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Md. submits plan to update all-payer health system

Friday - 10/11/2013, 7:14pm  ET

ANNAPOLIS, Md. -- Maryland has submitted a plan to the federal government to modernize the state's all-payer rate setting system for hospital services.

Gov. Martin O'Malley announced the submission on Friday to the federal Centers for Medicare and Medicaid Services.

The state is proposing a shift away from fee-for-service reimbursement toward a health care delivery that emphasizes prevention, quality care and value.

Maryland is the only state that has a waiver with the federal government that allows Medicare payments to be based on rates set by a state commission, instead of national federal payment principles. But Maryland must meet tests showing that cumulative growth in state payments doesn't exceed the rate of growth in Medicare payments nationally. The state has come close to failing to meet the standard in recent years.

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