Rehabilitation costs: implications for prospective payment

To obtain information relevant to development of prospective payment for Medicare rehabilitation facilities (RFs) and skilled nursing facilities (SNFs): compares service utilization, length of stay (LOS), case mix, and resource consumption for Medicare patients receiving postacute institutional rehabilitation care.

Longitudinal patient-level and related facility-level data on Medicare hip fracture (n = 513) and stroke (n = 483) patients admitted in 1991-1994 to a sample of 27 RFs and 65 SNFs in urban areas in 17 states.

For each condition, two-group RF-SNF comparisons were made. Regression analysis was used to adjust RF-SNF differences in resource consumption per stay for patient condition (case mix) and other factors, since random assignment was not possible.

Providers at each facility were trained to collect patient case-mix and service utilization information. Secondary data also were obtained.

RF patients had shorter LOS, fewer total nursing hours (but more skilled nursing hours), and more ancillary hours than SNF patients. After adjustment, ancillary resource consumption per stay remained substantially higher for RF than SNF patients, particularly for stroke. The adjusted nursing resource consumption differences were smaller than the ancillary differences and not statistically significant for hip fracture. Supplemental outcome findings suggested minimal differences for hip fracture patients but better outcomes for RF than SNF stroke patients.

Much can be gained from an integrated approach to developing prospective payment for RFs and SNFs. In that context, consideration of condition-specific per-stay payment methods applicable to both settings appears warranted.