Changes in the Use of Postacute Care during the Initial Medicare Payment Reforms

Abstract

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.Key Words. Postacute care, skilled nursing facility, rehabilitation, home health care, Balanced Budget Act Medicare postacute care (PAC) services provide recuperative or rehabilitative services to patients discharged from acute-care hospitals. As hospital length of stays shortened considerably after the hospital prospective payment system implemented in 1983, these services became a critical transition in the continuum of care for elderly patients. These services--mainly skilled nursing In response to such dramatic increases and with widespread administrative and legislative concerns about possible fraud and abuse by providers, both regulators and legislators devoted considerable attention to PAC services in the mid-1990s. Regulators aggressively pursued potential fraud and abuse, particularly in HHAs, whereas Congress mandated payment reforms in the Balanced Budget Act of 1997. These regulatory compliance initiatives and the sequential implementation of payment reforms had the potential to lead to reimbursementdriven substitution between settings without regard to the appropriateness of care. Nevertheless, most studies of PAC payment reforms have focused on each setting in isolation, with little investigation of how they might be used interchangeably. To our knowledge, no analyses have simultaneously considered all three major PAC settings across years and used multivariate methods to control for variables affecting their use. Using such an approach, we examined how usage shifted among PAC settings as payment reforms introduced new financial incentives.

Bouncing-Back: Rehospitalization in Patients with Complicated Transitions in the First Thirty Days After Hospital Discharge for Acute Stroke

“…However, this "interchangeability" concept remains controversial. Previous studies utilizing Medicare administrative data have supported the idea of interchangeability by noting that the choice of post-acute care service type depends more on region, availability and reimbursement form than on other factors (Buntin, Garten, Paddock, Saliba, Totten & Escarce, 2005, Kane, Lin & Blewett, 2002, Lin, Kane, Mehr, Madsen & Petroski, 2006. However, a number of stroke specific studies have found inpatient rehabilitation to result in superior patient outcomes when compared to other post-acute care settings (Deutsch, Granger, Heinemann, Fiedler, DeJong, Kane, Ottenbacher, Naughton & Trevisan, 2006, Kind, et al, 2006, Kramer, Steiner, Schlenker, Eilertsen, Hrincevich, Tropea, Ahmad & Eckhoff, 1997.…”

Patient and Hospitalization Characteristics Associated With Increased Postacute Care Facility Discharges From US Hospitals

“…Since discharges to skilled nursing facilities initially decreased in Medicare patients in response to payment reforms, it is possible that PAC facilities have increasingly attracted other payors to supplement revenue, and this would have important implications for national policy and health care reform. Prior analyses were also limited to Medicare patients with selected diagnoses, 5,11 and we sought to extend these analyses by evaluating trends in other age groups and in other diagnostic groups. Nationally-representative trends in patients being discharged to PAC facilities after discharge may also provide normative data to providers and hospital systems for comparison with their local discharge practices.…”

“…Previous studies demonstrated important shifts in the use of one type of post-acute care (home health, skilled nursing, or inpatient rehabilitation) to another in response to payment reforms, suggesting that for many patients one type of PAC was substituted for another. 5,11 However, substitution of skilled nursing or inpatient rehabilitation care for inpatient hospital care has not been examined. We hypothesize that diagnostic groups in which hospital length of stay is decreasing most would be accompanied by the greatest increases in discharges to PAC facilities.…”

Trends in Postacute Care and Staffing in US Nursing Homes, 2001–2010

“…1 Then, during the late 1990s and early 2000s, the introduction of a prospective payment system (PPS) and other Medicare postacute care payment reforms resulted first in an increased use of Medicare-paid skilled nursing facility (SNF) care and then a decreased use of this care. 2,3 Provision of postacute care in nursing homes has not been well documented, especially in recent years. It also remains unclear whether nursing homes have increased staff-to-resident ratios to meet the escalating needs of postacute patients.…”