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Change to Md. Medicare waiver brings doctors on board

(Lisa F. Young / Depositphotos.com)

(Lisa F. Young / Depositphotos.com)

The Maryland All-Payer Model incentivizes hospitals to focus on quality of care and reduce readmissions. But doctors remain on a separate system, a fee-for-service model that encourages more patients.

A recent amendment to Maryland’s agreement with the Centers for Medicare & Medicaid Services will allow that to change and get doctors and hospitals working together.

The amendment allows Maryland to begin implementing programs designed to align doctors and hospitals, with doctors seeing some of the savings hospitals realize through the all-payer system.

“It recognizes that physicians are an essential partner in this effort and that we are working together to align goals … in this payment system that are based on value and not volume,” said Nicole Stallings, vice president of policy and data analytics for the Maryland Hospital Association.

Maryland has had a Medicare waiver for more than 40 years, allowing the state to set rates for services at hospitals, instead of the rates changing based on insurer. In 2014, the waiver became an official demonstration project under the Affordable Care Act.

Under the 2014 agreement, hospitals adopted global budgets and had to meet certain savings benchmarks. By 2017, the hospitals were supposed to have saved $247.5 million. Instead they have saved more than $648 million.

But doctors have been left out of the savings. When the all-payer model took effect, Maryland’s physician self-referral law prohibited compensation agreements with hospitals.

This year, the state legislature passed a law, signed by Gov. Larry Hogan in March, that allows for compensation agreement models approved by the Centers for Medicaid & Medicare Services.

Once the state legislation was enacted, hospitals anticipated the federal agency’s ruling and were prepared to adopt models that accommodated physicians, too. These models were soon codified under an amendment to the all-payer agreement with the federal government. The amendment took effect last month.

“It could be a big benefit for private doctors to partner with hospitals in new ways,” said Gene Ransom, executive director of MedChi, Maryland’s medical society. “We’re just excited about the opportunities for new partnerships. …It really puts Maryland in a unique place to innovate and do things differently.”

Under the first phase of the amendment, 16 Maryland hospitals participate in two “Care Redesign Programs.” More hospitals are expected to be added under a January expansion. 

The Hospital Care Improvement Plan is based on a compensation model used by every other state and developed in New Jersey. The model brings doctors to the table of hospital governance and includes programs for care coordination, discharge planning, population health and clinical care.

The second model, the Complex and Chronic Care Improvement Program, brings together hospitals and community providers with a goal of reducing avoidable hospital stays.

As Maryland ends its first five-year agreement with the Centers for Medicaid & Medicare Services and negotiates for a renewal, the added savings from the compensation amendment could be helpful.

“We’re hoping we can get more engaged and more involved as we go forward,” Ransom said. “(It’s) important to make CMS aware we’re serious. … We’re trying something innovative here in Maryland and we should keep this all-payer model Maryland has had for 40 years now.”

The doctors and hospitals both prioritize the all-payer model and want to see it continue in the state. Ransom said it would be “catastrophic” if the model were to go away.

He also said the all-payer system has helped bridge the divide between doctors and hospitals that can be wide in other states.

“The physicians and hospitals have never been closer,” he said. “We’re so aligned under these new models that we’re working closer (together).”


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