Maryland: All-Payer Model - World Health Systems Facts

“In 2014, Maryland implemented global budgets for all acute care hospitals.^1,2 Developed as a model test by the Centers for Medicare & Medicaid Services (CMS), Center for Medicare and Medicaid Innovation, and Maryland’s Health Services Cost Review Commission (HSCRC), the Maryland All-Payer Model (MDAPM) specified annual targets for growth in Medicare and all-payer hospital expenditures.³ The global budget, consisting of hospital inpatient and outpatient revenue, was the method to achieve those targets.⁴ The state had previously used a rate-setting system that regulated hospital prices for all payers, operating under an exemption from the Medicare Inpatient and Outpatient Prospective Payment Systems.⁵ The agreement to establish the MDAPM allowed the state to continue this exemption and build on 4 years of experience in setting global budgets for 10 rural hospitals.⁶

“As an alternative to fee-for-service payment, hospital global budgets represent an opportunity to constrain growth in cost while strengthening quality incentives.^1,4 In this system, revenue no longer depends on the volume of admissions, emergency department visits, and outpatient services. Hospitals may be motivated to reduce avoidable use, whether by preventing readmissions, reducing iatrogenic complications, or, further upstream, addressing population health.^5–11 This approach can incorporate safeguards to ensure that patients receive appropriate care while avoiding excessive financial risk to hospitals.⁴

“Global budgets also offer a strategy to stabilize hospital finances.¹² This system may particularly benefit vulnerable rural hospitals, allowing them to address community health needs rather than compete for volume.^13–15 The Pennsylvania Rural Health Model, also developed by the Center for Medicare and Medicaid Innovation, currently tests this approach.^16,17 The Community Health Access and Rural Transformation Model will further extend the reach of hospital global budgets into rural communities across the US in 2023.¹⁸ The COVID-19 pandemic highlighted the susceptibility of hospitals to losses in volume—and the need to prevent closures.^14,19–21“

Kilaru AS, Crider CR, Chiang J, Fassas E, Sapra KJ. Health Care Leaders’ Perspectives on the Maryland All-Payer Model. JAMA Health Forum. 2022;3(2):e214920. doi:10.1001/jamahealthforum.2021.4920

“Over the first four years of the MD TCOC [Maryland Total Cost of Care] period (2019 to 2022), the model decreased total Medicare Part A and B spending by an average of $292 per beneficiary per year or 2.1% (90% confidence interval: [$451, $133]) (Exhibit ES.3). These effects were about 1.0 percentage point larger during the MD TCOC period than they were at the end of the MDAPM period (2017 to 2018).

“The model reduced total spending by reducing hospital spending (6.1%) by more than it increased non-hospital spending (3.1%). After accounting for non-claims payments for MDPCP and other delivery reforms in Maryland and the comparison group, the model generated an estimated $689 million in net savings to Medicare over its first three years (2019 to 2021).³ The model reduced total spending largely because, for many years (from 2014 to 2019), HSCRC set the growth of total hospital spending in the state below the growth of hospital spending nationally. HSCRC did this mainly to meet savings requirements built into the agreements with CMS establishing the model. The hospital global budgets have encouraged hospitals to shift some care to non-hospital settings, such as sending some surgeries to ambulatory surgical centers, which have increased spending in nonhospital settings. The savings on hospital spending, however, have exceeded the increases in nonhospital spending, generating the overall Medicare savings.”

Source: Greg Peterson, Jason Rotter, Rachel Machta, Keri Calkins, Katie Morrison Lee, Amanda Markovitz, Rumin Sarwar, Kate Stewart, Jake Vogler, Isabel Platt, Danielle Whicher, Nancy McCall. Evaluation of the Maryland Total Cost of Care Model: Progress Report. Mathematica. April, 2024.

“A common criticism of the MDAPM [Maryland All-Payer Model] is that it is not generalizable beyond Maryland owing to the historical all-payer rate-setting system.^7,23 The findings of this study suggest that this rate-setting system was important in that it provided technical infrastructure to implement the model and a shared commitment to payer-agnostic hospital reimbursement. However, the study participants noted that one reason for successful MDAPM implementation was that it was designed for the unique circumstances in the state in collaboration with stakeholders from its inception. A replica of the MDAPM might not be relevant for other states, but shared participation in payment model design is a lesson that can be applied broadly.

“Previous studies of the MDAPM have debated its impact on cost and hospital utilization.⁷ The independent, federally funded evaluation of the model demonstrated savings in total cost and decreased admissions for Medicare as well as savings in total hospital expenditures for the commercially insured population.³ However, hospital global budgets may offer benefits beyond cost containment. They may be used to maintain access to emergency and acute care by preventing hospital closures in rural areas as well as for urban safety-net facilities.^12,13 Also, some evidence demonstrates increased resiliency to loss of volume during the COVID-19 pandemic.¹⁹ In this study, participants noted that global budgets were not designed to severely constrain hospital spending but rather to incrementally realign hospital incentives, with additional quality measures that were perceived as useful to ensuring focus on improving patient outcomes.

“Maryland has itself progressed to the Total Cost of Care Model, which seeks to improve on limitations of the MDAPM.²⁵ These strategies include increased investment in primary care, strengthened alignment between physicians and hospitals, and an explicit focus on improved population health. The present study found that hospital global budgets, though a paradigm shift, were an intermediary step toward accountability for total cost. Strengthening incentives for hospitals to focus on community needs for both acute and preventive care is a key goal for Maryland, and the savings from reduced hospital growth are expected to allow for greater investment in primary care and population health. However, engaging health care professionals beyond the hospital remains a challenge that is necessary to achieve true system-wide transformation.⁴“

Kilaru AS, Crider CR, Chiang J, Fassas E, Sapra KJ. Health Care Leaders’ Perspectives on the Maryland All-Payer Model. JAMA Health Forum. 2022;3(2):e214920. doi:10.1001/jamahealthforum.2021.4920

“Maryland has a rather unique hospital reimbursement history, starting with all-payer rate setting in the 1970s, then the All-Payer Model with a global budget program initiated in 2014, which was updated in 2019 to the Total Cost of Care Model.² The state has developed an advanced financial data infrastructure and its own revenue definitions categorized into “rate centers” that map to Uniform Billing 04 revenue codes.³ Despite regulations, hospitals charge different rates per unit even within the same rate center. The authors have standardized the rate per unit charged across the state; however, it remains unclear if different hospital charge masters are mapped to the same rate centers/UB-04 revenue codes, with only vague definitions in their accounting and budget manual (section 200).⁴ The lack of standardization of mapping charges to UB-04 revenue codes has plagued cost analyses for years, limiting the granularity of comparisons to total charges for a hospitalization.5, 6, 7 Depending on the consistency of the charge categorization, the standardization may or may not be useful, and there is no way to determine this. Another notable limitation is the 25% of patients excluded for missing charge data. Finally, the authors chose to focus on modifiable risk factors, but this leaves unmodifiable cost drivers unadjusted for. All this points to the fact that quantifying true costs is impossible, even in a state such as Maryland with extensive financial regulation and data capture.”

Source: Hawkins RB, Mehaffey JH. Commentary: Complexity and complications drive cost. J Thorac Cardiovasc Surg. 2023;165(2):773-774. doi:10.1016/j.jtcvs.2021.03.090

“Maryland’s Evolving Approach to Hospital Payment

“Maryland has been a national leader in hospital payment reform.
“From January 1, 2014, through December 31, 2018, the Maryland All-Payer Medicare Model focused on improving quality, enhancing health outcomes, and controlling Medicare spending for hospital inpatient and outpatient services. During this period, hospitals successfully reduced unnecessary readmissions and hospital-acquired conditions while slowing growth in hospital costs per capita. However, the All-Payer Model primarily targeted hospitals and did not fully support coordinated care across the broader health care system. To address this gap, Maryland worked with the federal government to develop a new approach that extended beyond hospitals to include all care patients received—both in the hospital and in the community.

“Total Cost of Care Model Overview

“On July 9, 2018, Maryland and the federal government signed the TCOC Model State Agreement, which became effective January 1, 2019, and ran through December 2025. Under the TCOC Model, Maryland was expected to transform care delivery across the health system, improve health and quality of care, and maintain Medicare spending growth below the national rate. The TCOC Model gave Maryland the flexibility to tailor initiatives to the state’s unique health care environment and encouraged innovation among providers. It supported investments in population health improvement, care redesign and provided new tools and resources for primary care providers to better manage complex and chronic conditions, helping Marylanders achieve better health.”

Source: Health Services Cost Review Commission, Maryland’s Total Cost of Care Model, State of Maryland, Accessed July 4, 2026.

Maryland: Demographic and Economic Data

Population estimate, July 1, 2025 (Census Bureau Data Vintage 2025): 6,265,347
Persons under 5 years, 2025 (%) (V2025): 5.5%
Persons 65 years and over, 2025 (%) (V2025): 18.4%
Persons without health uninsurance under age 65 years, 2024 (%) (2024 American Community Survey): 7.4%
Per capita income in past 12 months (in 2024 dollars), 2020-2024: $52,979

Source: US Census Bureau, “QuickFacts: Maryland,” Accessed July 4, 2026.

Maryland: All-Payer Model

• Total Cost of Care

• The AHEAD (Achieving Healthcare Efficiency through Accountable Design) Model

Oregon: Universal Health Plan

Washington: WA Cares Fund

World Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems and policies in the US and sixteen other OECD member nations.

Page last updated July 4, 2026 by Doug McVay, Editor.