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Process Measures (QBR) | Complications (MHAC)

Quality Improvement


The considerable attention paid to hospital quality measurement nationally in recent years has identified quality-related measures in use or on the horizon that can serve as the basis for the development of financial incentives to dramatically improve the overall quality of Maryland hospital care. Pay for performance (P4P) and value-based purchasing (VBP) are interchangeable terms for a payment system that links providers' payment to their performance on selected quality of care measures, and a system that uses financial incentives to encourage providers to meet defined quality, efficiency, or other targets (Agency of Healthcare Research and Quality 2008).

The overall mission of the HSCRC Quality Initiatives is to help create a health care environment where Maryland hospitals provide high quality patient care in an efficient manner.

The overarching goals of the HSCRC Quality Initiatives are to:

  • Work with Maryland hospitals to enhance the quality of patient care by providing financial support and rewards/incentives consistent with evidence-based health services research and improved patient outcomes;
  • Utilize a broad set of quality measures that appropriately reflect the delivery of quality health care services provided at Maryland hospitals;
  • Collect data that will support the generation of accurate and reliable quality measures;
  • Better understand the relationship between quality and cost; and
  • Become a model for enhancing health care quality in the hospital setting while remaining consistent with broader quality initiatives.

HSCRC’s Quality Initiatives work includes designing, implementing and managing statewide, all-payer hospital reimbursement adjustments based upon hospital performance on a comprehensive set of quality metrics. To date, HSCRC has engaged in a three-pronged approach, including:

  • Process Measures: Quality Based Reimbursement (QBR) Initiative - Implemented in July 2008, performance is measured and reported on a set of effectiveness/process of care measures and patient experience of care measures.

  • Complications: Maryland Hospital Acquired Conditions (MHAC) Initiative - Implemented in July 2009, the MHAC program currently measures hospital performance using risk adjusted actual to expected ratios for each of the 65 Potentially Preventable Complications (PPC) used in the program. In 2012, PPCs were present in approximately 58,000 of the State's total 700,000 inpatient cases. Risk adjusted PPC rates have decreased from 1.9 to 1.3 per thousand from FY 2010 to FY 2013, with an annual average reduction of 12%.

  • Admission-Readmission Revenue (ARR) Hospital Payment Constraint Program - The Admission-Readmission Revenue (“ARR”) episode payment structure, approved to move forward in the January 2011 Commission meeting, is designed to provide incentives for hospitals to improve overall care coordination and substantially reduce readmission rates. The ARR Program also encompasses policy framework for the evaluation and approval of an ARR pilot for any hospital who agrees to adhere to a set of prescribed conditions and responsibilities. Some key features include:

  • Hospital participation in the pilot program is voluntary beginning in July 2011
  • Participating hospitals agree to a three year pilot term
  • 30-day all-cause readmission is used for determining Charge per Episode (CPE) payment rates.
The ARR initiative thus represents an important and urgently needed step in the Commission’s attempt to utilize its current regulatory authority to better rationalize Maryland’s hospital payment and delivery system.

Policy Papers and Press Releases

Please email questions or inquiries about HSCRC’s Quality Improvement Initiatives or contact Dianne Feeney by telephone at 410-764-2605.