certified community behavioral 21
health clinic participating in the federal demonstration; and 22
(ii) at least one provider from an outpatient mental health center; 23
and 24
(7) one representative of the Licensed Clinical Professional Counselors of 25
Maryland, designated by the President of the Association; and 26
(8) one representative of MedChi, the Maryland State Medical Society, 27
designated by the Executive Director of MedChi; and 28
(7) (8) (9) the following members, jointly appointed by the Speaker of the 29
House and the President of the Senate: 30
(i) one representative of a statewide hospital association; 31
(ii) one representative of a specialty psychiatric hospital; 32
6 HOUSE BILL 772
(iii) one representative of a consumer or peer –led behavioral health 1
advocacy organization; 2
(iv) one independent actuarial or health –economics expert with 3
Medicaid experience; and 4
(v) any additional members determined necessary by the cochairs in 5
consultation with the Workgroup. 6
(d) The President of the Senate and the Speaker of the House jointly shall 7
designate one legislative member and one provider member to serve as cochairs of the 8
Workgroup. 9
(e) The Maryland Health Care Commission, in consult ation with the Maryland 10
Department of Health, the Department of Legislative Services, and the Community 11
Behavioral Health Association of Maryland, shall provide staff for the Workgroup. 12
(f) A member of the Workgroup: 13
(1) may not receive compensation as a member of the Workgroup; but 14
(2) is entitled to reimbursement for expenses under the Standard State 15
Travel Regulations, as provided in the State budget. 16
(g) The Workgroup shall: 17
(1) use the federally required certified community behavioral health clinic 18
cost study as the baseline dataset for evaluating outpatient mental health service costs in 19
the State; 20
(2) review and analyze cost drivers for outpatient behavioral health 21
services, including: 22
(i) staffing mix and workforce models; 23
(ii) medical director and clinical supervision requirements; 24
(iii) contractor versus salaried employment structures; 25
(iv) geographic and volume variation; and 26
(v) compliance with State and federal regulatory requirements, 27
including COMAR 10.63; and 28
(vi) differentiation of costs between nonprofit and for –profit 29
organizations; 30
HOUSE BILL 772 7
(vii) ratio of services delivered by telehealth; and 1
(viii) size and volume of group–based services; 2
(3) approve methodologies for analyzing outpatient costs and the Maryland 3
Department of Health’s completion of the study required under § 16 –201.3(e)(2)(i) of the 4
Health – General Article, as enacted by Section 1 of this Act, that include: 5
(i) cost reporting structures; 6
(ii) sampling methodologies that exclude all programs founded after 7
2020; 8
(iii) allocation of overhead and administrative costs; 9
(iv) differentiation of the treatment of revenues of providers that are 10
from Medicaid and sources other than Medicaid; and 11
(v) modeling approaches used to estimate sustainable 12
reimbursement rates; 13
(3) (4) evaluate reimbursement methodologies used in other states and 14
federal demonstration programs; 15
(4) (5) (i) subject to item (ii) of this item, develop one or more cost–based, 16
rate–setting methodologies applicable to both certified community behavioral health clinics 17
and, outpatient mental health centers, and independent outpatient providers that include: 18
1. re–evaluating and rebasing reimbursement rates under 19
the Certified Community Behavioral Health Clinic Payment Model in demonstration year 20
two and every 3 years thereafter; 21
2. assumptions, cost –model components, and inflationary 22
adjustments; and 23
3. integration of data and analyses produced under the 24
cost–driven rate–setting study required under § 16 –201.3(e)(2)(i) of the Health – General 25
Article, as enacted by Section 1 of this Act, to the extent the data and analyses are available; 26
and 27
(ii) build on all previously completed and ongoing cost–reporting and 28
analytical work related to setting community provider rates for community –based 29
behavioral health services in developing methodologies under item (i) of this item, 30
including, to the extent available: 31
8 HOUSE BILL 772
1. the independent cost –driven analysis required under § 1
16–201.3(e)(2)(i) of the Health – General Article, as enacted by Section 1 of this Act; 2
2. the certified community behavioral health clinic cost and 3
rate study required by the 2025 Joint Chairmen’s Report; and 4
3. cost reporting tools and submission review processes 5
required under § 16–201.3(e)(2)(iii) of the Health – General Article, as enacted by Section 6
1 of this Act; 7
(5) (6) ensure all recommended methodologies comply wit h both federal 8
Medicaid financing rules and the Medicaid Upper Payment Limit and provide 9
recommendations on strategies to implement the recommended methodologies while 10
remaining compliant with federal requirements; 11
(6) (7) identify any regulatory or sta tutory barriers to statewide 12
implementation of cost–based, rate–setting methodologies; and 13
(7) (8) propose options for phased statewide implementation of cost –based, 14
rate–setting methodologies when fiscal conditions allow. 15
(g) (h) (1) On or before December 1, 2026 June 1, 2027 , the Workgroup shall 16
submit an interim report to the Governor and, in accordance with § 2 –1257 of the State 17
Government Article, the General Assembly. 18
(2) On or before October December 1, 2027, the Workgroup shall submit a 19
final report to the Governor and, in accordance with § 2 –1257 of the State Government 20
Article, the General Assembly that includes: 21
(i) recommended rate–setting methodologies; 22
(ii) assumption and cost–model components; 23
(iii) options for phased implementation; 24
(iv) estimated fiscal considerations; and 25
(v) any recommended statutory or regulatory changes. 26
(h) (i) This section does not: 27
(1) require an immediate rate increase; 28
(2) mandate an appropriation; or 29
(3) create a fiscal obli gation in the absence of subsequent legislative or 30
budgetary action. 31
HOUSE BILL 772 9
SECTION 2. 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 1
July 1, 2026. It Section 2 of this Act shall remain effective for a period of 2 years and, at 2
the end of June 30 , 2028, Section 2 of this Act, with no further action required by the 3
General Assembly, shall be abrogated and of no further force and effect. 4
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.