Batman has been admitted to Arkham Asylum, or as Scarecrow would like it to be known as, the Crane Center for Health and Wellness, and the prognosis isn't that good. A panel of doctors have concluded that more extreme measures need to be taken to cure the "Bat-Man's" insanity... and when the doctors are Mr. Freeze, Harley Quinn, Pyg and the Merrymaker, all under the effect of Gothtopia, their ideal solutions aren't too good... lots of cutting open involved.
Luckily for Batman, he knows Arkham like the back of his hand, remember Batman Annual #2 where he tested Arkham's security systems? Well, he also planted a backdoor entrance in them, so little by little, he disables the security, knocks out the guards, and tries to work up an antidote to the toxin, but always returns to his cell, so no one knows what he's been up to.
Bruce is running out of time, though. A visit from "Catbird" has tipped him off to the doctors wanting to preform surgery on him, so with the narrow timeframe, Bruce decides to get the last ingredient he needs for the antidote, and break out of Arkham... whose got the ingredient? Poison Ivy, who was immune to the Scarecrow's toxin from the beginning.
Ivy isn't that happy to see Batman, claiming if he had listened to her to begin with, none of this would be happening, but she appreciates the chivalry, and gives Batman a kiss. Bruce does his best to shake off Ivy's effects, telling her that she needs him as much as he needs her to get out, so controlling him would be useless. While the two synthesize the antidote, Bruce learns from Ivy that Scarecrow made Gothamite's fear go away, just so he could produce a much more pure terror out of them, when their daily mundane fears are no more. So that's where Scarecrow goes every night, into Gotham, terrorizing its citizens, who are the ones that have been killing themselves.
With the antidote synthizied, Bruce puts a batch of it into the air system of the asylum, along with a sedative, knocking everyone inside out, except for Ivy and himself, who remains immune to the sedative, thanks to Ivy's kiss... Oh yeah, there's also Killer Croc, whose brain is so small and reptilian, that the toxin didn't effect him, but Bruce and Ivy take him out pretty easily, as the sedative did have a slowing effect.
The escape from Arkham isn't going to be easy though, as Scarecrow is outside waiting for Batman. Of course Bruce gives the "I'm putting an end to this" line, but Scarecrow tells his old foe he's just getting started, and Batman should ask his friends. With that, Catwoman, Batwoman and Talon all show up, under Scarecrow's direct control.