Briefing before Joint Committee on Health Care Delivery and Financing
May 29, 2013
Maryland’s Proposal to Modernize All-Payer Rate Setting: Enhancing Patient Experience, Controlling Costs, and Improving Health
Joint Committee on Health Care Delivery and Financing Briefing
May 29, 2013
John M. Colmers Chairman Health Services Cost Review Commission
Joshua M. Sharfstein, M.D.
Maryland Department of Health and Mental Hygiene
Eliminated cost-shifting among payers Provided for the sharing of public goods (e.g., uncompensated care and medical education) among all payers Allowed usage of creative incentives to improve quality and outcomes
- Since the late 1970s, the independent Health Services Cost Review
Commission sets inpatient and outpatient hospital rates for all public
and private payers.
- In the last 35 years, Maryland’s hospital finance system has:
Maryland’s Current Rate Setting System Has Important Limitations
- The Medicare Waiver in the Social Security Act at 1814(b) provides Maryland authority to set payment rates for Medicare.
CMS evaluates Maryland’s success under 1814(b) on a per discharge basis.
Waiver test rules focus on inpatient services only
Reflect a time when cost per discharge and average length of stay were the only measures for efficiency
- The current system’s focus on inpatient per-case costs does not provide
incentives aligned to population health and comprehensive coordinated
care across different settings.
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