The Maryland Total Cost of Care (TCOC) model, one of the nation’s most innovative advanced alternative payment models, is about to enter year three. This demonstration and partnership with Centers for Medicare and Medicaid Services (CMS) is testing hospital global budgets, as evolved from its 2014 beginnings, and is guided by the state’s Health Services Cost Review Commission (HSCRC).
We believe the COVID-19 pandemic represents an important opportunity to assess this global budget model under stress—with implications for future health care financing. One of us (Chris L. Peterson) served as the principal deputy director of payment reform and provider alignment at the HSCRC from 2016 to 2020. The other (Dale N. Schumacher) has represented hospital medical staff in prospective payment negotiations with the HSCRC and has published analyses of Maryland hospital performance. In this post, we describe how the TCOC model has provided flexibility and stability to Maryland’s private-sector hospitals