State health officials talk plan to change the way hospitals are reimbursed

Health Secretary Joshua M. Sharfstein joined with John Colmers, chair of the state's hospital rate-setting panel, at a forum Thursday night at The Baltimore Sun to discuss a plan that will change the way hospitals do business.

The plan would tie hospital spending to the state economy and virtually eliminate a reimbursement model based on the volume of hospital admissions that has been in place for nearly four decades. It would instead reward hospitals for quality of care and keeping patients healthy.
The proposal is part of an application that must be approved by the federal Centers for Medicare & Medicaid Services to update the state's Medicare waiver, an agreement with the federal government unique to Maryland that allows the state to set generally uniform hospital rates through a special commission. In other states, hospitals typically set their own rates, while Medicare dictates rates for its patients.

Colmers, chair of the Health Services Cost Review Commission as well as an executive at Johns Hopkins, said the state hopes it gets approval in time to implement the plan in January.

In every other state, Medicare reimbursement is the lowest rate a hospital receives -- and hospitals make up for it by charging other patients more. In Maryland, thanks to the waiver, hospitals are reimbursed at the same rate for all patients. As a result, the federal government gives Maryland a larger Medicare payment than it gives other states, and the state could lose billions of dollars without it.

Thursday night's panel was part of The Baltimore Sun's Newsmaker Forums, periodic events held by The Sun's newsroom where the public is invited to hear directly from a local leader in a town-hall setting.

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