Maryland granted one-year extension for hospital cost-control program

State and federal health officials delayed the potential expansion of Maryland’s experimental health care cost control program by another year to give them more time to evaluate data from 2017.

Maryland is negotiating with the federal Centers for Medicare and Medicaid Services to establish a 10-year program that would encourage doctors, skilled-nursing facilities and rehabilitation centers to work with hospitals to improve patient health and save Medicare money.

The program, which requires federal approval, was supposed to go into effect in January 2019, but will be delayed until January 2020, the state said Monday.

The initiative expands on a five-year pilot program that applies only to hospitals and that is set to expire at the end of 2018. The state said it had been granted a one-year extension to the pilot, to run through December 2019.

The extension gives the state and CMS more time to study data from the pilot before finalizing a contract for the more ambitious 10-year program.

“This extension reflects the Hogan administration’s continual commitment to improving health care quality while reducing costs,” said Maryland Health Secretary Dennis Schrader. “We look forward to working with CMS to finalize the new Maryland Model, which will extend our efforts beyond hospitals to serve even more Marylanders.”

The negotiations are critical to maintaining Maryland’s unique all-payer insurance model under which Medicare and private insurers pay the same rates for services at hospitals. The model, previously known as the Medicare waiver, means the federal health program for older Americans pays more in Maryland for services as part of a long-term experiment to keep costs from growing quickly.

Under the pilot program that now would end in 2019, hospitals can earn more money if they work with providers outside the hospital to ensure patients stick to their treatment plans and avoid returning to the hospital.

The 10-year program would expand such incentives to encourage these other health care providers outside hospitals to participate in the cost-saving efforts in a more meaningful way.

Draft terms of the new program, which were released over the summer but are subject to change, establish financial incentives and additional resources for doctors, skilled-nursing facilities and rehabilitation centers if they collaborate with hospitals to reduce Medicare expenses.

Gov. Larry Hogan said the state is working with federal regulators to finalize the next phase of the agreement as quickly as possible.

“Our administration is committed to working with our federal partners to ensure we continue to lead the nation when it comes to innovation in health care access and affordability for our citizens,” he said in a statement.

Maryland Hospital Association said it supports the extension.

“Hospitals have performed very well under the model, and as we move toward the next phase and include other providers, it is critical that a new agreement addressing total cost of care is achieved,” the organization said in a statement. “We look forward to our continuing work with the state and the federal government to move Marylanders' health care into a new era of lower cost and continued high quality.”

sarah.gantz@baltsun.com

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