Mid-Atlantic Health Law TOPICS

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Maryland Regulatory News Summer 2004

1. In March, the Maryland Health Care Commission (HCC) approved a Certificate of Need (CON) for Johns Hopkins Hospital to undertake a capital expenditure of over $25M to renovate 4 buildings and to update its power plant. In May, the Health Services Cost Review Commission (HSCRC) approved a 1.01% rate decrease for Hopkins, effective July 1, 2004, but with a 3.9% increase phased in over the life of the CON-approved renovation projects.
2. In March, the HCC released a report titled "Practitioner Utilization: Trends within Privately Insured Patients 2001- 2002." The report states that from 2001 to 2002, private insurers in Maryland reported a 12% increase in the quantity of physician and other practitioner services used by those under age 65. For the first time since 1999, payment rates for practitioner services rose for non-HMO plans and for fee-for-service payments by HMO plans. By April 2003, the average private fees for practitioners' services were about 3% above 1999 levels. Despite this fee increase, Maryland ranks in the bottom one-quarter of all states in terms of the ratio of private payors' average practitioner fees compared to fees paid by Medicare. According to the HCC, factors contributing to low private provider fees in the State are: an abundant supply of physicians, high managed-care penetration and proximity to the Northeast states in which private insurers pay low physician fees. (Although not mentioned by the HCC, low physician reimbursement in Maryland is also likely a by-product of Maryland's all-payor hospital rate system. Since hospitals may not give discounts to payors, payors may pay more attention to physician payments in Maryland than elsewhere.)
3. In March, the Department of Health and Mental Hygiene (DHMH) unveiled a new health disparities web site to raise awareness of health care disparities in Maryland and across the country. In addition, DHMH will work with Maryland's local health departments to target minorities for education, prevention, screening and treatment services.
4. In May, the HSCRC approved a 4.78% increase to inpatient hospital rates, effective July 1, 2004, as well as a 3.78% increase to outpatient rates. Low-cost hospitals will receive slightly higher increases, while high-cost hospitals will receive slightly smaller increases.
5. The Maryland Office of the Attorney General (OAG) is offering an online price comparison for prescription drugs for non-Medicare consumers. The prescription drug price finder at the OAG's web site www.oag.state.md.us/index.htm lists 25 of the most commonly used drugs in the area. The prices listed are the prices that pharmacies reported to the Maryland Medical Assistance Program as their most recent "usual and customary" prices.


June 22, 2004




Rosen, Barry F.


Health Care