For better health at lower cost, fix Maryland's Medicare waiver

We live in a time of great change in terms of our medical care: how we access it, how it is coordinated, and who pays for it.

The change we face in health care is kind of like going back to the future; like the house calls of old, more health and long-term care will be provided within the local community. And with greater access to care, people will increasingly become more responsible for paying for care and navigating care delivery.


We are seeing revealing new trends as today's younger seniors are rightfully and fortunately remaining engaged, aging in place, and only episodically interacting with hospitals and medical centers while rehabbing or receiving transitional care in our skilled nursing centers. With more than 10,000 people turning 65 every day over the next 19 years across the U.S., these trends will continue.

While Maryland's world-class medical centers will continue to provide the most complex care and surgery, neighborhood nursing homes will have increasing roles to play in helping consumers and families to connect the dots for the best care possible as they provide complex post-acute, transitional, rehab and long-term care. Modernizing Maryland's hospital waiver will be key in this work.


Maryland's waiver to the Social Security Act is unique in the nation and was developed decades ago, when it made sense to manage inpatient hospital costs through measures of the day, such as cost per discharge and length of stay. The waiver was developed in an era of little health-care integration that was dominated by the delivery of acute, episodic medical care in hospitals.

Today, we find ourselves in a world correctly focused on integration across a broad health care and long-term care spectrum: acute care, sub-acute care, chronic care, rehab and transitional care, delivered in multiple settings. The aim of such a system — helping to keep people healthy and engaged while driving down the total cost of care — looks beyond the cost per case for admission and discharge from hospitals.

Maryland's skilled nursing and rehabilitation centers provide over 8 million patient days of care a year, while Medicaid payments to skilled nursing and rehabilitation centers grew at the lowest annual rate among all classes of Maryland Medicaid providers. Our costs grew at an average rate of 6.6 percent from 2000‐2008, a lower rate of increase than for overall Medicaid payments in Maryland (8.1 percent), or payments for hospital inpatient (7.4 percent) and hospital outpatient (12.5 percent) services in the state.

Modernizing the Medicare waiver will allow us to work together to integrate care and align resources to help Marylanders stay well or get better.

One way Maryland's skilled nursing and rehabilitation centers can be a part of the solution going forward is by working in partnership with hospitals, other providers and patients to help Marylanders with chronic diseases such as congestive heart failure, diabetes or obesity to manage those chronic conditions and to turn the corner toward better health. Maryland nursing homes have doctors, nurses, nurse's aides, rehab specialists, social workers and registered dietitians; all of these experts have the potential to help people to avert readmission to hospitals and remain healthy and engaged at home.

Maryland nursing homes could also help if there were more flexibility around the Medicare three-day hospital stay rule. The long-established federal Medicare rule requires that elderly and disabled Medicare beneficiaries be admitted into a hospital for three days before they can access the rehab benefit under Medicare and receive care in a nursing home before returning home.

In recent years in Maryland and across the nation, there has been an increase of observation stays in hospitals. During an observation stay, a person can spend one to three days in a hospital but never actually be admitted for an inpatient stay. Under current Medicare rules, an older or disabled Marylander in the hospital on observation days is not eligible to receive care paid for by Medicare in a nursing home. Such patients are billed separately and must pay out of pocket for co-pays in the hospital, just as they would had they gone to a doctor's office.

Allowing more flexibility around the three-day rule would mark a step toward rationality by enabling patients to step down to a less-expensive care setting closer to home as soon as they are ready, rather than having to waste time and money in an unnecessary acute hospital stay. And Maryland has a unique opportunity to pilot such a change because of our long-established hospital waiver and the rulemaking authority of the Maryland Health Services Cost Review Commission.


Finally, we also have a shared responsibility, with the modernization of the waiver, to redouble our efforts to confront the important issues of health care disparities in Maryland. According to presentations made by leaders of the Maryland Department of Health and Mental Hygiene, Maryland ranks 19th in overall health, 41st in infant mortality and 27th in preventable hospitalizations.

There are dozens of hospitals and medical centers in Maryland, each critical to a healthy Maryland; and there are hundreds of skilled nursing and rehabilitation centers in communities across the state — proven providers of quality and efficient long-term, rehab and transitional care. By modernizing the Medicare waiver, Maryland's elected and government leaders in Annapolis and Washington, D.C., and those of us working with them have an opportunity to move forward in shared interest for a healthier Maryland and again lead the nation.

Joe DeMattos is president of the Health Facilities Association of Maryland, which represents most of the state's 233 skilled nursing and rehabilitation centers. His email is