Potentially Avoidable Utilization (PAU) Savings Policy
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Overview
The Maryland Health Services Cost Review Commission (HSCRC
or Commission) operates a potentially avoidable utilization (PAU) savings
policy as part of its portfolio of value-based payment policies. PAU is defined
as hospital care that is unplanned and may 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
through improved care coordination and enhanced community-based care became a
central focus. To this end, the Commission sets a prospective statewide
PAU savings adjustment that limits inflation on revenue related to PAU visits. 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.
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, 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 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.
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 and hospital admissions for
ambulatory-care sensitive conditions. Ambulatory care
sensitive conditions are conditions for which good outpatient care could
potentially prevent the need for hospitalization or for which early
intervention can prevent complications or more severe disease, such as diabetes
complications or community-acquired pneumonia. These admissions are measured
using the Agency
for Health Care Research and Quality’s Prevention Quality Indicators
(PQIs) measurement approach. Reducing PQI admissions is critical
for success in meeting Medicare financial targets under the All-Payer
Model. In Rate Year 2021, HSCRC added pediatric quality indicators (PDIs) from
AHRQ that are similar to PQIs.
Key program components of PAU methodology:
For detailed webinar on
HSCRC Quality Initiatives, please visit the
Quality Overview Page.
Key PAU Savings Policy Documents
