There's a little more than a month left in the 2015 General Assembly session and debate over the budget proposed by newly-elected Gov. Larry Hogan is coming to the fore. This week, Maryland's Senate and House of Delegates held separate hearings on the 2015 Budget Reconciliation and Financing Act, the legislation that codifies the state's spending plan.

I testified at both hearings, talking about our two key budget issues: gaining some flexibility in coping with the proposed cuts to Medicaid, and reducing the Medicaid hospital tax. After a lot of advocacy and meeting upon meeting with legislators, members of the administration, and their staffs, it appears we have reason to be cautiously optimistic. But, it's going to take continued effort; after all, final decisions are not made until the very end of the legislative session.

Among the reasons that this is a particularly challenging budget season are the dramatic deficit that Gov. Hogan is paring down and legislators' continued, tacit reliance on the Medicaid tax to supplement the state's general fund.

The case for flexibility in achieving Medicaid spending reductions is plain and powerful: Because of Medicaid's matching formula and the all-payer hospital rate-setting system, achieving $24.7 million in Medicaid savings ($8 million in 2015 and $16.7 million in 2016) through the proposed reductions actually will require a total hospital rate cut of $410 million. That could mean more than 8,000 Maryland jobs lost due to a single, myopic budget requirement.

We know that all areas of the budget face cuts, but we're strongly advocating that officials give HSCRC the flexibility to implement less-damaging options. While this may not seem like too much to ask, hospital payment in Maryland is very complex, and many legislators are very new - thus it is a challenge to help them understand why in our state, a $25 million hospital cut is really a $410 million cut. The good news is that Budget Secretary David Brinkley this week submitted an amendment that addresses this problem. 

On the Medicaid tax, the state is already clawing back $14.5 million in waiver-related Medicaid savings achieved over the first six months of 2014 - savings that the legislature had intended to reduce the $390 million tax this year and, in turn, reduce hospital bills for all patients. The Department of Legislative Services, which is essentially the legislature's budget staff, this week submitted its recommendations to put the Medicaid tax on a spend-down plan, as we have asked. A fixed annual set-aside of $20 million would be adopted if this plan goes through, and you can bet we will not only advocate for it, but we also will tactfully urge that the set-aside be bigger.

I believe that these positive steps came about at least in part because we have been loud and clear in Annapolis that Maryland's hospitals, working under the revised waiver agreement with Medicare, are already an important part of the state's budget solution. You're holding cost increases to 1.50 percent per capita, far lower than the 2.4 percent overall rate of spending growth targeted in the fiscal year 2016 budget. And we shared a national report this week showing that hospitals are massive drivers of Maryland's economy, with a $29 billion impact that also supports nearly 210,000 jobs - an economic engine that deep cuts could jeopardize.

In the final month of the General Assembly session, we'll be pressing the message hard that Maryland's hospitals are integral to Maryland's economic climate and that these budget improvements can prevent a devastating, long-term impact on Maryland's hospitals and the people they serve. 

Several important bills were considered that required MHA's expertise and consideration. On Tuesday and Wednesday MHA testified on SB 57-HB 72 Budget Reconciliation and Financing Act of 2015 in the House Appropriations and Senate Budget and Taxation Committees. The Budget Reconciliation and Financing Act of 2015 (BRFA) seeks to delay until fiscal year 2017 any reduction to Maryland's hospital Medicaid tax through savings that accrue to Medicaid as a result of reduced hospital spending under the state's waiver agreement with Medicare. Maryland's hospitals understand and support the need to balance the state's structural budget deficit. However, the options being proposed to achieve the cuts to Medicaid are a terribly inefficient way to realize budget savings. In order to continue to keep health care costs low and preserve Maryland's unique, equitable and cost-saving hospital payment system, the HSCRC should be given the flexibility to achieve the hospital Medicaid spending reductions in other ways. MHA continues to request that BRFA be amended to allow the state, beginning in fiscal year 2017, to count all state health care program savings - not just Medicaid - toward reducing the Medicaid tax that now stands at $389,825,000. It is critically important to the success of Maryland's hospital waiver - which brings an additional $2 billion in federal funds into the state each year - for the General Assembly to reduce and eliminate this burdensome tax. 

On Thursday, MHA and several panelists testified in support of SB585-HB553 Maryland No-Fault Birth Injury Fund, which would establish a system for adjudication of claims involving birth-related neurological injuries. A No-Fault Birth Injury Fund would remove the adversarial nature from about half a dozen cases annually, according to actuarial estimates, and help injured families get the care they need quickly through an administrative process. In addition, for the handful of cases each year that would qualify for reimbursement from this fund, a no-fault mechanism provides timely, efficient compensation without asking injured parties to play in the "litigation lottery," where results are uncertain and won't be determined for years.

On Thursday, MHA submitted written testimony in support of SB187-Governor's Workforce Investment Board-Workgroup to Study Access to Obstetric Services. This would require the Governor's Workforce Investment Board to coordinate with the Secretary of Health and Mental Hygiene, health occupations boards, and specified other parties, to establish a work group to study access to obstetric services in the state; and requires that a specified work group report to specified committees of the General Assembly on or before December 1 of each year. MHA agrees that a task force designed to ensure adequate access to obstetric services, particularly in rural areas, is needed to preserve the important health gains realized over the past decade.

Beginning with the "Value Based Emergency Medicine Summit" which focuses on the role the emergency department can play in reducing unnecessary costs and limiting unnecessary admission, MHEI is offering programs throughout 2015 that speak to both population health and changes necessary to move toward its implementation. A program designed for a different audience, "Population Health for Managers" will introduce managers to population health concepts and their special role, as managers, in moving their organizations forward while "Patient Engagement: Courageous Conversations is the Key" will help staff develop their skills in communicating, especially about upcoming changes in health care including helping patients take responsibility for their own care. MHEI's Annual Leadership conference October 18 & 19 will once again focus on the tools of population health while "Developing Strategies in an Era of Health Care Change" will round out the fall schedule.