Mid-Atlantic Health Law TOPICS

1.This summer, the Health Services Cost Review Commission (HSCRC) finalized a rule related to Maryland hospitals? participating in the federal "340B" drug pricing program - a program which allows certain hospitals (and others) to access outpatient drugs at special discounts from manufacturers and resell these drugs to patients. The HSCRC traditionally exercised rate-setting authority over hospitals? pharmacy services (including those related to the 340B program) so long as those pharmacy services were provided "at the hospital." Under the new rule, the HSCRC will have rate-setting authority over outpatient services relating to each hospital's 340B program even if the hospital provides those services at another hospital campus.

2. The HSCRC also expanded its review of hospital change of control transactions. The old rule mandated that a hospital report to the HSCRC when the hospital pledged or transferred 50% or more of its operating assets to another entity. Now, a hospital must also report when "more than 50 percent of all corporate voting or governance reserve powers" of the hospital are transferred to another person or entity. Since Maryland hospitals typically affiliate through amendments to corporate governance structures, and not through sales of hospital assets, it is anticipated that the new rule will broadly expand HSCRC oversight of hospital affiliations.

3. Under Maryland's unique rate-setting system, the HSCRC sets an annual revenue cap for each hospital. This summer, the HSCRC finalized its FY 2016 "market shift adjustment" policy which will allow hospitals that gain market share to charge more than their cap, while lowering the cap for those hospitals that lose market share. A hospital gaining volume in a service line will gain revenue equal to half of its average charge to patients in that service line. Conversely, a hospital losing market share will lose revenue equal to half of its average charge to patients in that service line. For each hospital service line, the HSCRC will track year-over-year changes in the number of hospital discharges (adjusted for severity of illness) in that service line for (a) a particular geographical area as a whole, and (b) at each particular hospital serving that area. The "market shift" will be deemed to be equal to the net number of area cases lost by hospitals losing cases that year. Each hospital gaining area cases that year will be assigned a share of the "market shift" cases equal to the hospital's proportion of the increase in area cases that year amongst hospitals realizing an increase.

4. In August, the Maryland Health Care Commission (MHCC) released a report showing that Maryland office-based physicians have accelerated their adoption of electronic health records systems. The MHCC found that 64.3% of these Maryland physicians had adopted such systems by the end of 2014, outpacing the national rate of 54.0%. In contrast, at the end of 2009, only 18.6% of office-based Maryland physicians had adopted electronic health records systems, compared to 21.8% of office-based physicians nationwide.

5. Maryland's Board of Physicians recently restricted physicians' authority to delegate sleep studies. A licensed respiratory care practitioner who seeks to begin providing respiratory care in connection with a sleep study must now seek an additional license specific to sleep studies. A physician who delegates tasks to a respiratory care practitioner without this additional license may be punished by the Board.