Community-acquired pneumonia (CAP) is associated with significant morbidity, mortality and utilization of health care resources. Strategies for decreasing cost of treating CAP include identifying low-risk patients and promoting the use of appropriate antibiotic therapy. Three MCOs in the Greater Baltimore/Washington D.C. area utilized a prediction rule for triaging patients with CAP (outpatient, inpatient or ICU), based on the risk for mortality, and jointly developed a treatment guideline based on the triaging. The guidelines were distributed to physicians within the three plans. OBJECTIVE: To determine the impact of the CAP treatment guidelines on LOS and cost. METHODS: Health and demographic information were abstracted from medical chart review and merged with billing data from these insurance plans for randomly selected patients. LOS and costs were compared for the two periods: pre-intervention and post-intervention. RESULTS: A decrease in LOS was observed in the post-intervention period for all the three plans by 0.5 days (p=0.69), 0.6 days (p=0.43), and 0.4 days (p<0.01) respectively. There was a decrease in the mean amounts billed for the three plans. The decrease in the mean amounts billed was $2,257 (p<0.01), $1,801 (p=0.77), and $259 (p=0.13) respectively. Results suggest that there may have been a favorable impact on both the LOS and cost across the three plans, but the results were not statistically significant. The guidelines had no impact on readmission or mortality. CONCLUSION: A reduction in LOS and cost was observed in all the three plans. Treatment guidelines provide a useful tool to reduce variability in rates of hospitalization and aid physicians in making proper decisions regarding treatment.