Healthcare Industry

Understanding the Nature of Increased Medical Costs

The state of Maryland is faced with the regulation of:

Increased hospital costs

Increased emergency room visits and utilization

Pressure from payers to reduce hospital costs

Nursing shortages

Increases in the uninsured population

In response to these issues, case mix data is used to help control hospital costs and to measure hospital efficiency. Maryland is the only state in the country to have a waiver from the Medicare PPS reimbursement method. This waiver requires the HSCRC to regulate the hospitals in order to maintain average charge corridors that are below the national averages.

HSCRC monitors the hospital indstry's efficiency, charges, and performance through changes in hospital case mix indexes and charge per case using case mix measurements. The HSCRC uses this data to set hospital rates for the following areas:

Inpatient

Outpatient

Psychiatric

Chronic Care

Maryland is an all payer state, meaning all payers receive the same reimbursement. St. Paul, in conjunction with the HSCRC and major consulting firms use case mix data to develop and produce APR CMIs (Inpatient case mix index), and APG CPVs (Outpatient case mix index/charge per visit) monitoring mechanisms used by the HSCRC to measure changes in patient charges at Maryland hospitals.