Potentially Avoidable Utilization (PAU) Savings Policy
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Overview
The Maryland Health Services Cost Review Commission (HSCRC or the Commission) operates a potentially avoidable utilization (PAU) savings policy as part of its portfolio of quality programs. PAU is defined as hospital care that is unplanned and could be prevented through improved care, care coordination, or effective community based care. With the introduction of the Total Cost of Care Model and global budgets, reducing PAU became a central focus in order to ensure that care is being delivered in the most appropriate setting. To this end, the Commission sets a prospective statewide PAU savings adjustment that limits inflation on revenue related to PAU visits based on the previous year’s PAU performance. In contrast to the HSCRC’s other quality programs that reward or penalize hospitals based on performance, the PAU Savings policy assumes that hospitals will be able to reduce their potentially avoidable utilization as care transforms in the state under the Total Cost of Care Model. Therefore, the policy is currently penalty only.
Background
The PAU Savings Policy builds on the former Readmission
Shared Savings Policy (RSSP) implemented in conjunction with
the Admission-Readmission
Revenue (ARR) program. In Rate Year 2017 (beginning in July 2016), the savings program transitioned to focus more broadly on potentially avoidable utilization and the policy was renamed PAU Savings. The PAU Savings policy is also important for maintaining Maryland’s exemption from the Centers for Medicare & Medicaid Services (CMS) quality-based payment programs, as this exemption allows the state to operate its own quality programs on an all-payer basis. In Rate Years 2020 and 2021, HSCRC underwent a process to change the measurement of PAU to better reflect hospital investments in community-care by assessing preventable admissions on a per capita basis.
Current PAU Savings Policy
While hospitals have achieved significant progress in transforming the delivery system to date, there needs to be a continued emphasis on care coordination, improving quality of care, and providing care management for complex and high-needs patients. To this end, the current PAU Savings Policy defines potentially avoidable utilization as sending readmissions, hospital admissions that might have been avoided with access to high-quality outpatient care, and avoidable hospitalizations for pediatric patients. The latter two are measured using the Agency
for Health Care Research and Quality’s Prevention Quality Indicators (PQIs) and Pediatric Quality Indicators (PDIs) measurement approaches. Reducing PQI admissions is critical for success in meeting Medicare financial targets under the All-Payer Model. PDIs were added in Rate Year 2021.
Key program components of PAU methodology:
Define PAU as PQIs, PDIs, and readmissions in inpatient and observation stays greater than or equal to 24 hours.
- Inpatient
and observation status readmissions: PAU hospital readmissions rates include the number of 30-day all cause inpatient and observation stay readmissions. Readmissions are accounted for by assessing the percent of each hospital's revenue that is associated with readmissions. Readmissions are flagged after avoidable admissions so that readmission revenue calculations exclude readmissions that are also avoidable admissions.
- Prevention
Quality Indicators: The rate of admissions with PQI 90 (Overall Composite)
- Pediatric
Quality Indicators: The rate of admissions with PDI 90 (Overall Composite)
Commission staff recognize that COVID-19 has had a significant impact on our hospitals. COVID cases were removed from the datasets used to calculate CY21 PAU performance for PQIs, PDIs, and readmissions.
For detailed webinar on
HSCRC Quality Initiatives, please visit the
Quality Overview Page.
Key PAU Savings Policy Documents
