Maryland Hospital Association

September 3, 2026

The Honorable Pamela Beidle
Chair, Senate Finance Committee
Chair, Workgroup to Study the Rise in Adverse Decisions
Miller Senate Office Building, 3 East Wing
11 Bladen Street
Annapolis, MD 21401

Dear Chair Beidle:

On behalf of the Maryland Hospital Association (MHA) and its member hospitals and health systems, we appreciate the opportunity to comment on the topics covered during the Aug. 20 meeting of the Workgroup to Study the Rise in Adverse Decisions (Workgroup). The suggestions and recommendations discussed at the meeting reflect many of the concerns raised by MHA and other stakeholders, including the need for comprehensive data collection and reporting and greater transparency into payer utilization review practices.

Improving reporting on adverse decisions and reducing their frequency are critical to protecting patients’ access to medically necessary care. These efforts should be part of a broader strategy to address inappropriate denials through greater transparency and stronger oversight of utilization review practices.

MHA offers the following comments for consideration as the Workgroup prepares its report to the General Assembly. These comments supplement those offered in MHA’s July 23 letter to the Workgroup.

Strengthen Data Collection and Reporting

MHA supports strengthening data collection and transparency around adverse decisions, including through the Maryland Insurance Administration’s (MIA) annual report on appeals and grievances. In particular, the high rate at which adverse decisions are overturned—49.9% of those challenged through the grievance process in 2024—underscores the importance of understanding why these decisions were ultimately reversed. [1] Future reporting should provide insight into why decisions are reversed, including whether reversals result from the submission of new information, reconsideration of the clinical evidence or criteria, or other factors. Understanding the reasons for reversals can help identify opportunities to improve the accuracy of initial coverage determinations and inform effective oversight of utilization review practices.

[1] Maryland Insurance Administration. Health Care Appeals & Grievance Law 2024 Report, available here​

Adverse decisions represent only a fraction of the denials that affect patients’ access to care. To provide a more complete picture of denial activity, we respectfully encourage the state to develop a comprehensive, standardized data framework that captures administrative and partial denials, as well as those related to medical necessity. This data would complement existing and planned reporting efforts and provide a more complete picture of denials and their impact on patient access and outcomes. It would also help stakeholders better understand trends in denials and utilization review and support data-driven policies to reduce denials.

Additionally, as part of broader efforts to improve access to care, we encourage the state to examine denials trends in other states, particularly those demonstrating comparatively lower rates, and assess the factors that may be contributing to those differences. This analysis should consider whether specific statutory or regulatory requirements, oversight approaches, utilization review reforms, or other policies have reduced avoidable denials. This could help Maryland identify promising strategies and inform future efforts to reduce unnecessary denials and associated administrative burden.

Enhance and Standardize Prior Authorization Practices

MHA urges the state to standardize utilization review practices, including prior authorization requirements, that apply to all payers. Maryland has made important progress by establishing stronger requirements around the transparency, timeliness, and administration of prior authorization for commercial carriers. We ask the state to extend comparable standards to Medicaid managed care organizations (MCOs) and Medicare Advantage plans where possible to reduce administrative complexity for providers, improve patient experience, and ensure equitable access to care regardless of coverage type.

Greater accountability for timely prior authorization decisions should be a central component of these efforts as delays can postpone medically necessary care, impede timely transitions to postacute settings, and create significant operational and administrative burden for providers. MHA supports requiring prior authorization determinations within 48 hours for non-urgent requests and 24 hours for urgent requests. As noted in our prior letter, this is of particular importance for prior authorization requests for post-acute services given the impact of slow approvals on hospital discharge planning delays and avoidable inpatient stays. We also recommend that the state require prior authorization requests to be deemed approved if a payer fails to respond within the required timeframe: an approach adopted by other states, as discussed at a prior Workgroup meeting. [2] Such a requirement would help ensure that payer inaction does not delay medically necessary care.

 In addition, MHA urges the state to adopt a gold carding policy that exempts qualifying providers with consistently high prior authorization approval rates from these requirements for applicable services. Requiring providers to repeatedly obtain prior authorization for routinely approved services diverts clinicians and staff from patient care, increases administrative expenses, and can delay treatment while requests are being processed. Gold carding would align oversight with demonstrated performance by reducing unnecessary review for providers whose prior authorization decisions consistently reflect payers’ approval standards, while preserving requirements for services where they are needed most.

[2] Mental Health Association of Maryland’s July 30, 2026 Presentation to the Workgroup, available here

Standards for State-Subsidized Medicare Advantage Plans

The Centers for Medicare and Medicaid Services (CMS), through the AHEAD Model State Agreement, authorized the state to advance policies to support the stabilization of Maryland’s Medicare Advantage market. Using this authority, the multi-agency Regulatory Working Group established a policy that provides qualifying Medicare Advantage plans a discount on hospital rates approved by the Health Services Cost Review Commission (HSCRC) starting in 2027. [3]

As noted in our prior comments, the state should ensure Medicare Advantage plans that receive state-funded discounts under this program are adhering to reasonable utilization review standards including compliance with benchmarks for medical necessity determinations, prior authorization processes, and minimal rates of prior authorization and claim denials. The state could condition eligibility for state support under this program on utilization review standards in the same way that, under the current policy, qualifying plans must have at least 3.5 stars in the Medicare Stars quality program and cover a certain number of beneficiaries residing in select jurisdictions in the state. [4], [5] In doing so, the state would not be establishing new standards on all plans offered in the state but only for plans offered by carriers that choose to participate in the program. Good payer practices and reasonable utilization review standards are necessary to maintain and increase beneficiary participation in Medicare Advantage plans in the state.

These standards should include timely access to peer-to-peer review as this would improve the utilization review process and reduce unnecessary denials. Direct discussions between clinicians can help ensure that decisions are informed by individual clinical circumstances, allow providers to clarify information that may not be fully reflected in the medical record, and resolve questions before they result in adverse decisions and other denials, supporting clinically informed and efficient decision-making in the utilization review process.

Artificial Intelligence in Utilization Review

Discussions at prior Workgroup meetings have also highlighted the need for greater transparency about the use of artificial intelligence (AI) in utilization review and whether its use is contributing to the significant rise in denials in recent years. Clarity on how and where in the utilization process AI is being used will help determine whether these technologies are being used appropriately or if additional oversight may be warranted. It is critically important to understand whether payers are using AI to identify claims for review, apply clinical criteria, recommend or make coverage determinations, or support other components of utilization review.

MHA agrees that all adverse decisions must be made by a physician and that carriers must identify whether AI, an algorithm, or another software tool was used to make an adverse decision in the data they submit quarterly to MIA. We also recognize that Chapter 747 of 2025 (House Bill 820) established important standards governing the use of AI in utilization review for carriers and explicitly prohibits AI from denying, delaying, or modifying health care services. However, these requirements do not extend to Medicaid MCOs. While we understand that there are broad AI governance requirements in HealthChoice MCO agreements, we urge the state to consider extending utilization review-specific AI protections such as those established under Chapter 747 to Medicaid MCOs.

[3] Approved AHEAD Regulatory Working Group Proposal on Cost-Shifting and Medicare Advantage, available here
[4] The established criteria for “Qualified Plans” are further described on pgs. 17-18 of the approved policy
[5] While qualified plans for CY 2027 have already been selected, these standards could apply in future years

 Use of Clinical Criteria in Utilization Review

Clinical criteria are intended to promote consistent, evidence-based decision-making in utilization review. Audits can provide an important mechanism to identify instances in which clinical criteria are not being applied correctly or consistently, which can result in inappropriate denials or delays in care. When audits reveal recurring or systemic issues, effective enforcement levers must be in place and used to ensure issues are addressed through appropriate corrective action. This is essential to promote greater consistency in utilization review practices, reduce administrative burden, and avoid delays in patient care.

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 MHA appreciates the Workgroup's efforts to translate the robust discussion among stakeholders over the past several months into actionable recommendations. We encourage the state to consider opportunities to reduce adverse decisions and inappropriate denials more broadly to protect patients’ access to medically necessary care.

Thank you for the opportunity to comment and for your continued attention to this important matter. MHA looks forward to continuing to work collaboratively with MIA, HSCRC, MDH, and members of the Workgroup as it develops its recommendations.

Sincerely,
Patrick D. Carlson
Vice President, Care Transformation & Finance

cc: Marie Grant, Insurance Commissioner, MIA Riley Williams, Assistant Director, Legislative and Regulatory Policy, MIA Janice Lepore, Chief, Policy and Government Affairs, HSCRC Meghan Lynch, Director, Office of Government Affairs, MDH

Jai Medical Systems

Marie Grant
Commissioner
Maryland Insurance Administration
200 Saint Paul Place, Suite 2700
Baltimore, Maryland 21202

Re: Workgroup to Study the Rise in Adverse Decisions in the State Health Care System Comments

Dear Commissioner Grant:

On behalf of the League of Life and Health Insurers of Maryland, we appreciate the opportunity to comment on the deliberations of the workgroup to study the rise of adverse decisions in the state health care system.

League members thank the Maryland Insurance Administration (MIA) and the Health Services Cost Review Commission (HSCRC) for their substantial work staffing this workgroup and for the opportunity to contribute. We are disappointed, however, that many stakeholders have repeatedly strayed from the workgroup's charge. Too often, deliberations have become a venue for airing operational grievances rather than a chance to roll up our sleeves and make progress.

We felt it was necessary to write in response to the materials presented over the past several meetings by the Maryland Hospital Association (MHA), MedChi, the Maryland Community Health System (MCHS), and behavioral health advocates.

We want to begin where we agree. The General Assembly was right to ask the Maryland Insurance Administration and the Health Services Cost Review Commission to examine adverse decisions, and the charge in SB 776/HB 995 to standardized definitions and reporting, as well as strategies to reduce unnecessary adverse decisions is appropriate. The patient stories shared with the Workgroup are real and deserve to be taken seriously. So does the administrative burden that physician practices, hospitals, and federally qualified health centers described. Carriers want to ensure that initial denials are limited and overturns are reduced, and network directories ease consumer accessibility to networked providers.  In many cases, there is a shared responsibility of providers and payers to streamline administrative tasks and reduce errors to decrease burden for consumers, and League members want to do our part. 

Where the League parts ways with much of the provider testimony is on diagnosis. Several presentations asserted that utilization management, including adverse decisions, is driven primarily by carrier behavior and profit motive. The record before the Workgroup does not support that conclusion, and recommendations built on it risk missing the real drivers of denials while raising costs for the Marylanders who pay premiums.

League members would provide the following comments by theme:

The provider data measure something broader than “adverse decisions" and do not isolate carrier conduct.

MHA's analysis of HSCRC denials data has limited utility: it counts every claim a payer denied in whole or in part, including denials for untimely filing, registration and eligibility errors, missing information, duplicate claims, and failure to obtain a required authorization. Under Insurance Article § 15-10A, an adverse decision is a determination that a covered service is not medically necessary, appropriate, or efficient. Much of what MHA's data shows is broader than adverse decisions. For example, untimely filing, which is one of the fastest-growing denial categories, rose 114 percent These claims are denied due to administrative errors on the part of the provider. Other stakeholders acknowledged the same point, noting that many of the claim and authorization problems it described do not meet the legal definition of an adverse decision.

The figures were presented in gross dollar terms rather than as final outcomes. They do not account for claims that were corrected, resubmitted, or overturned and paid, and they are not normalized for growth in charges, utilization, or enrollment over a period in which hospital charges rose substantially under the all-payer model. A denied dollar that is paid thirty days later on a corrected claim is an administrative friction worth reducing; it is not evidence that care was ever withheld.

The data do not support a profit-motive explanation.

If denials were primarily a function of commercial profit-seeking, one would expect commercial carriers to lead. MHA's own breakdown shows the opposite. Commercial payers account for roughly one-fifth of the denied dollars in MHA's five-year total, while Medicaid managed care accounts for nearly double that. By MHA's measure of denials as a share of charges, the payer with the highest rate in FY 2024 was Medicaid fee-for-service, a program administered directly by the State with no shareholders or profit margin. The Maryland Department of Health separately reported an 11.7 percent fee-for-service denial rate for calendar year 2025. These figures do not mean the State is acting in bad faith; they mean that denials are a feature of any payer that is responsible for verifying eligibility, applying coverage rules, and ensuring that care meets clinical standards. The Workgroup should resist a narrative that assigns motive to payers.  Generalized accusations from stakeholders are not helpful to the process.

The regulated-market data show a modest change and a working system of review.

MedChi's presentation relied on the MIA's most recent appeals and grievances report, and those figures deserve a close reading. Carrier adverse decisions increased by 2.1 percent between 2023 and 2024, during a period in which individual market enrollment grew by more than 8 percent.

Much of the national data cited to the Workgroup comes from physician opinion surveys, including the American Medical Association's annual prior authorization survey. Those surveys capture genuine frustration and are worth hearing, but they are advocacy tools that report perceptions, not claims-level outcomes. They should not be treated as a substitute for the standardized, audited data the Workgroup has been asked to design. By contrast, industry-wide claims data presented at Meeting 4 indicate that the vast majority of medical prior authorization requests in the commercial market are ultimately approved and that most services and prescriptions are not subject to prior authorization.

Many of the drivers identified are shared, operational, or outside carriers' control.

Several factors behind the trends described to the Workgroup have little to do with carrier utilization management philosophy. Medicaid redeterminations following the end of the federal continuous coverage requirement, and the six-month redeterminations and work requirements coming under H.R. 1, generate eligibility-related denials that no payer policy can prevent. Maryland Medicaid MCOs reported that between 80 and 96 percent of prior authorization requests they receive arrive with complete information, which means that a meaningful share of requests require follow-up before any clinical judgment can be made. Maryland Community Health System's (MCHS) own recommendations call for collaboration on coding accuracy and on the root causes of claim denials. The network loading and credentialing problems MCHS described are real and unacceptable when they persist, and our members are committed to resolving them, but they are operational failures to be fixed through better processes, not evidence that medical necessity review is being misused.

Individual cases presented to the Workgroup, such as the request for proton beam therapy, also illustrate that reasonable clinicians can disagree about whether a newer and substantially more expensive modality offers meaningful benefit over an established alternative for a given diagnosis. Those disagreements are precisely what peer-to-peer review, internal grievance, and independent external review exist to resolve. We would welcome the opportunity to review specific cases with the Administration, but anecdotes, however compelling, cannot establish a statewide trend.

Utilization review protects patients and affordability.

Prior authorization and medical necessity review exist to confirm that care is safe, consistent with evidence-based guidelines, delivered in an appropriate setting, and not duplicative. Maryland's own definition of medical necessity for Medicaid MCOs includes the requirement that a service be the most cost-efficient option that can be provided without sacrificing effectiveness or access. These tools also detect billing errors, fraud, waste, and abuse. Every dollar spent on unnecessary or low-value care is ultimately paid by employers and families through premiums and by taxpayers through public programs. The Workgroup's posted materials include a paper calling for an outright ban on prior authorization. We respectfully urge the Workgroup not to adopt that framing. Eliminating the tools that keep care safe, necessary, and affordable would not reduce the cost of care; it would shift that cost onto the Marylanders least able to absorb it.

Maryland has just enacted major reforms, and the regulated market is a small share of the system.

The 2024 utilization review reforms (SB 791/HB 932) took effect on January 1, 2025. The law requires an electronic prior authorization process integrated with provider systems, limits reauthorization for chronic conditions, requires continuity of care for new enrollees, and requires advance notice of new prior authorization requirements. Some of these provisions only became operative this year, and the MIA began collecting claims-volume denominators only in the second half of 2024. National carriers have also made voluntary commitments to reduce prior authorization volume and to move to standardized electronic prior authorization by January 1, 2027. MedChi itself recommended that the State closely monitor implementation of the 2024 law. We agree, and we believe that is the right sequence: measure the effect of reforms already in law as well as the reforms that plans have voluntarily committed to before layering new mandates on top of them.  We were also disheartened throughout the workgroup process by stakeholders continuously belittling the work that has been done in the prior authorization and utilization management space.  Maryland continues to have the most restrictive prohibitions in the entire nation.

It is equally important to recognize the limits of State jurisdiction. Fully insured group and individual coverage regulated by the MIA represents less than one-fifth of Marylanders, while self-insured employer plans, Medicare, and federal programs cover far more. Requirements imposed only on MIA-regulated carriers will not reach most of the denials described to the Workgroup, but they will increase costs in the one segment where the State directly sets the rules that the small group and individual markets that families and small businesses rely on.   The fragmentation of the system will certainly lead providers to have an experience that might diverge from this discussion, and likely more education is needed for providers to understand the complexity of the market.

Recommendations

Consistent with the Workgroup's statutory charge, the League supports and offers the following:

1. Adopt standardized definitions that separate clinical adverse decisions from administrative denials. Reporting should distinguish medical necessity determinations from denials for eligibility, timely filing, coding, duplicate submission, and missing information, so that policymakers can see what is driving the numbers.

2. Require normalized, outcome-based metrics across all payers. Trends should be reported as rates per claim or per enrollee, distinguish initial from final determinations, and include Medicaid fee-for-service, Medicaid MCOs, and State and local employee plans alongside commercial carriers.

3. Evaluate the 2024 reforms and health plan voluntary reforms before enacting new mandates. The Workgroup should recommend a defined review of SB 791/HB 932 implementation using the new MIA data, including the electronic prior authorization requirements, before recommending additional carrier-only requirements.

4. Pursue shared operational fixes. The League supports a standardized electronic prior authorization submission in the commercial market, a uniform plain-language appeal form developed with provider input, and a joint carrier-provider forum to resolve recurring network loading, credentialing, and coordination-of-benefits issues of the kind MCHS described.

5. Build shared accountability for complete submissions and accurate coding. Improvements in first-pass accuracy on both sides will reduce denials, rework, and delays faster than any reporting mandate.

6. Decline blanket prohibitions. The League opposes recommendations to ban or broadly eliminate prior authorization or to deem requests automatically approved, and instead supports targeted, plan-driven reductions in requirements that show consistently high approval rates.

Our members want the same outcome as every stakeholder at the table: timely access to appropriate, affordable care with as little administrative friction as possible. We believe the Workgroup can reach that outcome by grounding its recommendations in data and shared responsibility rather than in a narrative that places the blame on a single part of the system or mandates that do not have shared requirements. The League looks forward to continuing to work with the MIA the HSCRC, and other provider stakeholders on that effort.

The League supports Maryland's dialogue on the factors that might contribute to additional scrutiny on health care and the associated financing of those services, but once again, we are disappointed in the level of discussion that has veered substantially from the original subject matter where progress would have been more achievable if some stakeholders didn't approach the exercised as an opportunity to grandstand. However, the League and our members stand ready to try to achieve the original purpose that would lead to the streamlining of health care process to enable access without threatening affordability. We appreciate the consideration of these comments. If you have any questions or would like to speak with us further on these topics, please reach out to me at [email protected].

Very truly yours,

Matthew Celentano
Executive Director