the provider neither shares in the savings nor incurs a penalty. No additional
shared savings are available if the provider squeezes costs lower than the
“Gain Sharing Limit” bounds, to discourage compromises on quality.117
Fig. 4. Arkansas Payment Improvement Initiative, “How the Episode
Payment Model Works”118
Interim data are in for the first two years of the APII, the “baseline
year” (2012) and the “performance year” (2013). In its recently issued
Statewide Tracking Report, the Arkansas Center for Health Improvement
trumpeted favorable quality improvement and cost containment results for
selected measures: a decrease in unnecessary antibiotic prescriptions for
non-specific upper respiratory infections;119 an across-the-board rise in
perinatal screening rates;120 a 1.4% reduction in hip and knee replacement
costs;121 a finding that 73% of Medicaid PAPs and 60% of Blue Cross/Blue
Shield PAPs either improved costs or remained in a “commendable” or
117. Id. at 24-25.
118. Joseph W. Thompson, Ark. Surgeon General, Slide Presentation at the National
Academy for State Health Policy Conference, Health Care Payment Improvement Initiative:
Building a Healthier Future for All Arkansans 7 (Sept. 21, 2012), available at
119. STATEWIDE TRACKING REPORT, supra note 103, at 2, app. B at 11-14. The decrease
was from 45% to 37%.
120. Id. at 2, app. B at 7-9.
121. Id. at 2; id., Appendix B, at 9-11 (Blue Cross/Blue Shield data only). The 1.4%
reduction left the total at 7% below projected costs.