Mid-Atlantic Health Law TOPICS

1. In December, the Maryland Health Care Commission (HCC) granted a Certificate of Need (CON) to Suburban Hospital for a new open heart surgery program. The HCC previously had determined that a new open heart program was needed in the Maryland suburbs of Washington D.C. The Suburban program includes an affiliation with Johns Hopkins Hospital and the National Institutes of Health. Also submitting CON applications were Holy Cross Hospital, Shady Grove Adventist Hospital and Southern Maryland Hospital Center.

2. The Maryland Health Insurance Plan (MHIP) was created by the General Assembly in 2002 to provide comprehensive health benefits to medically uninsurable individuals, and replaces the SAAC program on July 1, 2003. Historically, a health plan that offered an open-enrollment health insurance product in Maryland was given a 4% SAAC discount on hospital services provided to any of the plan's subscribers, which discount was used to fund the losses associated with its open enrollment product. On the other hand, MHIP will be funded by an assessment by the Health Services Cost Review Commission against all Maryland hospitals, which assessment is intended generally to equal the old 4% SAAC discount. The new assessment will change annually, and will be based on a hospital's budgeted revenue. SAAC carriers must provide coverage to SAAC enrollees through June 30, but those carriers will lose the 4% discount on March 31, 2003. MHIP is to devise a method to compensate the SAAC carriers for losses incurred during the transition.

3. In January, the HCC released its State Health Care Expenditure report for 2001. Overall health care expenditures increased 11.8% in 2001 and totaled $21 billion, compared to $18.8 billion in 2000. The rate of growth was the most rapid since the HCC began estimating expenditures in 1994. Prescription drug spending increased by 14% in 2001, compared to increases of 11% and 22% in 2000 and 1999, respectively. Hospital outpatient services increased 18% and non-physician professional services grew by 15%. In 2001, Medicare and Medicaid expenditures grew faster (13% each) than the expenditures by private insurers (11%) and consumer out-of-pocket expenses (12%).

4. In January, the HCC released its final report on patient safety, as commissioned by the General Assembly in 2001. To reduce the incidents of preventable adverse medical events to patients, the HCC recommended: (a) the establishment of the Maryland Patient Safety Center to act as a clearinghouse and repository for de-identified, voluntarily reported patient safety information; (b) the use of the State's regulatory authority to promote systems improvements to avert adverse events; and (c) the promulgation of new regulations requiring hospitals to report events that result in patient death or serious disability to the Department of Health and Mental Hygiene with a corresponding confidential root cause analysis.