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Objective: To measure the return on investment (ROI) for a pediatric asthma pay-for-reporting intervention initiated by a Medicaid managed care plan in New York State.

Design: Practice-level, randomized prospective evaluation.

Setting: Twenty-five primary care practices providing care to children enrolled in the Monroe Plan for Medical Care (the Monroe Plan).

Participants: Practices were randomized to either treatment (13 practices, 11 participated) or control (12 practices).

Intervention: For each of its eligible members assigned to a treatment group practice, the Monroe plan paid a low monthly incentive fee to the practice. To receive the incentive, treatment group practices were required to conduct, and report to the Monroe Plan, the results of chart audits on eligible members. Chart audits were conducted by practices every 6 months. After each chart audit, the Monroe Plan provided performance feedback to each practice comparing its adherence to asthma care guidelines with averages from all other treatment group practices. Control practices continued with usual care.

Main Outcome Measures: Intervention implementation and operating costs and per member, per month claims costs. ROI was measured by net present value (discounted cash flow analysis).

Results: The ROI to the Monroe Plan was negative, primarily due to high intervention costs and lack of reductions in spending on emergency department and hospital utilization for children in treatment relative to control practices.

Conclusions: A pay-for-reporting, chart audit intervention is unlikely to achieve the meaningful reductions in utilization of high-cost services that would be necessary to produce a financial ROI in 2.5 years.