The state board that sets the rates for Maryland’s hospitals says there won’t be a rate change this fiscal year to compensate for the effects of federal budget cuts, but hospital officials worry that yet another financial hit will lead to layoffs.
A 2 percent reduction in federal Medicare spending began April 1, but the state Health Services Cost Review Commission decided May 1 not to increase hospital rates to make up for the lost revenue.
However, the commission will consider the effects of the cuts in June, when it weighs rate adjustments for fiscal 2014, said Steve Ports, the group’s principal deputy director.
Carmela Coyle, president and CEO of the Maryland Hospital Association, worries that the impact could get lost in such discussions, and that having to absorb the lost Medicare revenue will be only the latest blow to medical facilities.
“A continued worsening of hospitals’ financial condition will cause job losses,” Coyle said. In the past few years, hospital rates have not been able to increase at the rate of inflation, she said.
“Hospitals have basically been experiencing cuts for the last four years,” Coyle said, adding that many in the state were operating at a loss.
The association plans to work with the commission before the June meeting to try to ensure a rate increase in the coming year,” Coyle said.
Cost-review commission staff recommended making no change to the hospital rates so as not to jeopardize the state’s Medicare waiver, part of a unique arrangement with the state where Medicare pays Maryland medical rates as long as the state payments don’t grow faster than national Medicare payments.
Hospitals in Montgomery County are still evaluating the full impact of the Medicare cuts on their operations.
Tom Grant, a spokesman for Adventist Healthcare, which operates hospitals in Rockville and Takoma Park, issued a written statement expressing disappointment in the commission’s choice but pledging to continue working to improve its efficiency.
Ann Nickels, a spokeswoman for MedStar Health, which operates Montgomery Medical Center in Olney, said in a statement that MedStar was evaluating all options but had no further information.
This week, the federal Center for Medicare & Medicaid Services released the average charges for 100 common procedures at hospitals around the country, showing substantial variations in what the same procedures cost at different hospitals.