We hypothesized that an Early Discharge Program (EDP) using case management(CM) to facilitate earlier discharge (d/c) of preterm infants to home or transfer to level II hospital would be cost effective without compromising quality. The EDP was instituted on 1/1/96. Infants born 1/1/96-6/30/96 at<30wk GA were included in the analysis. Infants were excluded for transfer or death prior to 30wk postmenstrual age (PMA). CM included involvement of family, patient care coordinator, primary care physician, neonatologist and home nursing. D/C criteria were based on physiologic stability and included:3 34wks PMA, po feeds, thermostability in an open crib, infrequent apnea and FiO2 requirement <30%. Infants were considered for transfer to a level II facility when medically stable with FiO2 requirement <30% and on enteral feeds. Families were contacted within 4 wks of d/c to assess parent satisfaction and post-d/c healthcare utilization. CM infants were stratified into 2 categories based on GA at birth and compared with a retrospective control (CTL) group (7/1/94-6/30/95) for NICU length of stay (LOS) and d/c wt[mean (SD)]: Table Regression analysis, controlled for gender, BW, 5 min apgar, insurance and race showed that LOS was decreased in the CM group by 7d (p=0.02). Using a 4 point rating system, all of the parents contacted, indicated that they were highly satisfied with the discharge preparations. ER visits and readmission within 2 wks of d/c were infrequent and not related to early discharge. Given that the average charge for an NICU is $2,000/day, we conclude that the preliminary data suggests that this ED program will have a substantial effect on NICU expenditures with no demonstrable compromise to healthcare delivery or parent satisfaction.