Mid-Atlantic Health Law TOPICS
Maryland Regulatory News Summer 2006
1. In March, the Maryland Court of Appeals ruled that the Maryland Health Care Commission (HCC) may approve a Certificate of Need (CON) application for a new cardiac surgery program if the new program is within the same service region as an existing program that does not meet the HCC's annual quota of 200 open heart surgery cases per year. The court's decision allows Suburban Hospital to proceed with the development of its new cardiac surgery program as approved by the HCC.
2. In April, the Health Services Cost Review Commission (HSCRC) approved a new three year rate arrangement with hospitals and payors. Hospital charges will increase by about 5% per year, with a 5.21% increase projected for FY 2007. This increase has two components, an increase in rates to cover expected inflation, plus an increase in rates to cover expected increases in the case mix of patients treated. Hospital outpatient rates are expected to increase by approximately 3.5% per year over the three year period. The foregoing is intended to cause Maryland hospital net operating revenue per equivalent inpatient admission to be 3.1% below the nation by June 30, 2009. Also, the HSCRC approved a new method of calculating the prospective levels of uncompensated care for hospitals.
3. In April, the HCC released its "Practitioner Utilization: Trends within Privately Insured Patients 2003-2004" report. The report states "that Maryland private insurers' practitioner payments continue to be below the national average." In 2004, the nation's private payments exceeded Medicare payments by about 20%, while private payments for non-HMO plans in Maryland exceeded Medicare by 2.6%. For participating physicians, non-HMO plans pay 2% less than Medicare and HMOs pay 5% less than Medicare. Under non-HMO plans, non-participating Maryland physicians accounted for 11% of the payments and were paid about 63% above the Medicare level, and under HMO plans non-participating physicians accounted for 6% of payments and were paid about 39% above the Medicare level.