Md. regulatory agency limits rate increase by hospitals

April 07, 1994|By Joel Obermayer | Joel Obermayer,Sun Staff Writer

Hospital rates in the state will outpace inflation, but not by as much as first planned.

That was the decision yesterday by the state agency that sets hospital rates -- a move that may save Maryland consumers an estimated $25 million in health care charges this year.

The Maryland Health Services Cost Review Commission said the hospitals must forgo part of their automatic annual rate increase for new services and capital projects. Hospitals will be allowed to raise rates about 1.5 percent more than inflation instead of the slightly more than the 2 percent that the state's formula allows.

The commission, as well as hospital industry representatives, said the decision was in response to figures that show Maryland hospital rates rose faster than those in the rest of the country in 1993.

"Last year we were over the mark for the first time ever," said Larry Lawrence, executive vice president of the Maryland Hospital Association. "We wanted to help assure we will be under the mark in the coming year. We still have a long way to go to do it, though."

The state's hospital rate increases have become an issue in the last two months as at least two hospitals have asked for and received permission to lower their prices. Both moves were part of efforts to stem losses of patients to lower-cost medical providers.

But the regulatory agency said those competitive factors were not part of its decision. "It's a routine adjustment," said John M. Calmers, executive director of the Health Services Cost Review Commission.

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