Maryland’s pilot program, the “all-payer model” for healthcare payments designed to rein in skyrocketing healthcare costs, has received federal approval to expand. When the program began four years ago, only hospitals participated, but now the model will apply to doctor’s offices and nursing homes as well.
Under this agreement with the Centers for Medicare and Medicaid Services, rather than using a fee-for-service model, state regulators capped the budget of hospitals to prevent revenue from being generated beyond what is budgeted. Hospitals were then incentivized to keep people healthy and reduce the need for high-cost hospital care and were exempt from typical Medicare regulations. Now, Maryland has begun a five-year contract with the Centers for Medicare and Medicaid Services to grow the program beyond hospitals. The expanded model will take effect on Jan. 1, 2019 and continue through 2023. It will include programs coordinating care across hospital and non-hospital settings, a primary care program devoted to improving individual patient outcomes, incentives for providers to meet quality and care improvement goals, and community resources focused on population health goals.
So far, the model has received mixed results. A Maryland Department of Health report said that state hospitals have reduced readmissions by more than 6 percent between 2014 and 2016, potentially preventable conditions by 30 percent, and rates of complications and infections acquired in hospitals by almost 45 percent. The state report also said that this model has saved Medicare more than $586 million through 2016, and projections show that the expanded program could translate to $1 billion in savings over the next five years. However, an evaluation from Harvard University and University of Pittsburgh professors says that there’s no direct link between the program and cost savings or lower hospital utilization.
In the meantime, the seven main Democrat gubernatorial candidates have agreed on a plan they believe will stabilize the state’s healthcare system in a different way. All seven have signed a pledge to support a plan to help protect the Affordable Care Act in Maryland by creating a state-level individual healthcare mandate. This plan was considered during the regular legislative session this year but stalled; lawmakers instead approved a commission that would study the idea.
