Maryland on Friday became the first state to join a federal program designed to improve the quality and equity of health care, while reducing costs for all health care payers, including Medicare, Medicaid and private insurers .
It is based on the Maryland Total Cost of Care Model, which sets a per capita cap on the total cost of Medicare care in Maryland and encompasses the state’s unique all-payer hospital payment system, which reduces hospital spending per capita and supports better health outcomes, as promoted by the Affordable Care Act.
This new federal framework, known as the AHEAD model, has been designed to provide high-quality health care through greater coordination, with a focus on health equity and social needs to support underserved patients.
“The AHEAD model is the next chapter in health care, so we are proud to be writing that new chapter right here in the state of Maryland,” said Gov. Wes Moore, a Democrat who signed the agreement with the administrator of the US Centers for Medicare and Medicaid Services, Chiquita Brooks-LaSure.
Since the 1970s, Maryland has had a universal hospitalization system that allows the state to set its own rates for hospital services, and all payers must charge the same rate for services at a given hospital.
It is designed to provide equitable access to care, eliminate the need for charitable hospitals, and ensure that patients receive the same treatment regardless of their insurance status. State law authorizes the system, which bases costs on rates set by hospitals. It has remained the foundation of every subsequent evolution of Maryland’s health care model.
“Maryland has this unique system that we’ve developed over several decades,” Democratic Sen. Chris Van Hollen told reporters after a news conference in Annapolis. “We are taking it to the next level with the signing of this AHEAD agreement, and the end result is that it helps us achieve three main priorities: equity, quality and affordability. That is the goal.”
The Maryland Department of Health will begin planning for implementation of the AHEAD model beginning January 1, 2025. This will include setting targets for cost growth, quality and equity improvements, population health and investments in primary care, as well as identify regional partnerships to advance AHEAD goals.
Sen. Ben Cardin said the agreement keeps in place the state’s policy that health care providers receive equal payment for services, so hospitals have incentives to provide equal care, whether you have private insurance, government insurance or don’t have insurance
“Second, we are now committed to ensuring that we have the most effective quality care,” said Cardin, a Democrat. “That’s why we invest in primary care. “We invest in early detection and prevention, so we can keep them healthier and not have to spend as much time addressing their healthcare needs.”
The Centers for Medicare and Medicaid Services has selected five additional states (Vermont, Connecticut, Hawaii, Rhode Island, and regions of New York) to participate in the AHEAD Model.
“Maryland’s participation in the AHEAD Model is a critical step to improve the overall health of its residents, support primary care, transform health care in communities across the state, and address disparities in the health care system,” Brooks-LaSure said.
