Caution AHEAD: State officials nervous for Maryland hospitals under Trump administration

Yahoo

13-03-2025

The Trump administration announced Wednesday that it will be ending Maryland's unique hospital-rate setting program at the end of the year, a change that was not unexpected but that still has state officials on edge nonetheless. (Photo by Danielle Brown/Maryland Matters)
The Trump administration announced Wednesday that it will be ending Maryland's unique hospital-rate setting program at the end of the year, a change that was not unexpected but that still has state officials on edge nonetheless.
State health officials had planned to wind down the current Total Cost of Care program to transition into a new federal version of the program at the start of 2026. But amid a deluge of rapid federal decisions, the notice has legislative leadership nervous that Maryland's hospital system, which relies on federal funding to operate, could be at risk under the Trump administration.
'Unlike any other state – that (funding) upholds our entire hospital system across the state of Maryland. It's in jeopardy,' Senate President Bill Ferguson (D-Baltimore City) said in testimony Wednesday to the Budget and Taxation Committee.
His remarks were sparked by a statement from the Centers for Medicare and Medicaid Services Wednesday, announcing that the agency's Innovation Center plans to test, and then scale up, 'innovation payment models' that reduce spending while improving quality of care.
Maryland's Total Cost of Care model, which sets hospital rates in the state, was one of the programs targeted by CMS to end in December while moving forward with the state's transition into the Advancing All-Payer Health Equity Approaches and Development — or AHEAD — model, which is a federal version of Maryland's system.
Gene Ransom, CEO for MedChi, The Maryland State Medical Society, noted that the timeline for Maryland's plan to end the state system and transition into the federal plan has not actually changed, despite the agency's claim that it has decided to end the state program early.
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CM, 'We expected Total Cost of Care to end. That's why we entered into the agreement as a state to go to AHEAD,' Ransom said.
He said the state should continue to work with federal officials to keep the transition going forward, but notes that the Trump administration could be setting new expectations for what the AHEAD model will look like when it does take effect.
'It's one of those things that, as change occurs, it could be very nerve-wracking,' Ransom said. 'We need to all pay attention to the details and try to do everything we can to protect the interesting system that we built in Maryland.'
Under the current model, a state board sets annual hospital payments in advance, but includes patient outcome goals — reducing readmissions, for example — as incentives.
The state's model sets a 'global budget' for hospitals across the state, which is the total amount of revenue each hospital can earn in a year. The goal is lower cost burdens on patients and improving quality of care while disincentivizing profit-based motives.
In 2023, the Biden administration announced the creation of the AHEAD model, which takes a cue from Maryland and other states with similar systems by helping states transition into a Total Cost of Care model. Maryland officials were informed that they would need to join the AHEAD model in order to keep some of the funding and program flexibility currently available to the state under Total Cost of Care.
On Nov. 1, Gov. Wes Moore celebrated an agreement signed between CMS and the state to begin the transition officially with an 18-month transition process, with the state's Total Cost of Care model ending in December 2025 and the changeover finishing by January 2026.
But under the Trump Administration, CMS said it was cutting certain programs 'early' to save money. The announcement also targets two primary care programs and a program to encourage more home dialysis as well as kidney transplants for people with end-stage renal disease. They would be closed by the end of the year.
CMS estimates that cutting these programs early, including Maryland's Total Cost of Care program, will yield $750 million in savings nationwide.
'The CMS Innovation Center will continue providing transparency about important changes to advance its mission to lower costs and improve quality of care,' the statement said. 'The Center looks forward to sharing information about next steps, including its new strategic vision, modifications to models to improve their potential for certification and expansion and new models that empower Americans to live healthier lives while protecting taxpayers.'
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