The Maryland Department of Health’s three regulatory health commissions rely on an annual multimillion dollar budget to operate strategic health initiatives around the state. These include hospital rate setting under the Health Services Cost Review Commission (HSCRC), community-based grant programs through the Community Health Resources Commission (CHRC), and health care affordability strategies under the Maryland Health Care Commission (MHCC).
This week the House Health and Social Services Appropriations subcommittee reviewed updates to the commissions’ upcoming FY 2023 budget—including a nearly $70 million increase—with commission staff.
The Department of Legislative Services (DLS) presented a budget analysis to the subcommittee, noting the combined FY 2023 budget for the three commissions and the Maryland Prescription Drug Affordability Board is $262.6 million. This is an increase of $69.2 million from the FY 2022 budget.
Community Health Resources Commission
Most of the budget increase is due to two grant programs under MHCC. The Maryland Consortium on Coordinated Community Supports will “provide integrated access to community-based behavioral health services for students and families.”
This program will receive $49.7 million in FY 2023 and is administered under the Maryland State Education Association. The analysis also projected spending for this program to increase incrementally over the next few years, and would allocate over $120 million by FY 2026.
Other funding will support Healthy Equity Resource Community grants, which will distribute $13.5 million to community-based programs with a goal of reducing health disparities.
Health Services Cost Review Commission
The HSCRC, which accounts for $19.9 million in operating expenses for FY 2023, is responsible for regulating hospital rates under the unique Maryland Total Cost of Care Model (TCOC). Under this model, HSCRC determines a fixed annual budget for each hospital to cover all hospital services provided during that year, with the annual growth spending rate to not exceed 3.58% per year.
The analysis from DLS found that due to federal provider relief funds and TCOC model, Maryland hospitals were able to retain a $402 million positive budget from 2020-2022.
“[The pandemic] was a really difficult time, and Maryland’s system in particular allowed some stability for the hospital system,” said DLS Budget Analyst Andrew Garrison.
However, subcommittee Vice Chair Del. Geraldine Valentino-Smith raised concern over the Maryland Primary Care Physician (MDPCP) Program under HSCRC. The analysis included a breakdown of the racial diversity of MDPCP patients, and found that 72% were white, which is slightly above their make up of the state population (67%). Valentino-Smith questioned this disparity, as well as the lack of racial diversity data on participating providers.
“We are putting in what could be a couple million dollars a year into a program that is clearly rewarding predominantly white, healthier, more affluent patients and physicians,” she said. “Some money could be quicker and sooner redirected so that we don’t see this kind of racial disparity in the communities that need it the most.”
Maryland Health Care Commission
The budget analysis did not provide an in-depth breakdown of operations under MHCC, but noted about $18.9 million in operating expenditures in FY 2023. Those operating expenses will go towards hospitals, nursing homes, health plans, and health practitioners, according to Ben Steffen, MHCC executive director.
“The actual share of payment of revenue coming from each is based on an assessment of our workload,” he told members of the subcommittee. “Hospitals account for the largest share of funds (39%), followed by insurance carriers.”
Operations under MHCC include the Centers for Health Care Facilities Planning and Development and Quality Measurement, which focus on provider organizations’ cost and quality. MHCC will also continue to invest in expanding health information technology through the use of electronic health records like CRISP, the Maryland Health Information Exchange.
“Electronic health records have historically not been interoperable,” Steffen said. “That’s been a key component in order to make the exchange of health care information feasible.”