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

Health Affairs

Volumn 22, Issue 3, 2003, Pages 214-223

  White, Chapin ^a  

^a NATIONAL BUREAU OF ECONOMIC RESEARCH   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

AGED; ARTICLE; BUDGET; CLASSIFICATION; DIAGNOSIS RELATED GROUP; ECONOMICS; EVALUATION; GOVERNMENT; HUMAN; INTENSIVE CARE; LEGAL ASPECT; MEDICARE; NURSING HOME; PROSPECTIVE PAYMENT; REHABILITATION; UNITED STATES;

AGED; BUDGETS; DIAGNOSIS-RELATED GROUPS; HUMANS; MEDICARE; PROSPECTIVE PAYMENT SYSTEM; REHABILITATION; SKILLED NURSING FACILITIES; SUBACUTE CARE; UNITED STATES; UNITED STATES CENTERS FOR MEDICARE AND MEDICAID SERVICES;

EID: 0037711351     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.22.3.214     Document Type: Article

References (19)

1. National Center for Health Statistics, Health, United States, 2001 (Hyattsville, Md: U.S. Public Health Service, 2001).
2. Author's calculations from MEDPAR SNF claims matched to MEDPAR short-stay hospital claims for 1997 through 2000.
3. U.S. General Accounting Office, Medicare: Home Health Utilisation Expands while Program Controls Deteriorate, Pub. no. GAO/HEHS-96-16 (Washington: GAO, March 1996).
4. Data on SNF use and costs are from Committee on Ways and Means, U.S. House of Representatives, Green Book Background Material and Data on Programs within the Jurisdiction of the Committee on Ways and Means (Washington: House of Representatives, 6 October 2000).
5. Data on the Consumer Price Index are from Bureau of Labor Statistics, "Consumer Price Index - All Urban Consumers," June 2002, www.bls.gov/data (5 August 2002).
6. U.S. Department of Health and Human Services, "Medicare Program: Prospective Payment System and Consolidated Billing for Skilled Nursing Faculties; Final Rule," Federal Register (12 May 1998): 26098-26147.
7. Medicare Payment Advisory Commission, Report to the Congress: Medicare Payment Policy (Washington: MedPAC, March 2002).
8. B.E. Fries et al., "Refining a Case-Mix Measure for Nursing Homes: Resource Utilization Groups (RUG-III)," Medical Care 32, no. 7 (1994): 668-685.
9. The nonrehabilitation categories are "Extensive Services," "Special Care," "Clinically Complex," "Impaired Cognition," "Behavior Only," and "Physical Function Reduced."
10. Author's calculations based on the universe of MDS-2.0 Medicare five-day assessments from June 1998 through December 2000.
11. The cost per minute of rehab therapy is calculated by dividing total minutes of therapy (from MDS-2.0 five-day assessments) by total costs of therapy (equal to therapy charges discounted by a cost-to-charge ratio). Because MDS-2.0 assessments are only available for June 1998 through December 2000, the cost per minute as calculated reflects costs for the post-PPS period. For the purposes of the illustration, these costs are suitable (although pre-PPS costs per minute would be preferable).
12. Note that $4.19 = ($238.87-$179.01)/[(200-100)/7], and $2.15 = ($238.87-$177.36)/(200/7).
13. Bureau of Labor Statistics, "Producer Price Index Revision - Current Series, General Medical and Surgical Hospitals," 2002, www.bls.gov/data (12 September 2002).
14. The methods used to create the data set are described fully in a Technical Appendix available at www.people.fas.harvard.edu/-cdwhite/ Chapin_White.home.html.
15. To select the cutoffs, the minutes per day required to qualify for each rehabilitation group were multiplied by $1.80 per minute and rounded off. The charge per day categories correspond roughly to the RUG-III rehabilitation categories as follows: $0-$10 does not qualify for a rehabilitation category; $10-$80 qualifies for low or medium rehabilitation; $80-$200 qualifies for high or very high rehabilitation; $200+ qualifies for ultra high rehabilitation.
16. Based on the author's calculations.
17. MedPAC, Report to the Congress: Medicare Payment Policy,
18. and GAO, Skilled Nursing Facilities: Medicare Payments Need to Better Account for Nontherapy Ancillary Cost Variation, Pub. no. GAO/HEHS-99-185 (Washington: GAO, 30 September 1999).
19. Based on the author's calculations.