Mid-Atlantic Health Law TOPICS

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Maryland Regulatory News - Summer 1997

1. The Health Services Cost Review Commission's (HSCRC) 1997 Annual Disclosure Report revealed that Maryland's cost per hospital admission was about 3% below the U.S. average in FY 1996. The HSCRC expressed concern that the average cost per Maryland hospital admission in 1996 increased by 4.52% compared to the national increase of 2.31%. To reduce hospital patient costs, on April 1, 1997, the MSCRC began to apply its new system correction factor of -3.86% to all hospitals seeking an inflation adjustment to their rates. Frederick Memorial Hospital was the first hospital subjected to the new correction factor and the procedure generated a -0.19% adjustment to Frederick's rates. A coalition of hospitals asked the HSCRC to reconsider the implementation of the correction factor and the HSCRC has appointed a task force to make recommendations in that regard in August.

2. The Health Care Access and Cost Commission's (HCACC) 1997 Annual Report, based on 1994/1995 data voluntarily submitted by payors, revealed that Maryland's 1995 health care expenditures were $14.3 billion - an increase of 1.5% from 1994. Over 80% of Maryland's 1995 health care dollars were spent in four areas: (1) hospital care - 37%; (2) physician services - 24%; (3) non-physician care - 14.4%; and (4) prescription drugs - 6.9%. Payments to practitioners decreased by 3% from 1994 to 1995. Beginning in 1997, all private payors are required to submit data on physician and other health care provider services to HCACC. The law requires that this data must be collected in a manner that does not identify the patient.

3. In April, the HRPC rendered a CON granted to Village Care Center (VCC) null and void. VCC received a CON to build a new 116-bed nursing facility in Baltimore County in April, 1988. Normally an applicant has two years to comply with the HRPC's first project performance requirement. From 1991 to 1995, the HRPC allowed VCC to modify its project, and the HRPC granted VCC several extensions of time to fulfill its CON performance requirements. In February, 1997, VCC requested another extension of time and project modification to join with two hospitals and to relocate the nursing home to the Owings Mills area. Citing no need for an additional nursing home in Baltimore County and the applicant's disregard for the regulatory process, the HRPC denied VCC's request for an extension of time and project modification, and also withdrew VCC's CON. VCC has appealed the HRPC's decision to the Circuit Court.


June 21, 1997




Rosen, Barry F.


Health Care