In the 1976 movie All the President’s Men about Watergate, the informant “Deep Throat” tells Bob Woodward (played by Robert Redford) to “just follow the money” to understand what happened and why. The saying is true in health care, too.
In January 2014, Maryland dramatically shifted the financing of health care within the state by implementing global budget revenue (GBR) for all hospitals in Maryland. As previously discussed in the April 2014 issue of ACEP Now, this population-based payment model caps total hospital revenue growth. The rates and hospital revenues are set by the Health Services Cost Review Commission (HSCRC) for all acute-care hospitals in Maryland. The HSCRC has been in existence since 1974 as part of Maryland’s all-payer system that includes Medicare and Medicaid.
GBR was negotiated between the state of Maryland and the Centers for Medicare & Medicaid Services (CMS). The GBR essentially changes the payment system from a retroactive fee-for-service system to a prepaid global budget, which the hospitals must manage effectively.
While GBR does not currently directly impact health care providers and our fee-for-service model, it has the potential for expansion to providers in the future. If successful, this program has the potential for national dissemination by CMS and could dramatically impact how we practice emergency medicine.
GBR, which was implemented at the same time as the Affordable Care Act (ACA), has five main objectives related to population health and cost containment:
- Save Medicare $330 million over five years.
- Limit per capita yearly growth to less than 3.58 percent.
- Decrease 30-day hospital readmission rates.
- Decrease hospital-acquired conditions by 30 percent over five years.
- Keep growth of Medicare spending to less than 0.5 percent below the national average.
Initially, with Medicaid expansion and the ACA, there was a positive revenue impact for emergency providers in Maryland due to a decrease in self-pay patients and an increase in Medicaid coverage. This is consistent with what has been seen with the ACA in other states. With the advent of GBR, hospitals were now on the hook for providing care to a certain population, and there were efforts to improve resources such as increased case management and social services in the emergency department. These are positive changes, welcomed by the provider and patient community. Unlike other states, after Maryland implemented GBR, emergency department volumes have remained flat, and hospital admissions have not changed or have gone down for many hospitals.