The prospective payment system: implications for therapeutic recreation

In 1983, medicare began paying general hospitals by a prospective payment system based on diagnostically-related groupings (DRGs). The majority of therapeutic recreation settings (including psychiatric hospitals, rehabilitation centers, long-term care hospitals, and children's hospitals) have been exempted. However, in 1985, a plan and subsequent decision will be made on how to integrate these settings into this new system. This article provides an historical review of the medicare program, the rationale behind this new system, the method for implementing the DRGs, and the implications and strategies for therapeutic recreation.