The State of Maryland is leading a transformative effort to improve care and reduce the growth in health care spending. On January 1, 2014, the State of Maryland and the Centers for Medicare & Medicaid Services (CMS) entered into a new initiative to modernize Maryland’s unique all-payer rate-setting system for hospital services. As the State’s hospital rate-setting authority, the HSCRC plays a vital role in the implementation of this innovative approach to health reform.

This initiative replaced Maryland’s 36-year-old Medicare waiver and allowed Maryland to adopt new and innovative policies aimed at reducing per capita hospital expenditures and improving patient health outcomes. Stated in terms of the “Triple Aim,” Maryland strives to transform its health care system into one that enhances patient care, improves health, and lowers costs.

The All-Payer Model successfully reduced costs to purchasers of care—businesses, patients, insurers, Medicare, and Medicaid—and began to improve the quality of the care that patients receive both inside and outside of the hospital. Since 2014, the State, in close partnership with providers, payers, and consumers, has made significant progress toward this modernization effort. 

Under the new “Total Cost of Care Model,” which began in January 2019 and builds upon the successes of the All-Payer Model, Maryland will progressively transform care delivery across the health care system with the objective of improving health and quality of care.  At the same time, the State's growth in Medicare spending must be maintained lower than the national growth rate.  The Total Cost of Care Model will give the State flexibility to tailor initiatives to the Maryland health care context, and encourage providers to drive health care innovation.  The Total Cost of Care Model encourages continued Care Redesign, and provides new tools and resources for primary care providers to better meet the needs of patients with complex and chronic conditions and help Marylanders achieve better health status overall.   Terms of the agreement can be found here, and additional details on the Model can be found on the Modernization tab.