The 2025 Maryland General Assembly session closed on April 7th. While the budget deficit consumed a large portion of legislative bandwidth, there was significant action on health-related programs, including supporting the implementation of the Centers for Medicare & Medicaid Services (CMS) All-Payer Health Equity Approaches and Development (AHEAD) Model, expanding access to care, paving a way for Prescription Drug Affordability Board (PDAB) expansion and increasing access to affordable insurance. The AHEAD Model is an innovation in healthcare finance that drives improvements in population health through increased investments in activities likely to improve health outcomes, and benefits hospitals that participate by providing stable funding through hospital global budgets.
Budget Deficits and Federal Funding Fears Limited New Spending
After intense debate and discussion, House and Senate fiscal leaders reached a budget agreement on the final day of session. From the beginning, significant projected general fund shortfalls existed in the current and future fiscal years. Primarily these shortfalls were due to higher than anticipated Medicaid enrollment and growth in obligations to fund K-12 education under the Blueprint for Maryland鈥檚 Future. Through a combination of actions including budget cuts, increasing hospital assessments to cover Medicaid costs, shifting costs to counties, and new taxes and fees, the budget passed along party lines. Due to concerns about the potential harm from federal budget cuts, particularly in the Medicaid program, the final plan includes a trigger provision requiring the Governor to engage lawmakers on solutions should federal funding to the state fall by $1 billion.
The State Readies for the AHEAD model
Despite fiscal concerns, the General Assembly established two new funds, the Population Health Improvement Fund, and the Maryland Primary Care Program Fund, to support the implementation of the AHEAD model. Revenues to both funds are collected through an increase in hospital assessments.
- The Population Health Improvement Fund will support efforts to reach statewide population health targets under the AHEAD model.
- The Maryland Primary Care Program Fund will support the implementation of a Medicaid advanced primary care model and support primary care providers through investments in reimbursements for evaluation and management codes, care management fees to eligible practices, and quality incentives.
Supporting Access to Care
Lawmakers passed several bills aimed at increasing or protecting access to care.
- The Preserve Telehealth Access Act of 2025 makes permanent provisions of law requiring reimbursement parity between telehealth and in-person services and includes 鈥渁udio-only鈥� services as telehealth under certain circumstances.
- Legislation passed to address children and youth boarding in hospital settings beyond medical necessity. The bills define a 鈥減ediatric overstay鈥� and requires the Maryland Department of Health and the Maryland Department of Human Services to establish a pediatric overstay coordinator in each department to ensure that each patient is served in the least restrictive environment.
Several pieces of legislation passed to address behavioral health and substance use disorders including:
- Eliminating the prohibition on using 9-1-1 trust fund dollars to support the 9-8-8 suicide prevention hotline, improving coordination between 9-1-1 and 9-8-8.
- Establishing a buprenorphine training grant program to support training paramedics to administer the drug.
- Further delineating uses of opioid restitution fund dollars and creating additional reporting requirements for the Office of Overdose Response.
Since the Dobbs decision, rolling back protections for abortion care in states, Maryland has been on the forefront of protecting reproductive freedom. Legislation passed establishing the Public Health Abortion Grant Program and Fund to support eligible organizations providing equitable access to abortion care services.
Regulating Prescription Drug Prices
Maryland established the Prescription Drug Affordability Board (PDAB) in 2019 joining ten other states in regulating the cost of prescription drugs through affordability boards. The goal of PDABs is to address high prescription costs by setting upper payment limits (UPLs) for drugs that cause or are likely to cause affordability challenges. Currently, Maryland鈥檚 PDAB is authorized to set UPLs for prescription drug products purchased by or on behalf of a unit of state or local government. Legislation passed creating a pathway for the PDAB to set UPLs on prescription drug products paid for by additional state regulated payors if the board determines that the product has led or will lead to an affordability challenge.
Access to Affordable Health Insurance
The General Assembly made permanent the State-Based Young Adult Health Insurance Subsidy program and requires the Maryland Health Benefit Exchange in consultation with the Maryland Insurance Commissioner to establish and implement a state-based health insurance subsidy program for all individuals. The Maryland Health Insurance Protection Commission was reestablished to monitor federal changes that could impact coverage.
Change in Leadership at the Maryland Department of Health
During the busy legislative session, Secretary Laura Herrera Scott, MD, announced she was stepping down from her position as leader of the Maryland Department of Health. Former CMS administrator, Meena Seshamani, MD, was announced as Dr. Scott鈥檚 successor and sworn in on April 9th. Secretary Seshamani will be tasked with leading the transition from Maryland鈥檚 Total Cost of Care model to the AHEAD model and leading the department through a period of uncertainty and expected budget shortfalls.
Maryland State of Reform Conference to Cover Many of these Issues
These issues and more will be covered at the on June 12th at the Baltimore Marriott Waterfront. The day will include a panel of legislative leaders as well as sessions focused on the AHEAD Model, value-based care, behavioral health, public health, and prescription drug costs.
