2. Maryland Legislative Wrap-Up [Your Organization’s Name] [Presenter’s Name] [Date, 2016]

3. A Different Year 2 This Year Legislators settling in House: 1,644 bills Senate: 1,173 bills $450M budget surplus & how to spend Last Year 70+ new legislators Fewer bills introduced Budget battle; closing the deficit

4. More contentious health care issues  Freestanding Medical Facilities  Physician Alignment  Oncology Self-Referral  Cap on Non-economic Damages Opponents leveraging resources and gaining support among legislators, making hospitals’ fight harder A Different Year 3

5. Reduce, eliminate Medicaid hospital tax Restrain out-of-control liability costs Develop a comprehensive behavioral health care system MHA Legislative Priorities 2016 4

6. Began in 2009 as a “temporary” $19 million fix to backfill state’s Medicaid budget and in recent years ballooned to nearly $390 million annually The tax cumulatively added $2.1 billion to hospital bills over seven years by inflating hospital bills for all patients by 2.5 percent Artificial increase makes meeting new waiver spending and quality targets more difficult Medicaid Hospital Tax 5

7. About Us: The Maryland Hospital Association advocates on behalf of Maryland’s 64 hospitals and health systems; membership is composed of community, teaching, specialty, long-term care, and veterans hospitals DO THE MA H Maryland’s Hidden Tax on Hospital Services What Maryland Needs Impact on Patients Impact on Maryland’s Economy The tax has added $2.1 billion to Marylanders’ hospital bills since 2010. FY 2010 Medicaid Tax = $19 million FY 2017 Medicaid Tax = $365 million P ROTECT the $25 million annual reduction Maryland’s Medicaid Assessment – a 3 percent tax on people’s hospital bills – was a “temporary” solution in 2010 to close the funding gap; none of the tax is kept by hospitals…it all goes to the state 1,800 percent increase Maryland’s unique hospital payment system – the waiver – brings $1.8 billion of federal funds to the state annually; the Medicaid tax threatens these funds by artificially inflating what is spent on hospital care in Maryland, making Maryland appear more costly Thanks to legislators and the Governor for placing the Medicaid tax on a $25 million per year plan to reduce and eventually eliminate the tax

8. Reduce Medicaid hospital tax  Secured $25M annual spend-down of the tax beginning in FY 2017  Governor and legislature support  Protect each and every year (defeat efforts to tax and spend elsewhere) MHA Scorecard 7

9. Health care in Maryland can be more innovative and affordable if the state improves the medical liability environment Maryland ranks seventh in the nation in per capita medical malpractice payouts In Maryland, 13% of hospital costs due to defensive medicine total about $2.1 billion Restrain Health Care Liability Costs 8

10. The Cost of Defensive Medicine About Us: The Maryland Hospital Association advocates on behalf of Maryland’s 64 hospitals and health systems; membership is composed of community, teaching, specialty, long-term care, and veterans hospitals. Percent of physicians who say they would perform a procedure that may not be medically warranted due to malpractice fears Defensive medicine is the overuse of tests, consultations, or admissions as a means of self-protection against malpractice Maryland’s Defensive Medicine Costs Source: Medscape Ethics Report 2014, Part 2: Money, Romance, and Patients, 2014 Nationally, 13 percent of spending on hospital services is at least partially defensive Source: Rothberg MB, Class J, Bishop TF, Friderici J, Kleppel R, Lindenauer PK. The Cost of Defensive Medicine on 3 Hospital Medicine Services. JAMA Intern Med. 2014;174(11):1867-1868 $2.1 billion in potentially unnecessary spending W HAT THIS MEANS FOR M ARYLAND

11. P ASS legislation to improve Maryland’s costly liability environment, including a no-fault birth injury compensation fund R EJECT trial lawyers’ attempts to raise the state’s cap on non-economic damages Maryland’s Liability Costs TOP the List Maryland Needs Tort Reform Caps on noneconomic damages are strongly tied to reduced malpractice claims and insurance premiums Nationally, 90 percent of cases that go to trial are adjudicated in favor of physicians What Maryland Needs Surgeons & Ob-Gyns typically pay between $115,000 and $158,000 per year for malpractice insurance in the greater D.C. and Baltimore areas Source: The Medical Liability Monitor, Annual Survey, Annual Rate Survey Issue, October 2013, Vol. 38, No. 10 Source: CBO Background Paper. Medical Malpractice Tort Limits and Health Care Spending, 2006 Source: Diederich Healthcare, Medical Malpractice Payout Analysis, 2015 based on data recorded by the National Practitioner Data Bank Source: Guardado, José R. “Professional Liability Insurance Indemnity and Expense Payments, Claim Disposition, and Policy Limits, 2001- 2010” Policy Research Perspectives No. 2011-3  Ranked 7 th in the nation in per capita medical malpractice payouts in 2014  One of ten states with more than $100M in medical malpractice payouts in 2014  From 2012 to 2014, malpractice payouts spiked $60 million, topping out at $135 million in 2014

12. Restrain out-of-control liability costs  Blocked trial lawyers’ bill to triple the cap on non-economic damages  Advanced support for no-fault birth injury fund −Bill would quickly compensate the 6 to 7 cases of birth injury annually outside the legal system −Mitigate litigious environment with families −Nearly doubled House sponsors, secured majority on House committee MHA Scorecard 11

13. From 2010 to 2014, substance abuse visits to EDs spiked by 42 percent, mental health visits climbed 24 percent Nine counties in Maryland do not have a full time psychiatrist in safety net facilities More than 10 percent of adolescents in Maryland had a major depressive episode in the past year; of those, nearly 62 percent received no treatment for depression Develop a Comprehensive Behavioral Health System 12

14. Maryland’s Behavioral Health Crisis Hospital Capacity Strained Three state psychiatric facilities have closed over last decade Two of remaining five state facilities treat only forensic and involuntary cases Less than two-thirds of general hospitals have inpatient psychiatric units Three psychiatric hospitals deliver care for complex patients 18 percent opioid-related ED visits 41 percent heroin-related ED visits 21 percent drug and alcohol-related intoxication deaths 22 percent opioid-related deaths Developed Emergency Department Opioid Prescribing Guidelines to reduce the risk of addiction and misuse Created a Behavioral Health Task Force of hospital leaders charged with developing recommendations to improve Maryland’s behavioral health system Supported regional investments to link physical and behavioral health care across the entire continuum of care and within the community What is MHA Doing? Substance Abuse Related ED Visits Grew 46 Percent Between 2010-2014 & Mental Health Related Visits Grew 29 Percent Situation is Reaching Crisis Levels: Change Between 2013-2014 Situation is Reaching Crisis Levels: Change Between 2013-2014 A State Look… Maryland’s hospitals and other behavioral health providers cannot fix this crisis alone. Thank you for your leadership on this important issue!

15. Improve care for those with mental health and substance use disorders  Secured $3M for Maryland’s Institutions for Mental Diseases (IMDs)  Secured budget language to allow DHMH to shift funds to cover IMD costs  Strengthened Maryland’s Prescription Drug Monitoring Program to curb opioid epidemic MHA Scorecard 14

16. Preparing for the future  Right sizing inpatient capacity to allow hospitals to adjust and be paid HSCRC rates without a CON (Freestanding Medical Facilities) - passed  Creating financial alignment with physicians to share savings - to be continued…  Secured $4.3 million, through the Capital Bond Program for hospital capital projects across the state to enhance care delivery Other Key Issues 15

17. Care Act: In partnership with AARP, supported legislation that aligns the discharge process with CMS’ Conditions of Participation Telemedicine: Supported a bill encouraging parity of reimbursed services delivered to Medicaid recipients by primary care providers Network Adequacy: Supported legislation requiring carriers to maintain accurate provider directories and network adequacy Other Key Issues 16

18. Defeated measure requiring hospitals to show value of their not-for-profit tax exemptions alongside value of their community benefits contributions Halted efforts to dilute valuable patient protections by exempting a single for-profit oncology practice – US Oncology – from the state’s physician self-referral law Stopped a bill requiring hospitals to sign patients up for temporary Medicaid coverage, diverting resources from efforts to secure permanent coverage for these patients Bills Defeated 17

19. Blocked an onerous bill that would have duplicated standards to which hospitals are already held through the establishment of a patient bill of rights Defeated measures that would have removed authority for determining hospital closures from hospital boards of trustees and given to local boards of health Bills Defeated 18

20. Continue to push for spend-down of Medicaid hospital tax Protect IMD funding and work with other stakeholders to create a focused behavioral health agenda with coalition support Participate in Rural Health Task Force looking at trends, gaps and needs led by the Maryland Health Care Commission What’s Next? 19

21. Evaluate and gain support for legislation to allow hospitals and other health care providers to collaborate, innovate, and share savings under the quality and financial goals of the all-payer model  On to summer study… −Financial alignment with physicians −Oncology self-referral What’s Next? 20

22. Maryland Legislative Wrap Up [Your Organization’s Name] [Presenter’s Name] [Date, 2016]