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Did the Medicare inpatient rehabilitation facility prospective payment system result in changes in relative patient
Susan M Paddock1, José J Escarce, Orla Hayden
1RAND Corporation, Santa Monica, California 90407-2138, USA. Susan_Paddock@rand.org
Background:
The Centers for Medicare and Medicaid Services implemented a prospective payment system (PPS) in 2002 for care provided by inpatient rehabilitation facilities (IRFs) to Medicare beneficiaries.
Objective:
We sought to examine changes in the composition of Medicare beneficiaries in IRFs by examining the percentages of patients having worse functional or health status than the average for their payment groups (relative severity) and of patients having greater cost or longer length of stay than the average for their payment groups (relative resource use) before versus after IRF PPS; to examine whether observed changes in relative resource use were expected given predicted changes; and to explore whether these effects varied by IRF Medicare volume.
Methods:
In an observational study of indicators of Medicare beneficiary relative severity and relative resource use, we studied cases paid for by Medicare during 1999 and 2002 having an acute care stay preceding their IRF stay (n = 363,542 in 1999 and 446,002 in 2002).
Results:
Similar percentages of cases had longer than expected lengths of stay, greater-than-expected costs per case, and worse-than-expected functional status pre- versus post-IRF PPS. Cases under the IRF PPS had lower predicted probabilities of death 150 days after admission. Although predicted relative resource use remained steady, observed relative resource use decreased after IRF PPS.
Conclusions:
IRF patient composition has not changed meaningfully for Medicare beneficiaries, but patients within payment groups are being provided less care, which could be attributable to the IRF PPS, existing trends in decreasing length of stay, or both.
Insights
The prospective payment system (PPS) for inpatient rehabilitation facilities (IRFs) did not change patient composition. However, IRF PPS may have led to decreased care intensity for Medicare beneficiaries.
Area of Science:
- Health Services Research
- Rehabilitation Medicine
- Health Economics
Background:
- The Centers for Medicare and Medicaid Services introduced a prospective payment system (PPS) for inpatient rehabilitation facilities (IRFs) in 2002.
- This system aimed to standardize reimbursement for Medicare beneficiaries based on patient characteristics.
Purpose of the Study:
- To analyze changes in Medicare beneficiary composition within IRFs before and after the implementation of the IRF PPS.
- To assess shifts in patient functional status, health status, cost, and length of stay relative to payment groups.
- To evaluate if changes in resource use aligned with predictions and varied by IRF Medicare volume.
Main Methods:
- An observational study analyzed Medicare beneficiary data from 1999 and 2002.
- Indicators of relative severity (functional/health status) and relative resource use (cost/length of stay) were examined.
- Patient cases with a preceding acute care stay were included (n=363,542 in 1999, n=446,002 in 2002).
Main Results:
- No significant changes were observed in the percentages of patients with worse functional status or greater resource use post-IRF PPS.
- Cases under IRF PPS showed lower predicted mortality probabilities at 150 days.
- Observed relative resource use decreased after IRF PPS implementation, despite stable predicted resource use.
Conclusions:
- The patient population in IRFs for Medicare beneficiaries remained largely consistent after the IRF PPS.
- A reduction in care intensity within payment groups was observed, potentially linked to the IRF PPS or other healthcare trends.
