1. A. Violations. In addition to the requirement that an insurer, nonprofit health service plan, or health maintenance organization pay interest as required under Insurance Article, §15-1005(f), Annotated Code of Maryland, an insurer, nonprofit health service plan, or health maintenance organization is subject to the penalties set forth in §B of this regulation if the insurer, nonprofit health service plan, or health maintenance organization:

   1. (1) Fails to:

      1. (a) Pay a claim within 30 days after receipt of a claim for reimbursement from a:

         1. (i) Person entitled to reimbursement under Insurance Article, §15-701(a), Annotated Code of Maryland, or
         2. (ii) Hospital or related institution as defined in Health-General Article, §19-301, Annotated Code of Maryland; or
      2. (b) Send a notice of receipt and status of the claim in accordance with Insurance Article, §15-1005(c)(2), Annotated Code of Maryland;
   2. (2) Requests additional information that is not reasonably necessary to determine if all or part of the claim will be reimbursed, in accordance with Insurance Article, §15-1005(c)(2)(ii), Annotated Code of Maryland;
   3. (3) Fails to pay a claim within 30 days after receipt of all reasonable and necessary documentation in accordance with Insurance Article, §15-1005(e)(1), Annotated Code of Maryland; or
   4. (4) Fails to pay interest in accordance with Insurance Article, §15-1005(e)(2) or (f), Annotated Code of Maryland.

2. B. Penalties. The penalties for insurers, nonprofit health service plans, and health maintenance organizations for the commission of an act listed in §A of this regulation are as follows:

   1. (1) Up to $500 for a single commission of an act listed in §A of this regulation that is arbitrary or capricious based on all available information; and
   2. (2) As provided in Insurance Article, §4-113(d), Annotated Code of Maryland, for commission of an act listed in §A of this regulation with the frequency to indicate a general business practice as defined by regulation by the Commissioner.

Authority: Health-General Article, §§19-729, and 19-730; Insurance Article, §§4-113 and 15-1005; Annotated Code of Maryland

Effective date:

Regulation .01 adopted as an emergency provision effective April 12, 1999 (26:10 Md. R. 796); emergency status expired October 1, 1999

Regulation .01 adopted as an emergency provision effective October 1, 1999 (26:23 Md. R. 1776); emergency status expired November 15, 1999; adopted permanently effective December 13, 1999 (26:25 Md. R. 1900)