Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Health Regulatory Budget topic
No spam. Unsubscribe anytime.
State budget hearing highlights HSCRC transition to AHEAD model, uncompensated care and drug-price work
Summary
DLS told the House Appropriations Subcommittee the Health Regulatory Commissionsbudget rises modestly for fiscal 2027; members pressed regulators about a $3.7 million overpayment to Shock Trauma, the HSCRCrole in the new AHEAD model and a proposed $10 million boost for school-based behavioral-health grants, while the Prescription Drug Affordability Board described plans for upper-payment-limit rules.
The House Appropriations CommitteeHealth and Social Services Subcommittee spent much of its budget hearing on the finances and policy work of Marylandhealth regulatory commissions.
DLS analyst Anne Braun told the panel that the combined fiscal 2027 allowance for the Maryland Health Care Commission (MHCC), the Health Services Cost Review Commission (HSCRC), the Community Health Resource Commission (MCHRC) and the Prescription Drug Affordability Board (PDAB) increases slightly, with much of the growth carried in special funds. Braun highlighted three items that shaped the presentation: the status of an apparent $3.7 million overpayment that had been distributed to the Shock Trauma Center in fiscal 2025; the role of HSCRC in implementing Marylandthe new AHEAD model with CMS; and changes to funding for the consortium on coordinated community supports that make school-based behavioral-health grants vulnerable to a proposed $20 million contingent reduction.
"The fiscal 27 allowance increases by 7 million to 366 million across these offices, almost entirely in special funds," Braun said in her presentation, reviewing tables showing a $130 million appropriation for the uncompensated-care fund and other user-fee-supported operating costs.
MHCC executive director Douglas "Doug" Jacobs told the committee MHCC, the Comptroller and the Motor Vehicle Administration coordinated to recover the $3.7 million overpayment and "this is now taken care of completely as of February 2025," and that documentation was corrected and reconciled. "We fully recovered the $3.7 million," Jacobs said.
Budget and policy stakes: AHEAD, hospital assessments and uncompensated care
DLS and the commissions discussed the transition from Marylandthe prior total cost-of-care model to the AHEAD (Achieving Health Care Efficiency through Accountable Design) model, a new federal-state agreement that keeps Marylandglobal hospital budgets in place but shifts certain fee-for-service Medicare rate-setting over time. Braun stressed that Maryland must meet aggressive fee-for-service Medicare savings and cumulative cost-growth targets through 2032, and that the multi-agency regulatory working group had proposed ways to spread required savings across payers.
John Crom, executive director of HSCRC, said the commission is working with Medicaid and CMS to ensure hospital assessments comply with new federal Medicaid provider-tax rules and to model whether assessments must be changed before the federal compliance date at the end of FY2028.
"We're working very closely with the Medicaid team to determine if any changes will be required and to ensure that the assessment is broad-based and uniform," Crom said.
School behavioral-health grants
DLS noted a projected $10 million FY27 increase to the consortium on coordinated community supports but flagged a proposed BERA language change that would roll back a $20 million ongoing mandate. MCHRC executive director Mark Luckner said the commission awards three types of grants (community supports partnerships, planning grants and direct provider grants) and scores proposals using equity and need measures such as free-and-reduced-price-meal shares.
Advocates from the Mental Health Association of Maryland, EveryMind, Strong Schools Maryland and NAMI told the committee that recent consortium funding reached more than 136,000 students and that another $20 million cut would force program closures. "A 20% cut to school mental-health funding is not trimming a line item. It is pulling away support from children in crisis," EveryMind's Alyssa Sanders said.
Prescription drug reviews and potential price limits
Andrew York of the Prescription Drug Affordability Board described an accelerated schedule for cost reviews and regulation this year: the board has completed or is finalizing cost-review work on diabetes and other drugs and expects to publish proposed regulatory actions in coming months. The board has identified a first set of drugs for cost review and is developing a methodology to set upper payment limits for state and local government purchasing.
York said the board is striving to streamline the rulemaking process so that limits can be considered on an annual cycle.
What happens next
DLS recommended several follow-up items, including narrative requests for reports on how HSCRC and MDH will implement primary care and population-health initiatives under AHEAD and on the timeline for PDAB rulemaking. Committee members asked to be kept informed as modeling and interagency negotiations proceed.
The subcommittee held the file open for follow-ups and asked the agencies to provide the requested reconciliations and implementation timelines.
