Cost-effectiveness of the Medicare three-hour regulation

In September 1982 Medicare instituted a requirement that patients in acute medical rehabilitation hospital units receive a minimum of three hours per day of physical and occupational therapy combined. To investigate the consequences of that policy functional status, charges and other outstanding measures of rehabilitative outcomes were assessed for 934 patients before and after implementation of the regulation. After the regulation, average daily intensity of physical plus occupational therapy increased 0.55 hours per patient day, adding charges of $408,000 over the sample. The increased intensity of therapy provided no detectable benefit to patients in terms of improved functional status, living arrangement, or other outcomes. Results underscored the importance of grading the intensity of rehabilitation to the varying needs of patients.