Maryland Could Lose Medicare Waiver Without Slowed Spending Growth

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Unless Maryland can suppress its healthcare cost growth, it stands to lose more than $1 billion in Medicare payments by losing its eligibility for a waiver that grants it full reimbursement from CMS, rather than the discounted rates all 49 other states receive, according to a report by the Washington Post.

A unique exception since 1977, Maryland's Health Services Cost Review Commission has been permitted to set the state's reimbursement rates for all payors, including Medicare, which secures it an additional $1.6 billion in federal revenue. In all other states, CMS pays providers at a discounted rate based on a federal standard, for which private insurers index their own payments.

However, Maryland will lose eligibility for this authority if it doesn't keep its cumulative spending growth below national payments, and it is currently projected to fall less than 2 percent below that mark this year. Hospital executives said losing the waiver would be "catastrophic" to Maryland providers, leading to downgraded credit ratings for hospitals and shuttered physician practices, according to the report.

John Colmers, chairman of Maryland’s Health Services Cost Review Commission, told state lawmakers that he was "greatly encouraged" by talks with CMS on continuing the waiver, according to the report. He added that shifting the metric to cost per episode of care or per capita, rather than cost per hospital stay, should help the state stay below the national norm.

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