Hospital rates could decrease if lawmakers succeed in passing a proposal to raise the cigarette tax to expand Medicaid coverage for Maryland?s uninsured.
But hospital regulators and the hospitals themselves disagreed Monday about how much rates could go down and how that would affect availability of care at some hospitals.
“[We need to know] how much money we could take out of the rates,” said Del. Peter Hammen, D-Baltimore City, chairman of the House Health and Government Operations Committee, which held a work session on the proposed health care coverage reforms. “We need the regulators and the hospitals to come together.”
Under Maryland?s current health care payment system, the costs of treating uninsured patients in hospitals and emergency rooms are built into the rates charged to all patients. That cost represents about 8 percent, or $800 million, of the hospital system?s estimated $10 billion in annual revenue, said Robert Murray, executive director of the state?s Health Services Cost Review Commission.
“The uninsured have better care in Maryland than in other states because the hospitals know the additional treatment will be paid for through the rates,” Murray said.
Murray said the proposed legislation, which aims to cut the number of uninsured in Maryland by at least one-third in the next year, could save an estimated $169 million by reducing the number of uninsured patients. That savings could then be used to increase health care coverage in the future, or could be used to match federal funding for health coverage.
But Peggy Townsend, a lobbyist for the Maryland Hospital Association, said the association and the commission still needed to resolve a dispute over the current rate plan that was just agreed to six months ago. Citing legal pitfalls in a health care expansion plan crafted in Massachusetts and the threat of falling federal match rates for Medicaid, Townsend said Maryland should be careful about making any quick decisions.
Townsend also said a cut in rates could also make it harder for some hospitals, such as Prince George?s Hospital, to pay physicians to treat patients.
In those cases, hospitals step in to fill the gap between the cost of treating large populations of Medicaid patients and the uninsured and the low reimbursement rates paid to physicians who treat them.
“Where would the savings go? Right now it just goes to public programs,” she said. “We need to think about who?s going to reap the benefit. We need to come to grips with some of these things.”
