1544

LAWS OF MARYLAND

Ch. 112

citizens to affordable quality health care; and

WHEREAS, The rising cost of health care impacts most
severely on those segments of the population, such as the
elderly, the handicapped and the economically disadvantaged, who
are the least able to afford, and often in the greatest need of
medical care; and

WHEREAS, The Maryland hospital payment system has enabled
our State to establish one of the most effective programs in the
country for ensuring that the approximately 300,000 Marylanders
who lack health care coverage have access to needed hospital
care; and

WHEREAS, The State must enhance its current cost containment
efforts in order to preserve the Medicare Waiver which is the
foundation of Maryland's hospital payment system; and

WHEREAS, In 1983 the rate of increase in net total hospital
revenues exceeded the national rate of increase for such
revenues; and

WHEREAS, Net patient service revenues have risen steadily as
a percent of total personal income in Maryland; and

WHEREAS, The increases in net total hospital revenues are
the result of many individual decisions and demonstrate that a
State affordability limit is needed to monitor and limit overall
aggregate net patient revenues generated by Maryland's hospitals;
and

WHEREAS, In the absence of a publicly determined State

affordability limit, individual payors responding to the

pressures of health care cost escalation may attempt to constrain
costs in a manner which may be detrimental to our hospital
payment system and individual hospitals, particularly those who
provide a high level of care for the indigent; and

WHEREAS, Actions taken to enhance the effectiveness of the
current hospital payment system and to retain the Medicare Waiver
ought to consider certain factors regarding hospitals, including
location in urban, suburban, or rural areas, migration patterns,
payor mix, bad debt, socio-economic status of the patient
population, severity of illnesses treated at a hospital, and in
certain circumstances the historical role of a hospital to the
community it serves;

WHEREAS, A State affordability limit is consistent with and
will enhance the effectiveness of the incentives and operation of
the current hospital payment system and thereby improve our
ability to retain the Medicare Waiver; now, therefore,

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows: