Department of Health and Mental Hygiene Posts Revised Proposal for Modernization of Maryland’s All-Payer Hospital System for Comment

BALTIMORE (September 27, 2013)—Dr. Joshua M. Sharfstein, Secretary of the Department of Health and Mental Hygiene, and John M. Colmers, Chair of the Health Services Cost Review Commission, today posted for public comment a revised proposal for modernization of Maryland’s unique all-payer hospital system.

“Our shared goal is a health care system that enhances patient care, improves health outcomes, and lowers costs,” Dr. Sharfstein said. “This proposal is revised and improved based on input we received from around the state since our initial draft application in March.”

“The proposal builds upon decades of innovation and equity in health care payment and delivery in Maryland by modernizing our all-payer rate setting system for hospital services,” Mr. Colmers said. “The Health Services Cost Review Commission looks forward to leading our system into a new era.”

The proposed plan includes:

* A five year model focused on improving health care quality, delivery of services, and the affordability of health care.

* A new approach to Maryland’s all-payer hospital waiver, which moves from the current statutory approach to all-payer hospital payment, which is based on Medicare payment per admission, to a new model that focuses on overall hospital expenditures.

* Strong incentives for better outcomes at lower cost, by shifting away from fee-for-service reimbursement to models that reward hospitals when care is high quality and fewer admissions are needed.

* Improved quality, including substantial reductions in hospital readmissions and potentially preventable complications.

* Controls on costs, including an annual limit on the total increase in revenue based on the 10-year average growth in the state’s economy and at least $330 million in savings over five years to Medicare. The Health Services Cost Review Commission will be working with payers, providers, and many others to develop innovative approaches to create savings.

The proposed revised application is designed to work together with a number of other efforts currently underway in Maryland, including efforts to strengthen primary care, map and track preventable disease and health costs, develop public-private coalitions for improved health outcomes, establish health enterprise zones, and enroll Marylanders in health coverage through Maryland Health Connection. The proposal is available on the DHMH website at

Comments are requested by close of business on Monday, October 7, 2013 on whether the draft application advances the important health care goals of better quality care, lower cost, and improved health outcomes. After review of the comments, the Department will consider proceeding with application submission to the Center for Medicare & Medicaid Services.

Comments should be submitted to This email address is being protected from spambots. You need JavaScript enabled to view it.

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