ANNAPOLIS, Md. — On Friday, Maryland made history by becoming the inaugural state to join a federal initiative aimed at enhancing health care quality and equity while also working to reduce expenses across all health care payers, which include Medicare, Medicaid, and private insurance companies.

This program builds upon Maryland’s Total Cost of Care Model, a system that establishes a per capita limit on the overall cost of Medicare services within the state. It incorporates Maryland’s distinctive all-payer hospital payment model, which aims to lower per capita hospital costs and foster improved health results, in alignment with mandates from the Affordable Care Act.

The newly introduced federal framework, known as the AHEAD model, emphasizes providing high-quality health care through better coordination and focuses on health equity and addressing social determinants of health to help underserved populations.

“We are honored to embark on this new chapter of health care with the AHEAD model right here in Maryland,” stated Governor Wes Moore, a Democrat, who formalized the agreement alongside Chiquita Brooks-LaSure, the Administrator for the U.S. Centers for Medicare and Medicaid Services.

Since the 1970s, Maryland has operated an all-payer hospital system, which permits the state to establish its own pricing for hospital services. Under this model, all payers are required to pay the same rate for services rendered at any particular hospital.

This system is designed to ensure fair access to health care, eliminate the necessity for charity hospitals, and guarantee that patients receive equal treatment independent of their insurance coverage. State legislation supports this system, which relies on rates determined by hospitals and has been central to the evolution of Maryland’s health care framework over the decades.

Maryland Senator Chris Van Hollen, also a Democrat, remarked after a press event in Annapolis, “We’ve cultivated a unique system over many decades, and by signing the AHEAD agreement, we elevate that system to new heights. Our primary goals are equity, quality, and affordability.”

Planning for the implementation of the AHEAD model, set to begin on January 1, 2025, will fall to the Maryland Department of Health. This process will involve setting benchmarks for cost growth and improvements in quality and equity, advancing population health, investing in primary care resources, and establishing regional partnerships to support AHEAD objectives.

Senator Ben Cardin emphasized that the agreement preserves the existing policy that ensures health care providers receive identical compensation for services, encouraging hospitals to offer equitable care, regardless of the insurance status of the patient.

“Furthermore, we are now dedicated to ensuring high-quality care. Our focus includes investing in primary care and early detection methods, aimed at maintaining better health so patients can minimize their health care needs,” added Cardin.

The Centers for Medicare and Medicaid Services has also selected five additional states—Vermont, Connecticut, Hawaii, Rhode Island, and certain regions of New York—for involvement in the AHEAD Model.

Brooks-LaSure remarked, “Maryland’s engagement in the AHEAD Model marks a significant advancement in enhancing the health of its residents, bolstering primary care, revitalizing health care across communities in the state, and tackling the disparities prevalent in the health care system.”