The Admission-Readmission Revenue (ARR) program

Organization Name:  Maryland Health Services Cost Review Commission (HSCRC)

Innovation Type:  Admission-Readmission Revenue (ARR) Program  

What They’re Doing: Global budgets for inpatient admissions and readmissions.

The Admission-Readmission Revenue (ARR) program entails three-year voluntary, alternative bundled payment arrangements for certain hospitals whose rates are established by the Maryland Health Services Cost Review Commission (HSCRC) under Maryland’s all payer Medicare waiver. For the next three years, the Commission will set rates for participating hospitals on a charge per episode (CPE) basis which takes into account admission and readmission charges from the previous year. Thirty-day all-cause readmissions are used for determining the CPE target. If a hospital has reduced costs for readmissions compared to the targeted amount, it will accrue savings to its balance sheet. If the hospitals readmission costs exceed the targeted amount, the rate target will be negatively adjusted in the next year. Literature indicates that all cause readmissions could be reduced by 25%-50%, which would reduce hospital costs by $200 - 300 million per year.  

Evaluation Type: Quasi-Experimental  

Evaluation Plan: HSCRC requires participating hospitals to submit information on 30-day all- cause intra-hospital readmissions and specific quality measures. The HSCRC will compare number of readmissions, costs and quality at hospitals participating in the program before and after implementation of the program and with similar hospitals that are not participating in the program.  

Outcomes: Preliminary results expected in Fall 2012.  

Publications: None  

Target Population: Hospitals in Maryland that agree to participate for the duration of the three year pilot program.  

Date of Implementation: Payments will be retroactive to July 2011  

Contact: Steve Ports, sports@hscrc.state.md.us