Patrick Redmon, executive director of the state commission, said part of the problem is the state has been focused on health care expenses on a per-case basis.
"The recognition that we've seen under the Affordable Care Act is that that's not really the way to measure efficiency in health care," Redmon said. "We need to look at episodes of care — even better, look at providing care to a population in an efficient manner, not just in limited episodes."
As an example of Maryland's difficulties in reaching the waiver requirement, Redmon cited efforts to reduce the number of patients who spend a day in a hospital. As a result, those simpler and less-expensive cases have moved out of hospitals, leaving more- expensive cases to be counted in the waiver evaluation process.
"It's a logical, very sound policy, but it makes us deteriorate on the waiver test as we currently have it," Redmon said.
The waiver enables the state to create an all-payer system for Medicare, Medicaid, private insurers and the uninsured. Hospitals are paid based on the rates set by the HSCRC, regardless of the payer. It also makes it possible for the state to operate its uncompensated care program.
The annual financial impact of losing the Medicare waiver to the state's hospitals is about $1 billion in lost Medicare reimbursements, according to a 2011 analysis by the Maryland Department of Legislative Services.