Mid-Atlantic Health Law TOPICS

1. The new Maryland Health Benefit Exchange has installed Rebecca Pearce as its first Executive Director. Ms. Pearce previously worked for Kaiser Permanente and CareFirst before her appointment as the Exchange's top official.

2. The Maryland Health Care Commission (MHCC) published a new analysis of insurance data from Maryland's Medical Care Database. The MHCC found that in 2009, subscribers in the small group insurance market spent over 50% more on all medical services (inpatient, outpatient, and prescriptions) per enrollee, on average, than subscribers in the individual market. The report attributed the difference, in part, to adverse selection caused by the benefit and cost-sharing mandates of Maryland's Comprehensive Standard Health Benefit Plan, as well as medical underwriting in the individual market.

3. When the General Assembly relaxed Medicaid eligibility rules and expanded small business health insurance subsidies in 2007, it also enacted an assessment on Maryland hospitals to pay for the program, on the theory that increased Medicaid enrollment would result in fewer non-paying patients, thus averting bad debt. The assessment was set prospectively based on estimated averted bad debt, paid to Medicaid, and finally reconciled in later fiscal years. The Health Services Cost Review Commission (HSCRC) found that for fiscal year 2010, the assessment had overestimated averted bad debt by $10.9 million. The HSCRC reconciled the resulting overpayment by ordering a corresponding $10.9 million credit in other Medicaid assessments.

4. The HSCRC also issued new scaling rules to implement its quality based reimbursement (QBR) and Maryland hospital acquired conditions performance (MHAC) programs. The HSCRC will allocate 0.5% of hospital revenue to QBR metrics and 2.0% of hospital revenue to MHAC metrics. The QBR and MHAC allocations are scaled relatively such that the resulting revenue adjustments will be revenue neutral on a system-wide basis.