Module Components

• Overview
• Assignments

Topics

• MD: The ONLY State without DRGs
• Current Challenges
• Moving Forward

NDNP 803 - Executive Leadership and Healthcare Economics

Module 12: Reforming Health Care in Maryland

Current Challenges

Maryland has been a pioneer in regulating hospital rates through a state agency known as the Maryland HSCRC. Introduced in the 1970s, when Maryland had the second highest hospital costs in the nation, the HSCRC was a vehicle to set rates for hospitals and to gradually ratchet down costs. As a result, the state's hospitals moved from near the most costly to among the more cost-effective hospitals in the nation. One of the unique and most important features of the HSCRC is the "all payer" nature of the state. Rather than requiring hospitals to shift the costs of the uninsured to a diminishing group of commercial payers, the HSCRC requires all payers to pay the same rates, effectively eliminating discounting and spreading the cost of the uninsured over many payers.

However, over the past decade with the cost-containing managed care initiatives, other states have narrowed the gap, and Maryland faces the potential elimination of the waiver that allows Maryland to be exempt from the Medicare DRG reimbursement structure.