Maryland officially signed the updated AHEAD State Agreement with CMS. This allows Maryland’s to evolve long-standing value-based health care model(s), a model that has delivered lower cost growth, better quality, and improved health outcomes for more than a decade.
What’s in the final agreement?
The new AHEAD model sets statewide goals for slowing the growth of healthcare spending, increasing investment in primary care, and improving population health. The agreement reflects months of detailed negotiations with CMS and strong engagement from hospitals, payers, providers, and other partners across the state.
At a high level, the final agreement includes:
- Stability in the early years: Only small changes for the next two years, in 2026 and 2027, before CMS’s new global budget methodology begins in 2028.
- Protection of Maryland’s global budget system: CMS and the State reaffirmed their commitment to global budgets and the all-payer model, including a smoother, phased transition to the new CMS design.
- Flexibility for hospitals and providers:
- A bridge period to prevent sudden changes in Medicare hospital revenues.
- A new guardrail that returns any excess Medicare savings back into hospital global budgets.
- Continued ability to invest in population health initiatives.
- Preservation of physician value-based programs until new versions are developed.
- Greater flexibility on Choice and Competition requirements and extended timelines for implementation.
- Alignment with Medicaid: A pathway for Medicaid rates to track with Medicare global budget rates as federal rulemaking continues.
- Lower threshold for services under global budgets (from 90% to 85%), while still allowing enhanced Maryland-specific rates for certain carved-out services.
What comes next?
Hospitals are now reviewing participation agreements. Additionally, a few cross-cutting policy areas still require collaboration across agencies, including post-acute care, graduate medical education, cost-shifting, Medicare Advantage, and primary care investment requirements. A state regulatory working group, established by Governor Moore, has already begun coordinated work on these items, with a final set of recommendations due in June 2026.
This agreement represents the strongest deal Maryland could secure with CMS, preserving our core model, creating needed stability for hospitals and providers, and positioning the state to continue leading the nation in innovative, accountable, and people-centered health care.