KPMG Rate Memo - February 12, 2020

Dear Friends & Clients:

Highlights from the February 12th HSCRC Monthly Meeting: 

Staff Report on Medicare Advantage Hospital Quality Improvement Partnership

• Mr. Peterson provided an overview of a proposed grant program to incentivize partnership between Medicare Advantage and hospitals.
• In summary, the recommendation proposes making available $50M in grant funding for hospitals, funding to last no more than two years and go through a competitive bidding process.  Funding will be provided from anticipated savings and/or the update factor.
• Commissioner Bayless questioned the objectives of the grant and how they would help the overall aim of stabilizing the Medicare Advantage market. Chairman Sabatini expressed resolving the Medicare Advantage issue would be the highest priority of the Staff moving forward.

Recommendation on Capital Region Health One-Time Adjustments

• Jerry Schmith and Allan Pack outlined the HSCRC Staff recommendation for UM Capital Region Health
• In their analysis, Staff analyzed inpatient volumes shifted from Laurel Regional Hospital (LRH) to Prince George’s County Hospital, volumes shifted to other hospitals, and volumes that dissipated when LRH converted to an Free Standing Medical Facility (FMF)
• The final recommendation resulted in a total permanent reduction of $31M in PGHC’s GBR, and retention of $27M for capital expenses related to the construction of the PGHC facility

Other Topics Discussed

• Commissioners expressed concern over the impact of the Maryland Primary Care Program (MDPCP) on the Total Cost of Care (TCOC) Model. MDPCP payments are projected to double to $130M in 2020, without a clear methodology to measure TCOC savings as a result of the program.
• Allan Pack presented Staff’s final recommendation on the Complexity and Innovation Policy. The policy aims to provide a structured methodology to fund innovative therapies at the University Maryland Medical Center and The Johns Hopkins Hospital.
• Andrea Zumbrum and Geoff Dougherty presented the draft recommendation for RY2022 Readmission Reduction Incentive Program (RRIP). A key methodology change for the policy is the inclusion of the Patient Adversity Index (PAI), and incentives to reduce disparities in readmission rates across patient populations.
• Alyson Schuster presented Staff’s final recommendation on the RY2022 Maryland Hospital Acquired Conditions (MHAC) policy. The policy is largely consistent with the methodologies in the RY2021 policy.
• Laura Mandel presented an update on the measurement of Potentially Avoidable Utilization (PAU) . Staff are recommending changing PAU measurement to include a per capita approach for PQIs, including AHRQ’s Pediatric Quality Indicators (PDIs) with a per capita approach, and refining readmission measurement.

If you have any questions regarding the content of this e-mail or the Public Meeting discussions, please contact me at James Case at [email protected] / 410-949-8895 or Matthew Beitman at [email protected] / 410-949-2749.