Rehabilitation therapy in skilled nursing facilities: effects of Medicare's new prospective payment system

Patient Characteristics and Treatment Patterns for Speech-Language Pathology Services in Skilled Nursing Facilities

PURPOSE

Skilled nursing facility (SNF) care has historically been influenced by systemic issues that could impact speech-language pathology (SLP) service provision. However, there has been little study specifically on factors associated with SLP service provision in SNFs. Large administrative data sets are rarely analyzed in SLP research but can be used to understand real-world SLP services. This study investigated associations between patient and facility characteristics and SLP services.

METHOD

Mixed-effects logistic regression models were used to evaluate factors associated with SLP service provision in 2018 Medicare administrative data representing 833,653 beneficiaries.

RESULTS

Beneficiaries had higher odds of receiving SLP services when they had neurologic diagnosis (odds ratio [OR] = 3.32), had SLP-related functional impairments (ORs = 1.19-3.41), and received other rehabilitative services (ORs = 3.11-3.78). Beneficiaries had lower odds of receiving SLP services when they received care from SNFs located in hospitals versus freestanding (OR = 0.45), with need for interpreter services (OR = 0.76) and with thresholding (OR = 0.68), a financially motivated practice. Direction of association varied across racial and ethnic groups and measures of location. Odds of being provided SLP services decreased with increasing communication impairment severity.

CONCLUSIONS

The results suggest that clinicians are identifying patients with diagnoses most likely to warrant SLP services. However, association disparities and weakening association of service provision with increasing impairment severity have concerning clinical implications. Health services research methods can be used to further explore SLP practices in SNFs to support equitable service provision.

Skilled Nursing Facility Organizational Characteristics Are More Strongly Associated With Multiparticipant Therapy Provision Than Patient Characteristics

OBJECTIVES

Multiparticipant physical and occupational therapy provision has fluctuated significantly in skilled nursing facilities (SNFs) under shifts in Medicare reimbursement policy. Multiparticipant therapy includes group (2-6 individuals per therapist) and concurrent therapy (2 individuals per therapist). This study uses recent patient-level data to characterize multiparticipant therapy provision in SNFs to help anticipate shifts under new Medicare policy and the COVID-19 pandemic.

METHODS

This secondary analysis used data on 1,016,984 post-acute rehabilitation stays in SNFs in 2018. This analysis identified patient predictors (eg, demographic, clinical) and organizational predictors (eg, ownership, quality, staffing) of receiving multiparticipant therapy using mixed-effects logistic regression. Among individuals who received any multiparticipant therapy, those patient or facility factors associated with high rates of multiparticipant therapy provision were also determined.

RESULTS

Less than 3% of individuals received multiparticipant therapy in 2018. Patient functional and cognitive impairment and indicators of market regulation were associated with lower odds of multiparticipant therapy. Effect sizes for organizational factors associated with multiparticipant therapy provision were generally larger compared with patient factors. High multiparticipant therapy provision was concentrated in <2% of SNFs and was positively associated with for-profit ownership, contract staffing, and low 5-star quality ratings.

CONCLUSION

SNF organizational characteristics tended to have stronger associations with multiparticipant therapy provision than patient factors, suggesting that changes in patient case-mix, as expected during the COVID-19 pandemic, may have less of an impact on multiparticipant therapy provision than organizational factors. Results suggest that for-profit SNFs in states with higher market regulation, SNFs providing high volumes of therapy, and SNFs utilizing high proportions of assistants and contract staff may be more responsive to Medicare policy by increasing multiparticipant therapy provision.

IMPACT

This study may help identify SNFs that are more likely to increase multiparticipant therapy provision under new Medicare payment policy.

For-Profit and Not-For-Profit Inpatient Rehabilitation in Traumatic Brain Injury: Analysis of Demographics and Outcomes

OBJECTIVE

To describe differences in traumatic brain injury patient characteristics and outcomes by inpatient rehabilitation facility profit status.

DESIGN

Retrospective database review utilizing the Uniform Data System for Medical Rehabilitation® (UDSMR).

SETTING

Inpatient rehabilitation facilities.

PARTICIPANTS

Individual discharges (n = 53,630) from 877 distinct rehabilitation facilities for calendar years 2016 through 2018.

INTERVENTION

NA MAIN OUTCOME MEASURES: Patient demographic data (age, race, primary payer source), admission and discharge Functional Independence Measure® (FIM®), FIM® gain, length of stay efficiency, acute hospital readmission from for-profit and not-for-profit IRFs within 30 days, and community discharges by facility profit status.

RESULTS

Patients at for-profit facilities were significantly older (69.69 vs. 64.12 years), with lower admission FIM® scores (52 vs. 57), shorter lengths of stay (13 vs. 15 days), and higher discharge FIM® scores (88 vs. 86); for-profit facilities had higher rates of community discharges (76.8% vs. 74.6%), but also had higher rates of readmission (10.3% vs. 9.9%).

CONCLUSIONS

The finding that for-profit facilities admit older patients who are reportedly less functional on admission and more functional on discharge, with higher rates of community discharge but higher readmission rates than not-for-profit facilities is an unexpected and potentially anomalous finding. In general, older, less functional patients who stay for shorter periods of time would not necessarily be expected to make greater functional gains. These differences should be further studied, to determine if differences in patient selection, coding/billing, or other unreported factors underlie these differences.

Therapy Staffing in Skilled Nursing Facilities Declined after Implementation of the Patient-Driven Payment Model

OBJECTIVE

The Patient-Driven Payment Model (PDPM), a new reimbursement policy for Skilled Nursing Facilities (SNFs), was implemented in October 2019. PDPM disincentivizes provision of intensive physical and occupational therapy, however, there is concern that declines in therapy staffing may negatively impact patient outcomes. This study aimed to characterize the SNF industry response to PDPM in terms of therapy staffing.

DESIGN

Segmented regression interrupted time series.

SETTING AND PARTICIPANTS

15,432 SNFs in the United States.

METHODS

Using SNF Payroll Based Journal data from January 1, 2019, through March 31, 2020, we calculated national weekly averages of therapy staffing minutes per patient-day for all therapy staff and for subgroups of physical and occupational therapists, therapy assistants, contract staff, and in-house employees. We used interrupted time series regression to estimate immediate and gradual effects of PDPM implementation.

RESULTS

Total therapy staffing minutes per patient-day declined by 5.5% in the week immediately following PDPM implementation (P < .001), and the trend experienced an additional decline of 0.2% per week for the first 6 months after PDPM compared with the negative pre-PDPM baseline trend (P < .001), for a 14.7% total decline by the end of March 2020. Physical and occupational therapy disciplines experienced similar immediate and gradual declines in staffing. Assistant and contract staffing reductions were larger than for therapist and in-house employees, respectively. All subgroups except for assistants and contract staff experienced significantly steeper declines in staffing trends compared with pre-PDPM trends.

CONCLUSIONS AND IMPLICATIONS

SNFs appeared to have responded to PDPM with both immediate and gradual reductions in therapy staffing, with an average decline of 80 therapy staffing minutes over the average patient stay. Assistant and contract staff experienced the largest immediate declines. Therapy staffing and quality outcomes require ongoing monitoring to ensure staffing reductions do not have negative implications for patients.

Medicare payment policy in skilled nursing facilities: Lessons from a history of mixed success

The current policy environment for rehabilitation in skilled nursing facilities (SNFs) is complex and dynamic, and SNFs are facing the dual challenges of recent Medicare payment policy change that disproportionately impacts rehabilitation for older adults and the COVID-19 pandemic. This article introduces an adapted framework based on Donabedian's model for evaluating quality of care and applies it to decades of Medicare payment policy to provide a historical view of how payment policy changes have impacted rehabilitation processes and patient outcomes for Medicare beneficiaries in SNFs. This review demonstrates how SNF responses to Medicare payment policy have historically varied based on organizational factors, highlighting the importance of considering such organizational factors in monitoring policy response and patient outcomes. This historical perspective underscores the mixed success of previous Medicare policies impacting rehabilitation and patient outcomes for older adults receiving care in SNFs and can help in predicting SNF industry response to current and future Medicare policy changes.

Reconstruction After Salvage Total Laryngectomy: A Cost-effectiveness Analysis

Objective

To determine the most cost-effective reconstruction method after salvage total laryngectomy.

Study Design

Cost-effectiveness analysis

Setting

Tertiary care hospitals with head and neck oncologic and reconstructive surgeons.

Subjects and Methods

We constructed a Markov-based decision model to compare reconstruction by primary closure to pectoralis flap and free flap after salvage total laryngectomy. The model simulated disease with transition probabilities and health utilities found in primary literature and estimated the average overall cost of each reconstructive method using Medicare billing codes. Effectiveness was compared using quality-adjusted life years (QALYs). One-way and probabilistic sensitivity analyses were performed to scrutinize the conclusions of our model. Reconstruction methods were compared using incremental cost-effectiveness ratios (ICERs). In the United States, less than $150,000 per QALY gained is considered cost-effective (2019 US dollars).

Results

Our base case analysis revealed that primary closure was less expensive ($44,370) and yielded more QALYs (0.91) than both pectoralis ($45,163, 0.81 QALYs) and free flap ($46,244, 0.85 QALYs), making it the most cost-effective option. Between flaps, free flap was cost-effective over pectoralis flap (ICER = $27,025/QALY gained). Sensitivity analyses showed primary closure as cost-effective 69% of the time over either flap. These conclusions were sensitive to the health utilities (quality of life) of each method of reconstruction.

Conclusion

Tissue flaps to augment closure after salvage total laryngectomy are not always the most cost-effective reconstructive option. The long-term morbidity of flap surgery oftentimes outweighs the benefit of lowering fistula rates after surgery. Careful consideration must be taken when advising patients of their reconstructive options.

Do financial incentives matter? Effects of Medicare price shocks on skilled nursing facility care

Skilled nursing facility (SNF) spending has been one of the fastest growing categories of Medicare spending over the past few decades, and reductions in SNF payments are often recommended as part of Medicare cost containment efforts. Using a quasi-experiment resulting from a policy-driven and facility-specific Medicare payment change, we provide new evidence on how Medicare payment changes affect the amount of SNF care provided to Medicare patients. Specifically, we examine a one-time, plausibly exogenous change in the hospital wage index, an area-level adjustment to SNF payments that affected the majority of SNFs nationwide. Using a panel dataset of SNFs, we model the effects of these payment changes on more than 12,000 SNFs across the United States. We find that increases in Medicare payment rates to SNFs increased the total number of Medicare resident days at SNFs. Specifically, a 5% payment increase raised Medicare resident days by 2.33% at facilities with a 10% Medicare share relative to 0%. Further, the effects were asymmetric: Although Medicare payment increases affected Medicare days, payment decreases did not. Our results have important implications for policies that alter the Medicare base payment rates to SNFs and other health care providers.

Characteristics of Nursing Home Providers With Distinct Patterns of Physical and Occupational Therapy Staffing

Previous work found a substantial growth in therapy staffing among nursing home providers following the introduction of Medicare's Prospective Payment System (PPS). Since the PPS, however, several new Medicare policies have been implemented that may impact the provision of rehabilitative care in nursing homes. In view of the rising focus on patient outcomes and provider performance, it is worthwhile to explore more recent therapy staffing patterns following the introduction of these Medicare programs. While our results show stable staffing levels through prior policy changes, upcoming Medicare payment changes will likely have a stronger impact that may result in reduced therapy staffing. In addition, given that our findings show that staffing patterns vary across provider type, we may see greater variation as a result of the upcoming changes. Thus, therapy staffing should continue to be monitored and deeper explorations into the impact of staffing changes on patient outcomes should be undertaken.

Association of Length of Stay, Recovery Rate, and Therapy Time per Day With Functional Outcomes After Hip Fracture Surgery

IMPORTANCE

Medicare is shifting from payment for postacute care services based on the volume provided to payment based on value as determined by patient characteristics and functional outcomes. Matching therapy time and length of stay (LOS) to patient needs will be critical to optimize functional outcomes and manage costs.

OBJECTIVE

To investigate the association among therapy time, LOS, and functional outcomes for patients following hip fracture surgery.

DESIGN, SETTING, AND PARTICIPANTS

This retrospective cohort study analyzed data on patients from 4 inpatient rehabilitation facilities and 7 skilled nursing facilities in the eastern and midwestern United States. Participants were patients aged 65 years or older who received inpatient rehabilitation services for hip fracture and had Medicare fee-for-service as their primary payer. Data were collected from 2005 to 2010. Analysis was conducted from November 2018 to June 2019.

EXPOSURE

Therapy minutes per LOS day.

MAIN OUTCOMES AND MEASURES

Functional Independence Measure mobility and self-care measures at discharge. Patients were categorized into 9 recovery groups based on low, medium, or high therapy minutes per LOS day and low, medium, or high rate of functional gain per day.

RESULTS

A total of 150 patients (101 [67.3%] female; 148 [98.6%] white; mean [SD] age, 82.0 [7.3] years) met inclusion criteria. Participants in all gain and therapy minutes per LOS day trajectories were similar in function at rehabilitation admission (mean [SD] mobility, 16.2 [3.2]; F8,141 = 1.26; P = .27) but differed significantly at discharge (mean [SD] mobility, 23.9 [5.2]; F8,141 = 14.34; P < .001). High-gain patients achieved mobility independence by discharge; low-gain patients needed assistance on nearly all mobility tasks. Medium-gain patients with a mean LOS of 27 days were independent in mobility at discharge; those with a mean LOS less than 21 days needed supervision with toilet transfers and were dependent with stairs. Length of stay and functional gain rate explained much of the variance in mobility and self-care scores at discharge. Although medium- and high-therapy minutes per LOS day groups were statistically significant in the regression model (β = 6.99; P = .001; and β = 11.46; P = .007, respectively), they explained only 1% of the variance in discharge outcome. Marginal means suggest that medium-gain patients with shorter LOS would have achieved mobility independence if LOS had been extended.

CONCLUSIONS AND RELEVANCE

In this study, rate of recovery and LOS in skilled nursing and inpatient rehabilitation facilities were associated with mobility and self-care outcomes at discharge following hip fracture surgery, particularly for medium-gain patients. Therapy time per day explained only 1% of the variance in discharge outcome. Discharging medium-gain patients before 21 days LOS may transfer burden of care to family and caregivers, home health, and outpatient services.

Quality Changes after Implementation of an Episode of Care Model with Strict Criteria for Physical Therapy in Ontario's Long-Term Care Homes

OBJECTIVES

To describe the proportion of residents receiving rehabilitation in long-term care (LTC) homes, and scores on activities of daily living (ADL) and falls quality indicators (QIs) before and after change from fee-for-service to an episode of care model; and to evaluate the effect of the change on the QIs.

DATA SOURCES

Secondary data were collected from all LTC homes in Ontario, Canada, between January 1, 2011 and March 31, 2015. Variables of interest were the proportion of residents per home receiving physical therapy (PT), and the scores on seven ADL and one falls QI.

STUDY DESIGN

Retrospective, longitudinal study.

DATA EXTRACTION

All data were extracted from the Resident Assessment Instrument Minimum Data Set.

PRINCIPAL FINDINGS

Fewer residents received PT after the policy change (84.6 percent, 2011; 56.6 percent, 2015). The policy change was associated with improved performance on several ADL QIs. However, having a large proportion of residents receive no PT or little PT was associated with poorer performance on two of the QIs measuring improvement in ADLs [No PT: -0.029 (-0.043 to -0.014); -0.048 (-0.068 to -0.027). PT <45 minutes per week: -0.012 (-0.026 to -0.002); -0.026 (-0.045 to -0.007); p < .01].

CONCLUSIONS

While controversial, the policy and subsequent PT service delivery change appears to be associated with improved performance on several ADL QIs, except in homes where a large proportion of residents receive no PT and low time-intensive PT.

First-dollar cost-sharing for skilled nursing facility care in medicare advantage plans

BACKGROUND

The initial days of a Medicare-covered skilled nursing facility (SNF) stay may have no cost-sharing or daily copayments depending on beneficiaries' enrollment in traditional Medicare or Medicare Advantage. Some policymakers have advocated imposing first-dollar cost-sharing to reduce post-acute expenditures. We examined the relationship between first-dollar cost-sharing for a SNF stay and use of inpatient and SNF services.

METHODS

We identified seven Medicare Advantage plans that introduced daily SNF copayments of $25-$150 in 2009 or 2010. Copays began on the first day of a SNF admission. We matched these plans to seven matched control plans that did not introduce first-dollar cost-sharing. In a difference-in-differences analysis, we compared changes in SNF and inpatient utilization for the 172,958 members of intervention and control plans.

RESULTS

In intervention plans the mean annual number of SNF days per 100 continuously enrolled inpatients decreased from 768.3 to 750.6 days when cost-sharing changes took effect. Control plans experienced a concurrent increase: 721.7 to 808.1 SNF days per 100 inpatients (adjusted difference-in-differences: -87.0 days [95% CI (-112.1,-61.9)]). In intervention plans, we observed no significant changes in the probability of any SNF service use or the number of inpatient days per hospitalized member relative to concurrent trends among control plans.

CONCLUSIONS

Among several strategies Medicare Advantage plans can employ to moderate SNF use, first-dollar SNF cost-sharing may be one influential factor.

TRIAL REGISTRATION

Not applicable.

The Effect of Medicare's Prospective Payment System on Discharge Outcomes of Skilled Nursing Facility Residents

In July 1998, the Centers for Medicare and Medicaid Services (CMS) changed the payment method for Medicare (Part A) skilled nursing facility (SNF) care from a cost-based system to a prospective payment system (PPS). Unlike the previous cost-based payment system, PPS restricts skilled nursing facility payment to pre-determined levels. CMS also reduced the total payments to SNFs coincident with PPS implementation. These changes might reduce quality of care at skilled nursing facilities and could be reflected in resident discharge patterns. The present study examines the effect of the 1998 policy change on resident discharge outcomes. The results indicate that PPS reduced the relative risk of discharge to home and to death for Medicare residents (compared to non-Medicare residents) and had no significant effect on hospitalizations or transfers.

Medicare's Prospective Payment System for Skilled Nursing Facilities: Effects on Staffing and Quality of Care

In 1998, Medicare began phasing in a new prospective payment system (PPS) for skilled nursing facilities (SNFs). This paper measures facility-level changes in nurse staffing and quality at freestanding SNFs from 1997 (pre-PPS) to 2001 (post-PPS). Findings show a positive but small association between changes in payment levels and changes in nurse staffing. Among for-profits, the elimination of cost reimbursement is associated with a large drop in nurse staffing. Additionally, the elimination of cost reimbursement is associated with worsening in one of four measures of quality of care; however, the quality results are not statistically robust.

Does More Therapy in Skilled Nursing Facilities Lead to Better Outcomes in Patients With Hip Fracture?

BACKGROUND

Skilled nursing facilities (SNFs) have increasingly been providing more therapy hours to beneficiaries of Medicare. It is not known whether these increases have improved patient outcomes.

OBJECTIVE

The study objectives were: (1) to examine temporal trends in therapy hour volumes and (2) to evaluate whether more therapy hours are associated with improved patient outcomes.

DESIGN

This was a retrospective cohort study.

METHODS

Data sources included the Minimum Data Set, Medicare inpatient claims, and the Online Survey, Certification, and Reporting System. The study population consisted of 481,908 beneficiaries of Medicare fee-for-service who were admitted to 15,496 SNFs after hip fracture from 2000 to 2009. Linear regression models with facility and time fixed effects were used to estimate the association between the quantity of therapy provided in SNFs and the likelihood of discharge to home.

RESULTS

The average number of therapy hours increased by 52% during the study period, with relatively little change in case mix at SNF admission. An additional hour of therapy per week was associated with a 3.1-percentage-point (95% confidence interval=3.0, 3.1) increase in the likelihood of discharge to home. The effect of additional therapy decreased as the Resource Utilization Group category increased, and additional therapy did not benefit patients in the highest Resource Utilization Group category.

LIMITATIONS

Minimum Data Set assessments did not cover details of therapeutic interventions throughout the entire SNF stay and captured only a 7-day retrospective period for measures of the quantity of therapy provided.

CONCLUSIONS

Increases in the quantity of therapy during the study period cannot be explained by changes in case mix at SNF admission. More therapy hours in SNFs appear to improve outcomes, except for patients with the greatest need.

Workforce Projections 2010-2020: Annual Supply and Demand Forecasting Models for Physical Therapists Across the United States

BACKGROUND

Health human resources continue to emerge as a critical health policy issue across the United States.

OBJECTIVE

The purpose of this study was to develop a strategy for modeling future workforce projections to serve as a basis for analyzing annual supply of and demand for physical therapists across the United States into 2020.

DESIGN

A traditional stock-and-flow methodology or model was developed and populated with publicly available data to produce estimates of supply and demand for physical therapists by 2020.

METHODS

Supply was determined by adding the estimated number of physical therapists and the approximation of new graduates to the number of physical therapists who immigrated, minus US graduates who never passed the licensure examination, and an estimated attrition rate in any given year. Demand was determined by using projected US population with health care insurance multiplied by a demand ratio in any given year. The difference between projected supply and demand represented a shortage or surplus of physical therapists.

RESULTS

Three separate projection models were developed based on best available data in the years 2011, 2012, and 2013, respectively. Based on these projections, demand for physical therapists in the United States outstrips supply under most assumptions.

LIMITATIONS

Workforce projection methodology research is based on assumptions using imperfect data; therefore, the results must be interpreted in terms of overall trends rather than as precise actuarial data-generated absolute numbers from specified forecasting.

CONCLUSIONS

Outcomes of this projection study provide a foundation for discussion and debate regarding the most effective and efficient ways to influence supply-side variables so as to position physical therapists to meet current and future population demand. Attrition rates or permanent exits out of the profession can have important supply-side effects and appear to have an effect on predicting future shortage or surplus of physical therapists.

Medicare skilled nursing facility reimbursement and upcoding

Post-acute care provided by skilled nursing facilities (SNFs) is reimbursed by Medicare under a prospective payment system using resource utilization groups (RUGs) that adjust payment intensity on the basis of predefined ranges of weekly therapy minutes provided and the functionality of the patient. Individual RUGs account for differences in the intensity of care provided, but there exists significant regional variation in the payments SNFs receive from Medicare due to the use of geographic adjustment factors. This paper is the first to use this geographic variation in the generosity of Medicare reimbursement to empirically test if SNFs respond to payment differences between RUG categories. The results are highly suggestive that SNFs upcode patients by providing additional therapy minutes to increase revenue, whereas we find no evidence of upcoding related to patient functionality scores. Simulating how different payment differentials affect RUG selection, we predict that reducing the financial incentive to upcode could result in significant savings to Medicare.

Medicare payment reform and provider entry and exit in the post-acute care market

OBJECTIVE

To understand the impacts of Medicare payment reform on the entry and exit of post-acute providers.

DATA SOURCES

Medicare Provider of Services data, Cost Reports, and Census data from 1991 through 2010.

STUDY DESIGN

We examined market-level changes in entry and exit after payment reforms relative to a preexisting time trend. We also compared changes in high Medicare share markets relative to lower Medicare share markets and for freestanding relative to hospital-based facilities.

DATA EXTRACTION METHODS

We calculated market-level entry, exit, and total stock of home health agencies, skilled nursing facilities, and inpatient rehabilitation facilities from Provider of Services files between 1992 and 2010. We linked these measures with demographic information from the Census and American Community Survey, information on Certificate of Need laws, and Medicare share of facilities in each market drawn from Cost Report data.

PRINCIPAL FINDINGS

Payment reforms reducing average and marginal payments reduced entries and increased exits from the market. Entry effects were larger and more persistent than exit effects. Entry and exit rates fluctuated more for home health agencies than skilled nursing facilities. Effects on number of providers were consistent with entry and exit effects.

CONCLUSIONS

Payment reform affects market entry and exit, which in turn may affect market structure, access to care, quality and cost of care, and patient outcomes. Policy makers should consider potential impacts of payment reforms on post-acute care market structure when implementing these reforms.

Do changes in hospital outpatient payments affect the setting of care?

OBJECTIVE

To examine whether decreases in Medicare outpatient payment rates under the Outpatient Prospective Payment System (OPPS) caused outpatient care to shift toward the inpatient setting.

DATA SOURCES/STUDY SETTING

Hospital inpatient and outpatient discharge files from the Florida Agency for Health Care Administration from 1997 through 2008.

STUDY DESIGN

This study focuses on inguinal hernia repair surgery, one of the most commonly performed surgical procedures in the United States. We estimate multivariate regressions of inguinal hernia surgery counts in the outpatient setting and in the inpatient setting. The key explanatory variable is the time-varying Medicare payment rate specific to the procedure and hospital. Control variables include time-varying hospital and county characteristics and hospital and year-fixed effects.

PRINCIPAL FINDINGS

Outpatient hernia surgeries fell in response to OPPS-induced rate cuts. The volume of inpatient hernia repair surgeries did not increase in response to reductions in the outpatient reimbursement rate.

CONCLUSIONS

Potential substitution from the outpatient setting to the inpatient setting does not pose a serious threat to Medicare's efforts to contain hospital outpatient costs.

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

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.

Medicare postacute care payment reforms have potential to improve efficiency of care, but may need changes to cut costs

The Affordable Care Act mandates changes in payment policies for Medicare postacute care services intended to contain spending in the long run and help ensure the program's financial sustainability. In addition to reducing annual payment increases to providers under the existing prospective payment systems, the act calls for demonstration projects of bundled payment, accountable care organizations, and other strategies to promote care coordination and reduce spending. Experience with the adoption of Medicare prospective payment systems in postacute care settings approximately a decade ago suggests that current reforms could, but need not necessarily, produce such undesirable effects as decreased access for less profitable patients, poorer patient outcomes, and only short-lived curbs on spending. Policy makers will need to be vigilant in monitoring the impact of the Affordable Care Act reforms and be prepared to amend policies as necessary to ensure that the reforms exert persistent controls on spending without compromising the delivery of patient-appropriate postacute services.

Hospital volume responses to Medicare's Outpatient Prospective Payment System: evidence from Florida

Effective in 2000, Medicare's Outpatient Prospective Payment System (OPPS) sets pre-determined reimbursement rates for hospital outpatient services, replacing the prior cost-based methods of reimbursement. Using Florida outpatient discharge data, we study the effect of OPPS on hospital outpatient volume. We find that on average Medicare rate cuts either decreased or had no significant effect on Medicare volume, but increased private fee-for-service (FFS) volume. We also find that responses vary with the hospital's "exposure" to Medicare payment changes, where exposure is measured as the baseline Medicare patient share. Compared to less exposed hospitals, highly exposed hospitals responded with larger increases in private FFS volume and with smaller decreases (in some cases, even increases) in Medicare volume when payment rates fell. Our results are consistent with provider demand inducement.

Factors predicting rehospitalization of elderly patients in a postacute skilled nursing facility rehabilitation program

OBJECTIVE

To examine potential risk factors for rehospitalization of skilled nursing facility (SNF) rehabilitation patients.

DESIGN

Retrospective review of rehabilitation charts.

SETTING

SNF rehabilitation beds (n=114) at a 514-bed urban, academic nursing home that receives patients from tertiary care hospitals.

PARTICIPANTS

Consecutive rehabilitation patients (n=50) who were rehospitalized during days 4 to 30 of rehabilitation, compared with a matched group of rehabilitation patients (n=50) who were discharged without rehospitalization.

INTERVENTIONS

Not applicable.

MAIN OUTCOME MEASURE

Data on potential risk factors were collected: demographics, medical history, conditions associated with preceding hospitalization, and initial rehabilitation examination and laboratory values. The clinical conditions precipitating rehospitalizations were noted.

RESULTS

Sixty-two percent of rehospitalizations were related to complications or recurrence of the same medical condition that was treated during the preceding hospitalization. The rehospitalized group had significantly more comorbidities including anemia (P=.001) and malignant solid tumors (P<.001), index hospitalizations involving a gastrointestinal condition (P=.001), needed more assistance with eating (P=.001) and walking (P=.03), and had lower hemoglobin (P=.002) and albumin levels (P<.001). A logistic regression model found that the strongest predictors for rehospitalization are a history of a malignant solid tumor (odds ratio [OR]=10.10), a recent hospitalization involving gastrointestinal conditions (OR=4.62), and a low serum albumin level (with each unit decrease in albumin, the odds of rehospitalization are 4 times greater [OR=.24, P=.005]).

CONCLUSIONS

Comorbid conditions, reasons for index hospitalization, and laboratory values are associated with an increased risk for rehospitalization. Further studies are needed to identify high-risk elderly patients and target interventions to minimize rehospitalizations.

How does the volume of post-acute care respond to changes in the payment rate?

OBJECTIVE

Measure the effect of changes from 1997 to 2001 in Medicare's payment rates for skilled nursing facilities (SNFs) on the volume of SNF services and services in other settings.

METHODS

This study uses as its source of variation in payment rates the substantial changes that occurred as a result of the Balanced Budget Act of 1997. SNF volume equals the number of Medicare-covered SNF days per fee-for-service beneficiary per year, measured at the level of the hospital service area.

RESULTS

The estimated elasticity of SNF volume with respect to SNF payment rates is 0.13, meaning that an increase in SNF payment rates is associated with an increase in SNF volume and a decrease in payment rates is associated with a decrease in volume-this implies that SNFs exhibit a normal supply curve, consistent with standard economic theory. In an extension of our main analysis, we find that volume changes appear to be driven largely by facility openings and closures. Among facilities that remained open throughout the study period, volume responses were influenced by changes in the number of admissions (rather than length of stay) and changes in payer mix (rather than changes in capacity). We also find that changes in SNF volume primarily reflect net changes in total days of Medicare-covered institutional care, rather than substitution of one setting for another.

The effects of California minimum nurse staffing laws on nurse labor and patient mortality in skilled nursing facilities

This article investigates how a change in minimum nurse staffing regulation for California skilled nursing facilities (SNFs) affects nurse employment and how induced changes in nurse staffing affect patient mortality. In 2000, legislation increased the minimum nurse staffing standard and altered the calculation of nurse staffing, which created incentives to shift employment to lower skilled nurse labor. SNFs constrained by the new regulation increase absolute and relative hours worked by the lowest skilled type of nurse. Using this regulation change to instrument for measured nurse staffing levels, it is determined that increases in nurse staffing reduce on-site SNF patient mortality.

Medicare prospective payment and the volume and intensity of skilled nursing facility services

In 1998, Medicare adopted a per diem Prospective Payment System (PPS) for skilled nursing facility care, which was intended to deter the use of high-cost rehabilitative services. The average per diem decreased under the PPS, but because per diems increased for greater therapy minutes, the ability of the PPS to deter the use of high-intensity services was questionable. In this study, we assess how the PPS affected the volume and intensity of Medicare services. By volume we mean the product of the number of Medicare residents in a facility and the average length-of-stay, by intensity we mean the time per week devoted to rehabilitation therapy. Our results indicate that the number of Medicare residents decreased under PPS, but rehabilitative services and therapy minutes increased while length-of-stay remained relatively constant. Not surprisingly, when subsequent Medicare policy changes increased payment rates, Medicare volume far surpassed the levels seen in the pre-PPS period.

Geographic Market Definition: The Case of Medicare-Reimbursed Skilled Nursing Facility Care

Correct geographic market definition is important to study the impact of competition. In the nursing home industry, most studies use geopolitical boundaries to define markets. This paper uses the Minimum Data Set to generate an alternative market definition based on patient flows for Medicare skilled nursing facilities. These distances are regressed against a range of nursing home and area characteristics to determine what influences market size. We compared Herfindahl-Hirschman Indices based on county and resident-flow measures of geographic market definition. Evidence from this comparison suggests that using the county for the market definition is not appropriate across all states.

Effects of competition on the cost and quality of inpatient rehabilitation care under prospective payment

OBJECTIVE

To determine the effect of competition in postacute care (PAC) markets on resource intensity and outcomes of care in inpatient rehabilitation facilities (IRFs) after prospective payment was implemented.

DATA SOURCES

Medicare claims, Provider of Services file, Enrollment file, Area Resource file, Minimum Data Set.

STUDY DESIGN

We created an exogenous measure of competition based on patient travel distances and used instrumental variables models to estimate the effect of competition on inpatient rehabilitation costs, length of stay, and death or institutionalization.

DATA EXTRACTION METHODS

A file was constructed linking data for Medicare patients discharged from acute care between 2002 and 2003 and admitted to an IRF with a diagnosis of hip fracture or stroke.

PRINCIPAL FINDINGS

Competition had different effects on treatment intensity and outcomes for hip fracture and stroke patients. In the treatment of hip fracture, competition increased costs and length of stay, while increasing rates of death or institutionalization. In the treatment of stroke, competition decreased costs and length of stay and produced inferior outcomes.

CONCLUSIONS

The effects of competition in PAC markets may vary by condition. It is important to study the effects of competition by diagnostic condition and to study the effects across populations that vary in severity. Our finding that higher competition under prospective payment led to worse IRF outcomes raises concerns and calls for additional research.

Health services utilization after fractures: evidence from Medicare

BACKGROUND

Osteoporosis-related fractures impose a large and growing societal burden, including adverse health effects and direct medical costs. Postfracture utilization of health care services represents an alternative measure of the resource costs associated with these fractures.

METHODS

We use a 5% random sample of Medicare claims data to construct annual cohorts (2000-2004) of beneficiaries diagnosed with incident fractures at one of seven sites--clinical vertebral, hip pelvis, femur, tibia/fibula, humerus, and distal radius/ulna. We use person-specific changes in health services utilization (eg, inpatient acute/postacute days, home health visits, physical, and occupational therapy) before/after fractures and probabilities of entry into (long-term) nursing home residency to estimate the utilization burden associated with fractures.

RESULTS

Relative to the prior 6-month period, rates of acute hospitalization are between 19.5 (distal radius/ulna) and 72.4 (hip) percentage points higher in the 6 months after fractures. Average acute inpatient days are 1.9 (distal radius/ulna) to 8.7 (hip) higher in the postfracture period. Fractures are associated with large increases in all forms of postacute care, including postacute hospitalizations (13.1-71.5 percentage points), postacute inpatient days (6.1-31.4), home health care hours (3.4-8.4), and hours of physical (5.2-23.6) and occupational (4.3-14.0) therapy. Among patients who were community dwelling at the time of the initial fracture, 0.9%-1.1% (2.4%-4.0%) were living in a nursing home 6 months (1 year) after the fracture.

CONCLUSIONS

Fractures are associated with significant increases in health services utilization relative to prefracture levels. Additional research is needed to assess the determinants and effectiveness of alternative forms of fracture care.

Sensitivity of nursing home cost comparisons to method of dementia diagnosis ascertainment

This study compared the association of differing methods of dementia ascertainment, derived from multiple sources, with nursing home (NH) estimates of prevalence of dementia, length of stay, and costs an understudied issue. Subjects were 2050 new admissions to 59 Maryland NHs, from 1992 to 1995 followed longitudinally for 2 years. Dementia was ascertained at admission from charts, Medicare claims, and expert panel. Overall 59.5% of the sample had some indicator of dementia. The expert panel found a higher prevalence of dementia (48.0%) than chart review (36.9%) or Medicare claims (38.6%). Dementia cases had lower relative average per patient monthly costs, but longer NH length of stay compared to nondementia cases across all methods. The prevalence of dementia varied widely by method of ascertainment, and there was only moderate agreement across methods. However, lower costs for dementia among NH admissions are a robust finding across these methods.

Effects of payment changes on trends in post-acute care

OBJECTIVE

To test how the implementation of new Medicare post-acute payment systems affected the use of inpatient rehabilitation facilities (IRFs), skilled nursing facilities (SNFs), and home health agencies.

DATA SOURCES

Medicare acute hospital, IRF, and SNF claims; provider of services file; enrollment file; and Area Resource File data.

STUDY DESIGN

We used multinomial logit models to measure realized access to post-acute care and to predict how access to alternative sites of care changed in response to prospective payment systems.

DATA EXTRACTION METHODS

A file was constructed linking data for elderly Medicare patients discharged from acute care facilities between 1996 and 2003 with a diagnosis of hip fracture, stroke, or lower extremity joint replacement.

PRINCIPAL FINDINGS

Although the effects of the payment systems on the use of post-acute care varied, most reduced the use of the site of care they directly affected and boosted the use of alternative sites of care. Payment system changes do not appear to have differentially affected the severely ill.

CONCLUSIONS

Payment system incentives play a significant role in determining where Medicare beneficiaries receive their post-acute care. Changing these incentives results in shifting of patients between post-acute sites.

Determinants of performance failure in the nursing home industry

This study investigates the determinants of performance failure in U.S. nursing homes. The sample consisted of 91,168 surveys from 10,901 facilities included in the Online Survey Certification and Reporting system from 1996 to 2005. Failed performance was defined as termination from the Medicare and Medicaid programs. Determinants of performance failure were identified as core structural change (ownership change), peripheral change (related diversification), prior financial and quality of care performance, size and environmental shock (Medicaid case mix reimbursement and prospective payment system introduction). Additional control variables that could contribute to the likelihood of performance failure were included in a cross-sectional time series generalized estimating equation logistic regression model. Our results support the contention, derived from structural inertia theory, that where in an organization's structure change occurs determines whether it is adaptive or disruptive. In addition, while poor prior financial and quality performance and the introduction of case mix reimbursement increases the risk of failure, larger size is protective, decreasing the likelihood of performance failure.

The impact of Medicare's Prospective Payment System on staffing of long-term acute care hospitals: the early evidence

BACKGROUND

Long-term acute care hospitals (LTACHs) treat patients with complex medical conditions requiring hospital care for extended periods of time. In the last decade, Medicare saw spiraling costs for post-acute care settings. The Balanced Budget Act mandated the use of Prospective Payment System (PPS) for all post-acute care settings including LTACHs. Medicare shifted to PPS for LTACHs in October 2002.

PURPOSE

This study analyzes the early effect of Medicare's PPS on the staffing intensity of LTACHs.

METHODOLOGY/APPROACH

The study uses panel data of measures of hospital and market characteristics in years 2001 through 2004. The impact of the payment mechanism, market, and organizational variables on the staffing intensity of LTACHs is evaluated using fixed-effects (within-groups) regression analysis.

FINDINGS

The fixed-effects regression models found that Medicare's PPS was associated with higher staffing intensity of the LTACHs in years 2003 and 2004. Market-level per capita income was significantly positively associated with staffing intensity. No secular trend in staffing intensity was found.

PRACTICE IMPLICATIONS

The concern that the cost containment incentives of PPS would result in lowered staffing levels of LTACHs was not borne out by this study. Further follow-up is required to assess in the longer term the effects of PPS on staffing and quality of care in LTACHs.

The market for long-term care services

Although a large literature has established the importance of market and regulatory forces within the long-term care sector, current research in this field is limited by a series of data, measurement, and methodological issues. This paper provides a comprehensive review of these issues with an emphasis on identifying initiatives that will increase the volume and quality of long-term care research. Recommendations include: the construction of standard measures of long-term care market boundaries, the broader dissemination of market and regulatory data, the linkage of survey-based data with market measures, the encouragement of further market-based studies of noninstitutional long-term care settings, and the standardization of Medicaid cost data.

Restructuring in response to case mix reimbursement in nursing homes: a contingency approach

BACKGROUND

Resident-based case mix reimbursement has become the dominant mechanism for publicly funded nursing home care. In 1998 skilled nursing facility reimbursement changed from cost-based to case mix adjusted payments under the Medicare Prospective Payment System for the costs of all skilled nursing facility care provided to Medicare recipients. In addition, as of 2004, 35 state Medicaid programs had implemented some form of case mix reimbursement.

PURPOSE

The purpose of the study is to determine if the implementation of Medicare and Medicaid case mix reimbursement increased the administrative burden on nursing homes, as evidenced by increased levels of nurses in administrative functions.

METHODOLOGY/APPROACH

The primary data for this study come from the Centers for Medicare and Medicaid Services Online Survey Certification and Reporting database from 1997 through 2004, a national nursing home database containing aggregated facility-level information, including staffing, organizational characteristics and resident conditions, on all Medicare/Medicaid certified nursing facilities in the country. We conducted multivariate regression analyses using a facility fixed-effects model to examine the effects of the implementation of Medicaid case mix reimbursement and Medicare Prospective Payment System on changes in the level of total administrative nurse staffing in nursing homes.

FINDINGS

Both Medicaid case mix reimbursement and Medicare Prospective Payment System increased the level of administrative nurse staffing, on average by 5.5% and 4.0% respectively. However, lack of evidence for a substitution effect suggests that any decline in direct care staffing after the introduction of case mix reimbursement is not attributable to a shift from clinical nursing resources to administrative functions.

PRACTICE IMPLICATIONS

Our findings indicate that the administrative burden posed by case mix reimbursement has resource implications for all freestanding facilities. At the margin, the increased administrative burden imposed by case mix may become a factor influencing a range of decisions, including resident admission and staff hiring.

Obesity and inpatient rehabilitation outcomes following knee arthroplasty: a multicenter study

OBJECTIVE

This multicenter study examined whether inpatient rehabilitation outcomes following total knee arthroplasty (TKA) were influenced by BMI.

METHODS AND PROCEDURES

This was a retrospective, comparative study conducted using a computerized medical database and medical records derived from TKA patients, at 15 independent rehabilitation hospitals (N = 5,428). Patients were separated into four groups based on BMI: non-obese (BMI < 25 kg/m(2)), overweight (25-29.9 kg/m(2)), moderately obese (30-40 kg/m(2)), severely obese (BMI > or = 40 kg/m(2)). All patients completed an interdisciplinary inpatient rehabilitation program post-TKA. Total and individual functional independence measure (FIM) scores, length of stay (LOS), FIM efficiency scores, itemized hospital charges, and discharge disposition location, were collected.

RESULTS

The percentage of total FIM change was 7.5% greater by the time of discharge in the non-obese than in the very severely obese (P < 0.05). FIM efficiency was lowest in the severely obese as compared to the remaining groups (3.7 points (pts)/day vs. 4.0-4.3 pts/day; P = 0.044). The change in the motor FIM score from admission to discharge was 6.7-15.6% greater in the non-obese than in the remaining groups (P < 0.05). The changes in cognition FIM, toilet transfer and walking without assistance scores were higher in the non-obese as compared to the severely obese group (P < 0.05). The severely obese group had higher total, physical and occupational therapy and pharmacy charges than the remaining groups (P < 0.05).

DISCUSSION

An excessive BMI does not prevent gains during inpatient rehabilitation; however, these gains are made less efficiently and at a higher cost than those made when the BMI is low.

Policy issues related to the rehabilitation of the surgical cancer patient

Four policy challenges that face the rehabilitation community in providing services to surgical cancer patients are reviewed: (1) achieving capacity to meet the complex rehabilitation needs of a growing population of cancer patients and long-term survivors; (2) identifying effective models for delivering cancer rehabilitation services; (3) understanding complex insurance coverage and payment policies and determining their effects on access to rehabilitation services; and (4) investing in clinical and health services research to guide rehabilitation practice. Recommendations are made to increase the recognition of cancer rehabilitation as an essential component of cancer survivors' care, improve access to appropriate rehabilitation services, and accelerate the pace of cancer rehabilitation research.

Medicare payment changes and nursing home quality: effects on long-stay residents

The Balanced Budget Act of 1997 dramatically changed the way that Medicare pays skilled nursing facilities, providing a natural experiment in nursing home behavior. Medicare payment policy (directed at short-stay residents) may have affected outcomes for long-stay, chronic-care residents if services for these residents were subsidized through cost-shifting prior to implementation of Medicare prospective payment for nursing homes. We link changes in both the form and level of Medicare payment at the facility level with changes in resident-level quality, as represented by pressure sores and urinary tract infections in Minimum Data Set (MDS) assessments. Results show that long-stay residents experienced increased adverse outcomes with the elimination of Medicare cost reimbursement.

Changes in the use of postacute care during the initial Medicare payment reforms

OBJECTIVE

To examine changes in postacute care (PAC) use during the initial Medicare payment reforms enacted by the Balanced Budget Act of 1997.

DATA SOURCES

We used claims data from the 5 percent Medicare beneficiary sample in 1996, 1998, and 2000. Linked data from the Denominator file, Provider of Service file, and Area Resource File provided additional patient, hospital, and market-area characteristics.

STUDY DESIGN

Six disease groups with high PAC use were selected for analysis. We used multinomial logit regression to examine how PAC use differed by year of service, controlling for patient, hospital, and market-area characteristics.

PRINCIPAL FINDINGS

There were major changes in PAC use, and a portion of services shifted to settings where reimbursement remained cost-based. During the first reform, the home health agency interim payment system, home health use decreased consistently across disease groups. This decrease was accompanied by increased use in skilled nursing facilities (SNFs). Following the implementation of the prospective payment system for SNFs, the use of inpatient rehabilitation facilities increased.

CONCLUSIONS

The shift in usage among settings occurred in two stages that corresponded to the timing of payment reforms for home health agencies and SNFs. Evidence strongly suggests the substitutability between PAC settings. Financial incentives, in addition to clinical needs and individual preferences, play a major role in PAC use.

Impact of Medicare's prospective payment system on hospitals, skilled nursing facilities, and home health agencies: how the Balanced Budget Act of 1997 may have altered service patterns for Medicare providers

The prospective payment system is one of many changes in reimbursement that has affected the delivery of health care. Originally developed for the payment of inpatient hospital services, it has become a major factor in how all health insurance is reimbursed. The policy implications extend beyond the Medicare program and affect the entire health care delivery system. Initially implemented in 1982 for payments to hospitals, prospective payment system was extended to payments for skilled nursing facility and home health agency services by the Balanced Budget Act of 1997. The intent of the Balanced Budget Act was to bring into balance the federal budget through reductions in spending. The decisions that providers have made to mitigate the impact are a function of ownership type, organizational mission, and current level of Medicare participation. This article summarizes the findings of several initial studies on the Balanced Budget Act's impact and discusses how changes in Medicare reimbursement policy have influenced the delivery of health care for the general public and for Medicare beneficiaries.

Poststroke rehabilitation: outcomes and reimbursement of inpatient rehabilitation facilities and subacute rehabilitation programs

BACKGROUND AND PURPOSE

To assess whether poststroke rehabilitation outcomes and reimbursement for Medicare beneficiaries differ across inpatient rehabilitation facilities (IRFs) and skilled nursing facility (SNF) subacute rehabilitation programs.

METHODS

Clinical data were linked with Medicare claims for 58,724 Medicare beneficiaries with a recent stroke who completed treatment in 1996 or 1997 in IRFs and subacute rehabilitation SNFs that subscribed to the Uniform Data System for Medical Rehabilitation. Outcome measures were discharge destination, discharge FIM ratings and Medicare Part A reimbursement during the institutional stay.

RESULTS

IRF patients that were more likely to have a community-based discharge, compared with rehabilitation SNF patients, were patients with mild motor disabilities and FIM cognitive ratings of 23 or greater (adjusted odds ratio [AOR]=2.19; 95% CI: 1.52 to 3.14), patients with moderate motor disabilities (AOR=1.98; 95% CI: 1.49 to 2.61), patients with significant motor disabilities (AOR=1.26; 95% CI: 1.01 to 1.57) and patients younger than 82 with severe motor disabilities (AOR=1.43; 95% CI: 1.25 to 1.64). IRF patients with significant and severe motor disabilities achieved greater motor function of 2 or more FIM units compared with rehabilitation SNF patients. Medicare Part A payments for IRFs were higher than rehabilitation SNF payments across all subgroups.

CONCLUSIONS

For most patients, poststroke rehabilitation in the more costly and intensive IRFs resulted in higher functional outcomes compared with care in a SNF-based rehabilitation program. IRF and SNF outcomes were similar for patients with minimal motor disabilities and patients with mild motor disabilities and significant cognitive disabilities. Cost-effectiveness analyses require considering the costs of the full episode of care.

Early Effects of the Prospective Payment System on Inpatient Rehabilitation Hospital Performance

OBJECTIVE

To assess changes in utilization and financial performance for inpatient rehabilitation facilities (IRFs) that shifted from Medicare's cost-based payment system to the IRF prospective payment system (PPS).

DESIGN

A pre-post nonequivalent comparison group design. The intervention group included IRFs that changed to the PPS in fiscal year 2002. The comparison group included IRFs that were paid under the cost-based system.

SETTING

IRFs in the United States.

PARTICIPANTS

Final sample included 120 IRFs, with 26 IRFs in the comparison sample.

INTERVENTIONS

Not applicable.

MAIN OUTCOME MEASURES

Outcome measures included utilization (length of stay [LOS], total discharges, Medicare discharges) and financial performance (revenue, expenses, profitability, Medicare payment and cost).

RESULTS

PPS IRFs experienced a smaller decline in LOS, whereas Medicare cost per discharge increased at a lower rate. PPS IRFs reduced operating costs per discharge, whereas profit margin had a greater increase.

CONCLUSIONS

IRFs under PPS implemented cost controls that lead to lower operating costs below the fixed payment to profit under PPS. Discharge growth for PPS IRFs was similar to the comparison group. PPS facilities did not implement a strategy that attempted to admit more patients to increase Medicare payments.

Rehabilitation services after the implementation of the nursing home prospective payment system: differences related to patient and nursing home characteristics

BACKGROUND

The prospective payment system (PPS) for nursing homes was designed to curtail the rapid expansion of Medicare costs for skilled nursing care. This study examines the changes that occurred in nursing home patients and rehabilitation services following the PPS.

SETTING

Free-standing Medicare and/or Medicaid certified nursing homes in Ohio.

PRIMARY OUTCOMES

The percent of new admissions receiving therapy and the amount of rehabilitation therapy provided.

SAMPLE

A total of 7006 first admissions in 1994-6 (pre-PPS) and 61,569 first admissions in 2000-1 (post-PPS).

METHODS

A logistic model predicting likelihood of rehabilitation was developed and validated in pre-PPS admissions and applied to the post-PPS patients. Rehabilitation services were compared in the pre-PPS and post-PPS cohorts overall, stratified by quintile of predicted score, diagnosis group, and by nursing home profit status.

RESULTS

Post-PPS patients had less cognitive impairment, more depression, and more family support. The amount of rehabilitation services declined the most in the higher quintiles of predicted likelihood of rehabilitation and among patients with stroke. The percent of patients receiving rehabilitation services increased the most in the lowest quintile and among patients with medical conditions. These changes were greater in for-profit nursing homes.

CONCLUSIONS

The implementation of the PPS in nursing homes has been associated with a decrease in the amount of rehabilitation services, targeted at those predicted to receive higher amounts and an increased frequency of providing services targeted at those predicted to be less likely to receive them. The outcomes of the changes deserve further study.

What happens when hospital-based skilled nursing facilities close? A propensity score analysis

OBJECTIVE

To assess the effects of hospital-based skilled nursing facility (HBSNF) closures on health care utilization, spending, and outcomes among Medicare fee-for-service beneficiaries.

DATA SOURCES

One hundred percent Medicare fee-for-service claims files for 1997-2002 were merged with Medicare Provider of Services files and beneficiary-level enrollment records.

STUDY DESIGN

Medicare spending, the use of postacute care, and health outcomes, were compared among hospitals that did and did not close their HBSNFs between 1997 and 2001. Hospitals were stratified according to propensity scores (i.e., predicted probability of closure from a logistic regression) and analyses were conducted within these strata.

PRINCIPAL FINDINGS

HBSNF closures were associated with increased utilization of alternative postacute care settings, and longer acute care hospital stays. Because of increased use of alternative settings, HBSNF closures were associated with a slight increase in total Medicare spending. There are no statistically robust associations between HBSNF closures and changes in either mortality or rehospitalization.

CONCLUSIONS

HBSNF closures altered utilization patterns, but there is no indication that closures adversely affect beneficiaries' health outcomes.

Outcomes and reimbursement of inpatient rehabilitation facilities and subacute rehabilitation programs for Medicare beneficiaries with hip fracture

OBJECTIVE

We sought to assess whether outcomes and reimbursement differ for Medicare beneficiaries with hip fracture when treated in an inpatient rehabilitation facility (IRF) compared with a skilled nursing facility (SNF) subacute rehabilitation program.

PARTICIPANTS

Clinical data were linked with Medicare claims for 29,793 Medicare fee-for-service beneficiaries with a recent hip fracture who completed treatment in 1996 or 1997 in rehabilitation facilities that subscribed to the Uniform Data System for Medical Rehabilitation.

OUTCOME MEASURES

We measured discharge destination, change in motor FIM rating, and Medicare Part A reimbursement.

RESULTS

For patients with moderate-to-severe and severe disabilities, case mix groups (CMGs) 704 and 705, the percentage of patients discharged to the community from IRFs was lower than for patients treated in subacute rehabilitation SNFs, after controlling for covariates. Adjusted odds ratios were 0.71 (95% confidence interval 0.55-0.92) for CMG 704 and 0.72 (95% confidence interval 0.63-0.83) for CMG 705. For patients in the 3 other CMGs, no significant differences were detected. Improvement in motor functional status was roughly equivalent for patients treated in IRFs and those treated in the subacute rehabilitation programs across all 5 CMGs, after controlling for covariates. Medicare Part A payments for IRFs were significantly higher than SNF payments across all CMGs.

CONCLUSION

SNF-based subacute rehabilitation was less costly and outcomes were in most, but not all, instances similar or better than IRF-based rehabilitation for Medicare fee-for-service beneficiaries who had a recent hip fracture.

Cost-effectiveness of recommended nurse staffing levels for short-stay skilled nursing facility patients

Background

Among patients in skilled nursing facilities for post-acute care, increased registered nurse, total licensed staff, and nurse assistant staffing is associated with a decreased rate of hospital transfer for selected diagnoses. However, the cost-effectiveness of increasing staffing to recommended levels is unknown.

Methods

Using a Markov cohort simulation, we estimated the incremental cost-effectiveness of recommended staffing versus median staffing in patients admitted to skilled nursing facilities for post-acute care. The outcomes of interest were life expectancy, quality-adjusted life expectancy, and incremental cost-effectiveness.

Results

The incremental cost-effectiveness of recommended staffing versus median staffing was $321,000 per discounted quality-adjusted life year gained. One-way sensitivity analyses demonstrated that the cost-effectiveness ratio was most sensitive to the likelihood of acute hospitalization from the nursing home. The cost-effectiveness ratio was also sensitive to the rapidity with which patients in the recommended staffing scenario recovered health-related quality of life as compared to the median staffing scenario. The cost-effectiveness ratio was not sensitive to other parameters.

Conclusion

Adopting recommended nurse staffing for short-stay nursing home patients cannot be justified on the basis of decreased hospital transfer rates alone, except in facilities with high baseline hospital transfer rates. Increasing nurse staffing would be justified if health-related quality of life of nursing home patients improved substantially from greater nurse and nurse assistant presence.