Weekly Messages From MHA

Weekly Message From MHA

The Differential Makes a Difference

August 24, 2018 By: Bob Atlas

It’s just 20 weeks until the launch of Maryland’s new hospital payment model. The Health Services Cost Review Commission is considering an important proposal that will help to get the model off on the right foot. The proposal is meant to adjust for the growing bad debt hospitals are seeing from commercially insured patients, the effect of which has been to shift costs onto Medicare and Medicaid.

MHA supported the proposal, to increase the public-payer differential by 1.7 percentage points to 7.7 percent, in a June 20 letter to the commission. Several hospitals also submitted letters of support. More hospitals need to make their voices heard.

HSCRC staff’s rationale for this recommendation is spot-on: “Over the past few years, uncompensated care for commercially insured individuals has been increasing as a result of commercial plan design changes that increase the level of patient deductibles and co-pays.”

An added benefit of the proposed adjustment is that it would support not only success under the model, but also the state’s broader efforts to ensure that all stakeholders are contributing to meet the model’s goals.

Coincidentally, the change could help offset the costs of the Maryland Primary Care Program – a last-minute addition made by the federal government just before the contract was signed – by as much as $40 million. That would help to reduce Medicare expenditures and give hospitals more leeway to continue to invest in initiatives to improve the health of their communities.

The topic has gotten some media attention in recent weeks, with an article in The Daily Record and some chatter at last week’s Maryland Association of Counties conference. MHA is closely monitoring the progress of the recommendation and will remain vigilant as it makes its way through the approval process with commissioners.

Hospital and health system leaders can help ensure that commissioners approve the proposal. Let it be known that you truly are seeing the growth in uncompensated care from patients who have private insurance but cannot pay their high cost-sharing obligations. Put the word out about the importance of having a system in which there is a proper balance of contributions from all payers.