When it comes to health care reform, Maryland is in a unique situation thanks to its decades-old Medicare waiver. That waiver may be in jeopardy, however, as state officials push to keep its $1 billion in reimbursements from the federal government.

The agreement, enacted in 1977, lets the state set its own Medicare and Medicaid payment rates -- the only state in the country with that ability. There's a condition, though -- the rate of growth in state payments cannot exceed the rate of growth in national payments.

"Maryland's kind of leading the pack in terms of being ready for health care reform," said Maryland Hospital Association spokesman Jim Reiter. "The cost of caring for the uninsured is spread evenly among everyone through a small addition to hospital rates."

As health care costs have increased, however, Maryland has come closer to failing the waiver test and losing its special status. State officials are trying to forge a new agreement with the federal government, changing the waiver test to an easier benchmark. They're arguing that losing the waiver would put a massive burden on hospitals and patients. Medicaid is the federal health insurance program for the poor, while Medicare serves the elderly.

"These discussions with Medicare around the waiver test are largely around how it is we can redesign our delivery system to result in better care, lower cost and better health," John Colmers, chairman of the state

Health Services Cost and Review Commission, told the state Senate Budget and Taxation Committee. "The waiver test is a way of achieving that." - Matt Connolly