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Maryland All-Payer Hospital Model Saves Medicare Millions

March 21, 2018

An all-payer hospital model launched in Maryland in 2014 has saved Medicare hundreds of millions of dollars in the first 3 years, according to a recent report by the Maryland Department of Health.

In 2014, Maryland launched a new payment model for hospitals, in partnership with the CMS, to limit the growth of hospital costs per capita and improve the quality of care in state hospitals. The model works by holding hospitals accountable for the total cost of hospital care on a per capita basis.

“By the end of performance year three, the Maryland Model is on track to meet the targets of the All-Payer Model Hospital Agreement with CMS,” the state wrote in the newly released report. “Provider-led delivery system transformation has continued to accelerate over time. The State aims to improve beyond these results and continue to reduce costs while improving quality of care in Maryland through the completion of the current model term, and continue under a new Total Cost of Care Model.”

Results from the program show that it saved Medicare $586 million in hospital payments and $461 million in overall costs of care during the first 3 years.

Additionally, researchers found that the program also improved the quality if hospital care in Maryland and reduced patient complications. The report notes a 79% reduction in the gap of readmissions compared to the nation since 2013, and Maryland will likely close the gap by the fifth year of the program.

The report notes that the program is on target to meet the goals for cost savings and patient safety set by the CMS.

David Costill

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