The effect of prospective payment on admission and treatment policy: Evidence from inpatient rehabilitation facilities

Abstract

We examine provider responses to the Medicare inpatient rehabilitation facility (IRF) prospective payment system (PPS), which simultaneously reduced marginal reimbursement and increased average reimbursement. IRFs could respond to the PPS by changing the number of patients admitted, admitting different types of patients, or changing the intensity of care. We use Medicare claims data to separately estimate each type of provider response. We also examine changes in patient outcomes and spillover effects on other post-acute care providers. We find that costs of care initially fell following the PPS, which we attribute to changes in treatment decisions rather than the characteristics of patients admitted to IRFs within the diagnostic categories we examine. However, the probability of admission to IRFs increased after the PPS due to the expanded admission policies of providers. We find modest spillover effects in other post-acute settings and negative health impacts for only one of three diagnostic groups studied.

Bundled Payment vs. Fee-for-Service: Impact of Payment Scheme on Performance

“…This paper contrasts with ours in three main aspects: (i) we use optimization techniques rather than empirical strategies to obtain the provider decisions (ii) we do not focus on a specific policy shift, but obtain the provider decisions for a given reimbursement structure (iii) we consider alternative payment systems, such as the hybrid and stop-loss protection payments, in the context of coordinating decisions to a system optimum. Similarly, Sood et al (2013) consider inpatient rehabilitation facilities and the effect of initiatives taken by Medicare aiming at reducing the marginal reimbursement and increasing the fixed reimbursement. The authors investigate the extent to which providers respond to these changes in the payment system by adjusting the number of admitted patients, types of patients admitted and intensity of care.…”

Changes in Payment Regulation and Acute Care Use for Total Hip Replacement: Trends in Length of Stay, Costs, and Discharge, 1997–2012

“…Determinants of Discharge Disposition. Postacute care payment systems are designed to moderate spending and increase efficiency, but differences in payment levels, incentives, and admission/treatment policies exist across settings (Medicare Payment Advisory Commission [MedPAC], 2009), creating incentives to place patients in postacute care settings without regard to clinical need (Buntin, Colla, & Escarce, 2009;Colla et al, 2010;Grabowski et al, 2011;Huckfeldt et al, 2014;Sood et al, 2013). To generate data on patient need, the Deficit Reduction Act (DRA) of 2005 mandated development of the Continuity Assessment Record and Evaluation (CARE) tool, which measures patient information on admission and discharge to acute care hospitals and postacute care settings.…”

“…Most trend studies on acute care utilization and discharge of THR patients described in the literature have reported findings for Medicare patients (Colla, Escarce, Buntin, & Sood, 2010; Grabowski, Afendulis, & McGuire, 2011; Huckfeldt, Sood, Escarce, Grabowski, & Newhouse, 2014; Sood, Huckfeldt, Grabowski, Newhouse, & Escarce, 2013). Between 1992 and 2004, THR use increased from 62,636 to 93,537 or 40.9% (Cram et al, 2011).…”

Intensive rehabilitation programme for patients with subacute stroke in an inpatient rehabilitation facility: describing a protocol of a prospective cohort study

“…However, hospital bed availability and health insurance coverage determine access to inpatient rehabilitation facilities. 11 In most European countries, stroke rehabilitation services are not homogeneously distributed in the territory, existing a wide range of rehabilitation centres with different admission criteria 12 that vary across countries and regions within the same country. Therefore, it is crucial to continue investigating inpatient rehabilitation facilities’ benefits and claim for the financial resources needed to ensure the most optimal and effective care.…”