Better Care, Improved Health & Reduced Costs: Maryland Reacts to the Affordable Care Act

MD HFMA & the Affordable Care Act
Growth of HSA-Qualified High-Deductible Health Plan Enrollment: Source – AHIP Center for Policy & Research, 2005-2013 HSA/HDHP Census Reports
Percentage of Primary Insured: Source – Washington Post Wonkblog: Do you Understand Health Insurance? Most People Don’t:
Maryland Quality-Based Payment Initiatives: Health Services Cost Review Commission:


Last week’s HFMA Maryland chapter event, The HealthCare “Three R’s”: Regulation – Reform – Reimbursement conference, shed light on the effects of the Affordable Care Act in Maryland, and how the local healthcare community is reacting to the reform.

In response to increasing deductibles and co-pays, the market is experiencing a shift from volume to value, which the Maryland healthcare industry is reacting to with quality and satisfaction programs both through the HFMA and the Health Services Cost Review Commission (HSCRC).

HSCRC Quality Initiative Associate Directors Diane Feeney and Alyson Schuster educated the attendees about the current quality programs in place in Maryland. The initiatives have a three part aim: better care, improved health and reduced costs for all patients. Each of the quality initiatives are required to meet or exceed the breadth and impact of Medicare’s quality programs in terms of measures and aggregate revenue at risk, and targets have been imposed for complications, readmissions and overall cost savings. The three initiatives in place at this time are as follows:

  • Quality Based Reimbursement (QBR): This program measures hospital performance on clinical process of care, clinical outcome, and safety measures as well as mortality rates.
  • Maryland Hospital-Acquired Condition (MHAC) Program: This program looks at 65 potentially preventable complications (PPCs) and links hospital payment to hospital performance by comparing the observed number PPCs to the expected number. PPCs are harmful events or negative outcomes that may result from the process of care and treatment rather than from a natural progression of the underlying disease. The program aims to achieve an overall 30% reduction in all 65 PPCs by the end of 2018.
  • Readmissions Reduction Incentive Program: Maryland’s readmission rate is high compared to the national average, so this initiative aims to reduce readmissions by 6.76% by 2018 by providing incentives to hospitals that can meet this benchmark, and penalties to those that cannot.

Feeney and Schuster explained that in each of these quality programs, the hospitals are given ratings based on their performance under each criterion. The scores are compared to program benchmarks and statewide averages and hospitals are either penalized or rewarded on a linear scale in the form of payments and rewards of .5% to 1% of hospital revenue.

According to Mike Robbins, Senior Vice President of Financial Policy for the Maryland Hospital Association, the state is generally on target to meet the goals of each quality initiative. He advised that the MHAC reduction is on target, with about a 21% reduction in PPCs to date. He also announced that the state’s financial tests and initiatives for changing budgets in the face of the Medicare expansion are on target. Readmission rate reductions are still short of the goal, but there are a number of metrics being monitored and the MHA is developing best practices in order to achieve the statewide goals.

In line with the shift from volume to value in the industry under the Affordable Care Act, Chad Mulvany, Director of Healthcare Finance Policy and Strategy and Development for HFMA International, suggested that proactive patient engagement with regard to billing is the key to combating increasing deductibles and out-of-pocket expenses.

Maryland hospitals are typically experiencing a decrease in volume of self-pay patients due to the Medicare expansion in the state. Mulvany indicated that, as of the July report, Medicaid had 6.7 million new enrollees, with another 2.9 million in backlog. The state has experienced a significant Medicaid expansion, which has resulted in a considerable decrease in self-pay patients.

Despite this, Mulvany advocated the benefits of being proactive with patients.  There is an overall feeling of “benefit shock,” from those who purchased plans from the exchange but do not understand them. According to the Washington Post, only 11% of primary insured people can accurately estimate their out-of-pocket responsibility, and only 14% can define four basic insurance terms.  With a steadily increasing number of people enrolling in high deductible health plans, communicating with patients before and at the time of service is becoming increasingly important.

Under the new Medicare waiver, all-payer model and state policies, all of the state’s hospitals are being evaluated together, so if one hospital fails they all fail. As a result, the trend in Maryland at this time is for hospitals to work together to reduce complication rates and to generally improve patient experience and satisfaction and to make the shift from volume to value in order to compete under the new restrictions and regulations of the Affordable Care Act.

Does your practice need help proactively engaging with patients? Visit our website to learn about our medical revenue cycle management solutions and how they can work for you.

Written by Ali Bechtel, Public Relations Coordinator

This information is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Although we attempt to provide up-to-date information, laws and regulations often change. We make no claims, promises, or guarantees about the accuracy or completeness of this document. For legal advice, please consult an attorney.

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