Last week, Maryland submitted a new reimbursement proposal to CMS that centered on the triple aim: health outcomes, patient satisfaction and cost controls.
Maryland is the only state in the country that sets its own reimbursement rates for all payers, including Medicare and commercial carriers. It maintains this waiver from CMS as long as the state hospitals' growth in Medicare inpatient payment per admission does not exceed the national average. The Health Services Cost Review Commission oversees this "all-payer system" of hospital finance.
Gov. Martin O'Malley developed the plan with the endorsement of several major healthcare organizations in the state, including the Maryland Hospital Association. The key tenets of the new all-payer model include the following:
• A permanent shift away from its current waiver and fee-for-service. Almost all hospital revenue will come from global payments.
• A five-year model would pay hospitals based on Medicare per-beneficiary total hospital cost growth.
• The model would require Maryland's Medicare per-beneficiary total hospital cost growth to be at least $330 million less than the national benchmark over five years.
• Maryland would limit its annual all-payer per capita total hospital cost growth to 3.58 percent, or the 10-year average growth rate of the state's economy.
• Quality targets would become standard. These include reducing Medicare 30-day readmissions to the national rate over five years. In addition, Maryland hospitals would aim to achieve an annual 6.89 percent reduction in the 65 most potentially preventable hospital-acquired conditions.
If Maryland's model is not extended after the fifth year, or if it is terminated early, Maryland hospitals would then transition to the national Medicare payment systems — thus ending Maryland's federal waiver.
State officials said the proposed all-payer model is expected to both reduce healthcare expenditures in the state and improve the quality of care.
"Our goal is a healthcare system that enhances patient care, improves health outcomes and lowers costs," Gov. O'Malley said in a news release. "As we see around the country, the fee-for-service status quo leads to ever-increasing costs with often mediocre outcomes. In Maryland, we're making better choices. The innovative approach we're submitting…will produce better results at lower costs by incentivizing quality of care, not quantity of care."
No timeline was given on when CMS would make a decision on the proposal.
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