Hospital Reimbursement Changes to Improve Market for Branded Drugs in Baltimore Changes to Maryland's All-Payer Hospital Rate Setting System Place Focus More on Outpatient Services Through Incentive Programs, According to Findings from Decision Resources Group

BURLINGTON, Mass., May 13, 2014 /PRNewswire/ -- Decision Resources Group finds that new legislation enacted in Maryland may have a significant impact on branded drugs sold in the Baltimore market. Health systems will have greater incentives to better monitor readmissions, hospital-acquired infections and population health through the revised all-payer rate setting system. The system was created decades ago, and Maryland is the only state that has it, but new rules adopted this year shift the focus to outpatient services and health outcomes. The state has also adopted separate step therapy legislation.

Other key findings from the Baltimore Market Overview report:  

  • By looking to reduce readmissions, hospitals will be placing a heavier emphasis on facilitating drug adherence for discharged patients. A second phase of the waiver program is planned that will go beyond the scope of hospitals to affect physician payment rates as well. 
  • While Johns Hopkins Medicine was chosen to participate as an accountable care organization (ACO) in the Medicare Shared Savings Program, substantial interest in commercial ACOs is not expected as the all-payer system makes it difficult for them to gain traction. Cigna, however, is involved in a commercial ACO with Greater Baltimore Medical Center.
  • The governor of Maryland has signed a bill that puts limitations on the ability of insurers to enact step therapy on medications, thereby giving doctors increased authority to prescribe branded drugs.

Comments from Decision Resources Group Analyst Christopher Silva:

  • "The model requires Maryland to limit its annual all-payer per capita total hospital growth to 3.6 percent. The state is implementing two bundled payment strategies under which hospitals are incentivized to eliminate unnecessary procedures."
  • "The national trend toward insurers engaging in narrow network activity with providers is not nearly as evident in Maryland, as the all-payer rate setting system effectively nullifies much of the gains that could be made by strategically including or excluding particular parties from such an arrangement."

About Market Overviews

Market Overviews offer curated, intuitive analysis of the major healthcare players and market drivers of the 87 most dynamic metro areas in the U.S. Exceptional insight on the influence, interaction and tensions between Health Plans, Physicians and Health Systems/Hospitals is combined with a customizable level of detail around each market. Unique, localized, event-driven thought leadership highlights the implications of mergers, acquisitions, enrollment shifts, disputes and other "market-movers." NEW ACO Spotlights feature a market-specific insight and implication dashboard. Visit http://hl-isy.com/Market-Overviews for more information.

About Decision Resources Group

Decision Resources Group offers best-in-class, high-value information and insights on critical issues within the healthcare industry. DRG insights and analysis on the U.S. managed care market are powered by HealthLeaders-InterStudy. Clients rely on this analysis and data to make informed decisions. Find out more at www.hl-isy.com and www.DecisionResourcesGroup.com.

All company, brand, or product names contained in this document may be trademarks or registered trademarks of their respective holders.

For more information, contact:

Decision Resources Group 
Christopher Comfort 
781-993-2597  
ccomfort@dresourcesgroup.com

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SOURCE Decision Resources Group



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