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Briefing for Maryland Legislators

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New Maryland Waiver

• Five year demonstration program

• State of Maryland and CMS signed agreement in January 2014

• Allows Maryland to continue setting hospital reimbursement rates for all patients

• Maryland is only state in the nation with a “waiver” from federally set Medicare rates

• Could become a national model for reducing health care costs

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New Maryland Waiver

• Three financial metrics: Annual hospital spending cap – 3.58% per person Medicare savings target - $330 million over five

years Growth in Maryland spending (hospital and non-

hospital) cannot exceed the nation

• Two quality metrics: Reduce 30-day readmissions to national average Reduce complications by 30% in 5 years

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A Healthier Maryland

Changes how hospitals are paid to reward the right things

• Volume − NO; Value − YES

• Success under new spending caps requires volume control & cost reduction

• The key: population health management

• Care for patients in the community in lower cost settings; reduce unnecessary care

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Maryland Waiver Performance Dashboard

October Release

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Maryland hospitals’ new waiver changes the way hospitals are paid and redesigns health care delivery for Marylanders to:

Make care more affordable Improve the patient’s experience of care Improve the health of Maryland’s

communities

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Maryland Leading Reform

• Success under this new system allows Maryland to keep an additional $1.5 billion each year in federal Medicare funds

• Loss of $1.5 billion would be disastrous for the state

• Success requires policymakers and legislators to: Knock down barriers to innovation Avoid adding new impediments  

Maryland Leading Reform

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MHA’s Top Priorities

• Eliminate Maryland’s tax on hospital care – the Medicaid deficit assessment

• Control Maryland’s health care liability costs

• Fix Maryland’s behavioral health system

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• Medicaid deficit assessment began in 2009 as a “temporary” $19 million to backfill state’s Medicaid budget - ballooned to nearly $400 million annual burden on consumers

• Artificially inflates hospital bills by 3%, yet the revenue goes to the state’s general fund, not to health care

• Artificial increase makes meeting new waiver spending and quality targets more difficult

• Maryland has an opportunity to reduce the tax burden on patients and their families

Eliminate Maryland’s Taxon Hospital Care

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• No increase in the existing Medicaid hospital assessment

• No new hospital assessments

• Use Medicaid and other state savings that exceed budget projections to reduce the hospital assessment

• Working with the administration and General Assembly, ensure priority is given to using any identified state revenue or programmatic sources to reduce the Medicaid hospital assessment

Steps to Success

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• Health care in Maryland can be more innovative and affordable if the state improves the medical liability environment

• Nationally, the fear of malpractice litigation (“defensive medicine”) costs some $46 billion

• A September 2014 Journal of the American Medical Association study revealed that defensive orders accounted for 13% of all hospital costs

• In Maryland, a 13% increase in hospital cost due to defensive medicine totals about $2 billion

Control Health Care Liability Costs

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• Protect the current cap on liability

• Secure HSCRC participation in medical liability reform discussion

• Introduce legislation to improve Maryland’s health care liability environment (e.g., mandatory cooling off period; increased evidentiary standard; post-judgment interest rates; apology; possible birth injury fund)

Steps to Success

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• One in four Americans experiences a mental illness or substance abuse disorder each year

• In one year, 17 percent of American adults had comorbid mental and physical conditions

• To ensure waiver success, Maryland’s hospitals must manage and coordinate patient care, before they reach the hospital, while in the hospital, and after a patient is released--both physical and behavioral

• Maryland must increase its state public health investment in behavioral health

Fix Maryland’s BehavioralHealth System

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• Evaluate: The state should appoint a blue ribbon commission of experts to evaluate the mental health/substance abuse resources available

• Plan: The commission should plan a comprehensive solution to address the many gaps preventing people from receiving care

• Invest: Once a plan is in place, the state must fund that solution to ensure it is realized

Steps to Success

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Briefing for Maryland Legislators

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