On July 9, Governor Hogan and CMS Administrator Seema Verma held a ceremony at the Maryland State House to sign and officially enact Maryland’s Total Cost of Care All-Payer Model.  The Maryland Model is an innovative approach to healthcare provider payment that is unique to Maryland and made possible via a contract between CMS and the state.  The new contract, which takes effect on January 1, 2019 and extends through the end of 2023, is expected to provide $1 billion in savings over five years.

Maryland’s 2014 All-Payer Model has already saved Medicare more than $586 million through 2016, compared to national spending. Under this model, hospitals have successfully reduced unnecessary readmissions and hospital-acquired conditions while decreasing the growth in hospital cost per capita. The new Maryland Model will expand this approach across the healthcare system.  It aims to control the growth in healthcare costs, both at hospitals and community providers, while improving patient outcomes and quality of care. To achieve this comprehensive coordination across the entire healthcare system, the Maryland Model will:

• Coordinate care across both hospital and non-hospital settings, including mental health and long-term care
• Invest resources in care that is focused on the patient and enhance primary-care teams to improve individual patient outcomes ​
• Set a range of quality and care improvement goals and provide incentives for providers to meet them
• Concentrate system and community resources on population health goals to help address opioid use and deaths, diabetes, hypertension, and other chronic conditions
• Encourage and facilitate programs focusing on the unique needs of Marylanders across geographic settings and other key demographics

As the only state to operate under an all-payer model, Maryland is positioned for healthcare innovation.  The Maryland Model provides a significant incentive across the health system to provide greater coordinated care, expanded patient-care delivery, and collaboration of chronic disease management, while improving the quality of care at lower costs to the consumer.  It is a step towards aligning the entire delivery system by adopting the first alternative payment model to shift hospital payments to full global budgets.  Success will require both hospital and physician commitment to payment transformation and care redesign. The Model is expected to reward quality over quantity through a focus on how to best manage a patient’s care.  Emphasis is on improved primary care outcomes, coordinated, quality care, prevention and wellness.

The new Maryland Primary Care Program, which includes co-located Psychiatry, will expand service and access to thousands of Marylanders.  Practice applications for the program will be open from August 1 through 31.  Please click here for complete details.

Maryland now has the potential to create a model of healthcare integration that results in better healthcare outcomes while also bending the cost curve. To the extent that this new agreement aligns payment across providers to move from vendorship to partnership, it could create a quality care model for the nation; however, much work remains following this first step.