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Hogan, feds sign Maryland Model all-payer contract

July 25, 2018
In The News

ANNAPOLIS — Governor Larry Hogan, together with Seema Verma, administrator of the federal Centers for Medicare and Medicaid Services (CMS), July 9 signed and officially enacted Maryland’s Total Cost of Care All-Payer Model, known as the “Maryland Model,” in a signing ceremony at the Maryland State House.

Hogan and Verma were joined by Maryland Department of Health Secretary Robert Neall, Senate President Thomas V. “Mike” Miller, Speaker of the House Michael Busch, as well as numerous health care industry representatives and advocates. The Maryland Model is an innovative approach to health care provider payment that is unique to Maryland and made possible via a contract between CMS and the state. The new model contract is expected to provide an additional $300 million in savings per year by 2023, totaling $1 billion in savings over five years.

“We are thrilled to be here today to officially execute and enact our unique and innovative Maryland Model, which is the only one of its kind in the nation,” said Governor Larry Hogan. “Today, we are taking another major step forward in our efforts to ensure that every Marylander has access to quality health care. It is my hope that these actions will be an example to the nation that when both sides of the aisle and all levels of government come together to develop innovative solutions, we can make real progress toward addressing our health care challenges and making care more accessible and more affordable.”

Hogan recognized and thanked Verma, along with Department of Health and Human Services Secretary Alex Azar, Secretary Neall, Maryland Department of Health COO Dennis Schrader, Health Services Cost Review Commission Chairman Nelson Sabatini, the presiding officers, and the stakeholders and advocates who worked to make this important achievement possible.

“This Model is a step towards aligning the entire delivery system toward paying for value over volume,” said CMS Administrator Seema Verma. “Maryland has led the way by adopting the first alternative payment model to shift hospital payments to full global budgets. Success under this new Model will require both hospitals and physicians to be equally committed to payment transformation and care redesign. We look forward to seeing the great work to come and to continuing to partner with you Governor Hogan, and the whole state of Maryland in this bold initiative.”

“This new agreement is the result of a sustained and coordinated federal-state effort to recognize the success of Maryland’s system that manages the cost of patient care in a cost-effective way, while maintaining quality and results,” said U.S. Senator Ben Cardin, a member of the Senate Finance Health Care Subcommittee, which has oversight responsibility for CMS. “There is no one-size-fits-all answer, but the Maryland Model can show other states how to successfully reward quality over quantity and concentrate on how to best manage a patient’s care.”

“Maryland has been a leader in the effort to incentivize our health care system to emphasize the quality of care over the quantity of care and to focus on value, not volume. In fact, our unique All-Payer Demonstration Model has met or exceeded every quality and performance measure over the last five years,” said U.S. Senator Chris Van Hollen. “This new agreement between CMS and the state will allow that vital work to continue. I’m committed to working with Maryland officials, health care providers, and the federal government to reduce costs and improve our quality of care and health outcomes for families across our state.”

“The Maryland Model is a testament to Governor Hogan and Administrator Verma’s commitment to helping Maryland families and driving health care innovation,” said Congressman Andy Harris, M.D. “Their close work with key stakeholders, including nursing homes, rehabilitation facilities, physicians, and hospitals, delivered a new, extended version of the Maryland Model that will be even more effective in controlling the cost of health care while maintaining access, and in improving the quality of outcomes for Maryland patients.”

“MedChi applauds the extension of the Maryland Medicare Waiver as a monumental achievement which is the result of bipartisan leadership and hard work by the Hogan Administration with the Maryland General Assembly and the Maryland Congressional Delegation,” said MedChi CEO Gene M. Ransom. “The Maryland State Medical Society MedChi is particularly excited about the new Maryland Primary Care Program that will expand Medicare service and access to thousands of Marylanders.”

Maryland’s previous All-Payer Model, approved in 2014, has already saved Medicare more than $586 million through 2016, compared to national spending. Under the current model, hospitals have successfully reduced unnecessary readmissions and hospital-acquired conditions while decreasing the growth in hospital cost per capita. The new Maryland Model will expand this successful approach across the health care system when it takes effect on January 1, 2019 and extends through the end of 2023. The contract can then be extended for an additional five years, pending a review of the terms.

The Maryland Model will:

• Coordinate care across both hospital and non-hospital settings, including mental health and long-term care

• Invest resources in care that is focused on the patient and enhance primary-care teams to improve individual patient outcomes

• Set a range of quality and care improvement goals and provide incentives for providers to meet them

• Concentrate system and community resources on population health goals to help address opioid use and deaths, diabetes, hypertension, and other chronic conditions

• Encourage and facilitate programs focusing on the unique needs of Marylanders across geographic settings and other key demographics

The Maryland Model provides a significant incentive across the health system to provide greater coordinated care, expanded patient-care delivery, and collaboration of chronic disease management, while improving the quality of care at lower costs to the consumer.