The federal government is expected to announce its approval Friday of a plan that would allow Maryland to continue setting hospital reimbursement rates for Medicare patients and could become a national model for reducing health care costs.

The decision, eagerly anticipated by state officials and hospital executives, allows Maryland to remain the only state in the nation with a waiver from federally set Medicare rates, generally considered the lowest rates paid in every other state.

The blessing from the Centers for Medicare & Medicaid Services comes as a victory for state officials who pushed to keep the waiver, but modernize it to make it more sustainable by focusing more on preventive care and keeping patients out of the hospital.

While they supported the plan, it will radically alter the way Maryland hospitals — some of the largest employers in their communities — do business. Rather than tying reimbursement to admissions, the new system gives hospitals a pool of money to treat a specific population that will grow in tandem with the state's economy.