Maryland Hospitals Caught In Financial Squeeze

Just a month after denying Maryland hospitals' request for a rate hike, the seven members of the state's Health Services Cost Review Commission reversed course and unanimously approved a 1.65 percent increase, which goes into effect next month. But this is only a temporary solution to a much larger problem that should be of great concern to all state residents who assume that a fully staffed hospital will always be available when they need it.

The commission usually sets rates for a full year. However, commissioners approved this one only until December, citing continued uncertainty over how the higher rates will affect Maryland's unique Medicare waiver.

Maryland is the only state in the nation that is allowed to regulate its own Medicare rates, which are the same no matter where a patient seeks care. But there's a caveat. In order to maintain the waiver, every three months Maryland health officials have to demonstrate that the average cost of a hospital stay is growing at a slower rate than the rest of the country. That's an increasingly difficult thing to do because the state's success in reducing hospital admissions has raised the average cost of inpatient care.
More