Hogan Administration, CMS Announce Draft Terms of All-Payer Health Care Cost Model
First in the Nation “Maryland Model” Improves Health Care Access, Reduces Costs
ANNAPOLIS, MD – Governor Larry Hogan, along with the Maryland Department of Health and the federal Centers for Medicare & Medicaid Services (CMS), today announced draft terms for Maryland’s Total Cost of Care All-Payer Medicare Model, a milestone reflecting the state’s continual commitment to improving residents’ health care quality while reducing costs. Building on the state’s track record of innovation in the health care sector, the Maryland Model is designed to coordinate medical treatment for patients served in both hospital and non-hospital settings, to improve health outcomes, and to rein in the growth of health care costs.
“The terms reflected in this plan build on our state’s already strong tradition of innovation in health care access and affordability,” said Governor Larry Hogan. “I want to thank both our federal and state level health care partners, especially Health Secretary Dennis Schrader, who put hundreds of hours into this immensely important project. As we move forward in this process, our administration will remain focused on meeting the needs of the countless Marylanders who face critical medical decisions that far too often have life-changing implications.”
This model is the result of months of rigorous negotiations spearheaded by Maryland Department of Health Secretary Dennis Schrader and Health Services Cost Review Commission Chairman Nelson Sabatini. These negotiations incorporated the direction received from stakeholders in the hospital, physician, insurance, and patient sectors, as well as from federal partners, and have produced a model that all sectors support. The terms of the Maryland Model were released today for discussion by the public and stakeholders.
“Our negotiations to continue and improve our cost-controlling system on behalf of patients have returned terms that also build upon Maryland’s commitment to improving health outcomes for our residents,” said Secretary Schrader.
Gene Ransom, CEO of MedChi, Maryland’s professional association for licensed physicians, expressed appreciation for all the hard work of the Hogan administration on maintaining Maryland’s unique All-Payer Model, “Today’s announcement shows how close we are to keeping this model for another five years.”
“Maryland’s hospitals support a successful, long-term, sustainable system that maintains Maryland’s special status with respect to Medicare,” said Maryland Hospital Association President & CEO Carmela Coyle. “Preserving the state’s Medicare demonstration is a top priority for us all. We look forward to working together to make this happen and working together to address the issues the state must lead to make this a successful arrangement.”
The model reflects the strategies and priorities identified in Maryland’s Progression Plan, a document that was submitted to the federal government in December 2016 that incorporated stakeholder feedback and guidance for the next phase of the All-Payer Model. Ensuring that Maryland’s health care delivery system remains one of the best in the nation is a top priority of the Hogan administration.
The Maryland Model limits cost-shifting by various health care payers, including Medicare, and protects the individual consumer. It also addresses primary care and allows for greater coordination among the medical community. The model also enables the state and provider communities to collaborate on critical health care issues, including opioid use, diabetes, hypertension, and other chronic conditions. This collaborative approach draws upon a strong partnership with key players in Maryland’s health system – hospitals, payers, physicians, long-term care providers, and regulatory agencies, along with state and federal partners.
Additional details on the proposed structure of the new model, including the process and timeline of negotiations with the federal government, can be found at http://hscrc.maryland.gov/Pages/progression.aspx.
Any additional questions or clarification can be directed via email to firstname.lastname@example.org. Implementation of the model will begin on January 1, 2019, pending final approval from the federal government.
About Maryland’s All-Payer Medicare Model
Maryland’s current approach to hospital payment is known as the “Maryland All-Payer Medicare Model Contract,” and runs from January 1, 2014, through December 31, 2018. The All-Payer Model’s success metrics are based on enhancing quality, improving health outcomes, and constraining the growth of Medicare costs for hospital inpatient and outpatient services.
Since 2014, Maryland’s hospitals have successfully reduced unnecessary readmissions and hospital-acquired conditions, while decreasing the growth in hospital cost per capita. However, the current approach focused on hospitals does not sufficiently provide for comprehensive coordination across the entire health care system. Because of this limitation, the federal government required Maryland to develop a new model that encompasses all of the health care that patients receive, both inside the hospital and the community. This model’s anticipated start date is January 2019.