The Centers for Medicare and Medicaid Services has announced that it is expanding its all-payer model in Maryland to include outpatient services, in its first test to hold a state fully at risk for the total cost of care for Medicare beneficiaries.
Maryland's all-payer model launched in 2014, and has to date focused on hospitals.
The new total cost of care model being released by the CMS Innovation Center, will work in much the same way, setting a per capita, population-based payment.
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CMS said it expects to save $1 billion between 2019 and 2023.
The model includes a care redesign program to allow hospitals to make incentive payments to non-hospital healthcare providers, if the hospital has attained certain savings.
CMS is incentivizing primary care providers to offer advanced care services by giving practices an additional per beneficiary, per month payment. The agency is also giving a performance-based incentive payment to reduce the hospitalization rate.
CMS has targeted six high priority population health areas for improvement: substance use disorder, diabetes, hypertension, obesity, smoking, asthma.
The performance period begins January 1, 2019 and ends on Dec. 31, 2026.
The Maryland all-payer model achieved significant savings for Medicare and improved quality, according to the third annual evaluation released in March.
"Maryland hospitals were able to operate within their global budgets without adverse effects on their financial status," the report said.
They were also able to reduce expenditures without shifting costs to other parts of the healthcare system.
During the first three years, Medicare saved $679 million in the all-payer model, a 2.7 percent reduction in total Medicare expenditures.
The reductions were driven by reduced expenditures for outpatient hospital services, the report said.
The report showed that under the all-payer model, coordination of care with outside providers in the community, as measured by follow up visits after hospital discharge, had not improved.
Expenditures for emergency room visits and observations declined, but the rate of these visits increased for Medicare beneficiaries and declined for commercial members.
Inpatient admissions declined for both Medicare beneficiaries and commercial plan members.