The Maryland Model
Maryland has a unique health care payment model, vastly different from other states. Historically, Maryland has operated under the "Maryland Model," an innovative all-payer total cost of care system.
Under this model, all payers - whether Medicare, Medicaid, or commercial insurers - are charged the same rate for the same hospital service at a given facility. This means that regardless of your insurance type, the cost of a hospital service remains consistent across payers.
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The Maryland Model is one of the first models to use the power of state authority for putting pressure on hospitals to control the cost of services while improving the quality of care. The Maryland Model led to: ​​​
6.6%
19-31%
16.9%
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Reduction in Medicare spending by Maryland hospitals from 2019-2021
Decrease in social vulnerability disparities across unplanned readmissions, preventable admissions, and timely follow-up
Reduction in hospital admissions from 2019-2021
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The Maryland Model started decades ago when the Health Services Cost Review Commission (HSCRC) was created to serve as an independent state agency overseeing rates charged to private health insurers. More recently, the model saw significant change with the introduction of the Maryland All-Payer Model, active from January 2013 through December 2018. This model, created in collaboration with the federal government's Centers for Medicare & Medicaid Services (CMS), created all-payer global budgets for Maryland hospitals, meaning that each hospital is given a fixed annual budget to cover the cost of care for all patients, regardless of how many individuals are served. It also introduced incentives for hospitals to make infrastructure improvements to hospitals.
In 2019, the model transitioned to the Maryland Total Cost of Care (TCOC) Model. The TCOC Model aims to improve overall health care quality and reduce costs by holding the state accountable for both the total cost of care and sets overall savings targets. The TCOC Model has seen much success, including reduced hospital admissions and large decreases in hospital spending. ​​
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While the Maryland Model has seen historical success and represents a point of pride for Marylanders, it continues to warrant close public attention. At its core, the Maryland Model provides the HSCRC with broad authority to impact the cost and quality of health care services for all Marylanders. Therefore, the decisions made by the HSCRC need to continue to be pointed in the right direction, otherwise the impact will be felt by everyone in the state through increased out of pocket expenses, higher insurance premiums, and lower access and quality of care.
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Recently, the HSCRC’s decisions have started to trend in this problematic direction. While hospital spending has decreased, hospital budgets have increased.
The table above shows that since 2023, Maryland’s HSCRC has raised hospital budgets by almost 14 percent. As a result, Maryland has started to see cost increases at a rate disproportionate to similar costs in Medicare. The 14 percent hospital budget increase in Maryland is roughly 5 percent higher than Medicare’s hospital payment increases. When the HSCRC approves hospital budget increases, these higher costs are ultimately passed on to Maryland families and businesses.
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Moreover, these increased costs may become more prominent as the environment continues to change in Maryland. In January 2026, Maryland will shift away from the TCOC Model to the AHEAD Model. The AHEAD Model places more emphasis on Medicare, removing the all-payer system and returning rate setting authority to the federal government for Medicare. Many worry this will exacerbate already increasing costs for people with other types of coverage, like Medicaid or private insurance, leaving Maryland consumers even more heavily impacted.
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As Maryland transitions toward the AHEAD Model, the Health Means Everything Consumer Alliance aims to keep Maryland families informed and empowered about decisions made by the HSCRC. This will let us advocate for reforms that protect the Maryland Model, that maximize savings, and that promote optimal health.
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Maryland families deserve low health care costs and equitable access to care.