Maryland commission to lower rates 1% at 10 hospitals

cost task force meets

System for controlling costs finds them rising

Health care

September 02, 1999|By M. William Salganik | M. William Salganik,SUN STAFF

The state's hospital rate-setting commission said yesterday that it will trim rates by 1 percent at 10 hospitals, and it convened a task force to redesign its cost-control system.

Both come as the Health Services Cost Review Commission struggles to fix a system that is supposed to keep costs down but has seen Maryland costs climb.

The cost of an average hospital stay in Maryland was 12 percent less than the national average in 1992 but was 8 percent higher than the national figure last year.

The cuts came automatically because the state's hospitals are not on target for cost reductions. Those affected are hospitals that chose to have their rates controlled by an inflation formula. Most are small.

The majority of the state's hospitals chose to be measured according to their charge per case. Though not affected by the cuts announced yesterday, they are subject to penalties later if they fail to meet targets.

Hospitals where rates are being cut are Calvert Memorial in Prince Frederick, Doctors in Lanham, Fallston General, Frederick Memorial, Garrett County Memorial in Oakland, Harford Memorial in Havre de Grace, Kent & Queen Anne's in Chestertown, St. Mary's in Leonardtown and the cancer center and the Maryland Shock Trauma Center at University of Maryland Medical Center in Baltimore. (The rest of the UM center is not involved in the action.)

A task force to redesign the way the state controls rates met for the first time yesterday. It includes members of the commission and representatives of hospitals, insurers, business and labor.

"The question is not whether we're going to have a rate-setting system," Don S. Hillier, chairman of the cost review commission, told the task force. "We want to design a rate-setting system that will carry us forward and do a better job."

Hillier said the system must continue to include ways of paying for care for the uninsured and for the costs of medical training, and to "preserve or improve quality."

The task force hopes to devise a plan by January so that if legislative action is needed, it can be considered in next year's session. The new system would become effective in July.

Also at yesterday's meeting, the commission asked Kent & Queen Anne's Hospital why its average charge per case had increased 19 percent in the past 12 months. William R. Kirk, president and chief executive officer of the hospital, said he had hired a surgeon who brought in more complicated, and expensive, cases.

Robert Murray, executive director of the commission, said the session with Kent & Queen Anne's marked an effort by the commission to review hospitals whose costs are rising to determine whether there is a good explanation.

If the commission is not satisfied, it can order a full review of the hospital's rates.

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