CMS Approves Maryland's Total Cost of Care All-Payer Medicare Model - What This Means to Health Care Providers

Maryland health care providers, from the smallest primary care office to the largest hospital system, need to know that the Total Cost of Care All-Payer Medicare Model (“TCOC”) offers them an opportunity to increase revenue while simultaneously increasing the quality of care rendered to patients.  By implementing the TCOC, Maryland health care providers, especially primary care and community-based providers, can anticipate increased revenue and additional incentives for offering services geared towards (1) treatment of certain chronic conditions and (2) offering services aimed at reducing a community’s dependence on hospitals for non-emergency medical care.

On May 18, 2018, the Centers for Medicare and Medicaid Services (‘CMS”) and Maryland Department of Health (“DOH”) jointly announced that the federal government approved Maryland’s Total Cost of Care All-Payer Model.  The TCOC replaces Medicare’s traditional payment model, where providers are paid based upon the volume of service provided.  This “fee-for-service” model was developed to provide a high-level care by ensuring that Medicare members have access to the health care services needed to maintain a healthy standard of living.  As heath care services in the United States have modernized, policy makers have realized that higher volume of services does not always correlate to higher quality of care.  To better incorporate high-value care, Medicare has moved toward tying payment to the value of the services provided.

The TCOC establishes a per capita limit on Medicare’s total cost of care in Maryland and shifts the total cost of care for Medicare beneficiaries from the federal government to the state.  The TCOC creates new opportunities for community-based health care providers to earn monetary bonuses while decreasing Medicare spending across Maryland.  Between 2019 and 2023, the TCOC will strive to modernize the delivery of health care services within the State by increasing the availability of expanded primary care services.  By increasing that availability, the TCOC will improve population-based health outcomes while reducing the need for emergency room visits and in-patient hospitalizations.

The TCOC will attempt to build upon the momentum gained from prior modernization efforts and expand the framework to both hospital and non-hospital health care providers in the care and treatment of the following conditions:

  1. Substance-Use Disorder;

  2. Obesity;

  3. Smoking;

  4. Diabetes;

  5. Hypertension; and

  6. Asthma.

The TCOC will include non-hospital health care providers, and it will be open to all Maryland primary care providers.  To encourage health care provider participation, the TCOC will be broken into three sub-programs:

Maryland Primary Care Program. 

The goal of this program is to incentivize primary care providers to offer additional services in an effort to reduce hospital admissions, including electronic medical records, round-the-clock telephone access to care providers, and enhanced follow-up services following emergency department and hospital visits.  This program will provide primary care providers with an additional payment per beneficiary per month for offering these care management services.  This program will also offer a performance-based incentives aimed at reducing hospitalization of beneficiaries by improving services and quality of care at the primary care level.

Care Redesign Program. 

This program is geared towards incentivizing non-hospital health care providers who work with hospitals to improve quality of care through care redesign activities.  Under this program, hospitals would provide or make available incentive programs to non-hospital health care providers who work to provide more health care services outside of a hospital setting.

Hospital Payment Program. 

This program aims to provide each hospital with a population-based payment to cover all hospital services provided by that institution during the year.  This program seeks to create a financial incentive for hospitals to reduce the number of unnecessary testing, procedures, and hospitalizations while providing greater value-based care.

To establish budgets best suited for implementing the TCOC into Maryland’s health care infrastructure, the DOH will set its own health care services measures and incentives under each of the three sub-programs that will be subject to CMS approval.  Once approved, CMS will provide the DOH with “Outcomes-Based Credits,” which will enable the DOH to receive credits based upon the performance of each of the three sub-programs.  The credits will be based upon CMS’ return on investment into the TCOC as compared to the cost of Medicare under the current national model.

The TCOC will begin on January 1, 2019 and run until December 31, 2026.

For more information about the TCOC and the opportunities it presents, please contact Greg Garrett or any member of the Tydings' health care practice group.

This information has been prepared by Tydings for informational purposes only and does not constitute legal advice.