Medicare and Maryland: Lessons Learned

Maryland Total Cost of Care (TCOC) Model was developed by the CMS Innovation Center.

Maryland is different from every other state when it comes to healthcare initiatives. 

Putting aside that Maryland was the state where I grew up, I was intrigued by the recent announcement from the Centers for Medicare & Medicaid Services (CMS) for the new Total Cost of Care Model for Maryland’s Primary Care Program.

In Track 3, primary care provider (PCP) offices will be receiving a flat visit fee for select primary care services and a prospective population-based payment, adjusted up or down for performance-based outcomes. This program will run from 2023 to 2026 and will retire the Track 1 program, with a requirement for the full transition by 2024.  

Under this model, Maryland is on course to save Medicare $1 billion by the end of 2023, and continue to transform the model for primary care by covering care management services, reducing hospitalization rates, and improving the quality of care for Medicare beneficiaries.

So, how did Maryland become so special in the value-based movement? It originated from a 2008 pilot program on hospital-wide readmission reductions, intended to incentivize value over volume.

The Maryland Hospital Association (MHA) upped its game when it partnered with CMS in 2014 to launch the all-payor model, which established global budgets for certain Maryland hospitals to reduce Medicare hospital expenditures and improve the quality of care. The hospital payment program provides population-based payment amounts to cover all hospital services provided during the year, thus creating financial incentives for hospitals to reduce resource utilization to capture additional revenue.

In 2018, the Maryland Total Cost of Care (TCOC) Model was developed by the CMS Innovation Center to push care delivery standards across the care continuum. The TCOC Model is the first of its kind to hold the state fully at risk for the total cost of care for their Medicare beneficiaries.   

According to the MHA, the Maryland Model focuses on three pillars: equity, community, and value. So, how are they performing thus far? To date, Maryland has decreased its total cost of care spending growth rate by 3.8 percent, compared to the nation at large, and as of 2019, the cumulative impact of savings is up to $796 million. However, although inpatient visits have decreased, ED and observation stays have not. Likewise, of the inpatient hospitalizations, the patient severity (and thus payment per admission) has increased.

So, although CMS and MHA continue to experience success, I wanted to see what the frontline thinks – so I reached out to my trusty Maryland colleagues, Dr. Amit Wadhwa and Dr. Bernie Ravitz. I heard from them that like all things, the Maryland Model has its pros and cons, but they saw the benefits during the height of the COVID-19 pandemic, when their hospitals were trying to stabilize and manage patient volumes.

So, I ask: do you think the CMS payment system that Maryland has for the total cost of care could be replicated in other states?

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Programming Note: Listen to Tiffany Ferguson live reporting on the SDoH every Monday on Monitor Mondays at 10 Eastern.