Maryland hospital rates to tick upward

Patients and their insurers won't see much of a difference in hospital bills in the next year, as the state rate-setting panel decided to adopt a plan favored by the hospitals that holds payments "to a near-freeze level."

In a close vote, the Maryland Health Services Cost Review Commission agreed to lower the rates for inpatients by 1 percent but raise the rates for those receiving outpatient services by 2.59 percent, giving the hospitals an overall increase of 0.3 percent. The rates are for the year starting July 1.

"This is not a pop-champagne-corks-and-confetti kind of moment," said Carmela Coyle, president and CEO of the Maryland Hospital Association. "We are talking about a very difficult time for Maryland hospitals, even given this."

The panel had planned a slightly smaller increase for outpatients, giving the hospitals no bump, but they complained that their bottom lines were already suffering from the economy and several years of increases below the rate of inflation.

"We thought we were doing something balanced," said Patrick Redmon, the executive director of the commission. "But the proposals were not super far apart."

The hospital industry was pleased its proposal won the day but said it still doesn't fix the problems with healthcare costs and the state's unique rate-setting system.

Maryland's system, launched in the 1970s, aims to hold down costs by spreading the expense of patient care. All insurers, including private companies, the state, through Medicaid, and the federal government, via Medicare, pay the same rates. Maryland is the only state in the country with such a rate-setting program.

The system has been praised for holding down costs and spreading them equitably, but it also poses problems. Hospitals, insurance companies and the commission agree that it has become antiquated and needs to be updated.

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