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.     

Prospective payment for acute care: impact on rehabilitation hospitals

This study assessed rehabilitation workers' perceptions of acute care Medicare prospective payment effects on rehabilitation hospitals and units. Members of four groups--physicians, nurses, social workers, and administrators--were asked to complete a survey of prospective payment effects. All survey participants worked at one of the 373 DRG-exempt rehabilitation hospitals in 46 states that have similar prospective payment systems. A total of 761 persons (60% of the eligible sample) responded with complete answers. Across all groups, respondents reported increases in the frequency of acute illness, as well as increases in complications and readmission into acute care. An increase in the number of referrals for inpatient rehabilitation was also reported, although only minimal changes in the length of rehabilitation stay were perceived. Individuals at rehabilitation hospitals perceived a greater increase in complication and readmission rate and acute illness, whereas individuals at rehabilitation units perceived a greater increase in referrals. Differences among members of the four disciplines were small, with social workers reporting the largest increase in complications and readmission to acute care hospitals, as well as in referrals for inpatient rehabilitation. Implications of these findings for rehabilitation hospitals and units are discussed.     

Impact of Medicare prospective payment system on acute rehabilitation outcomes of patients with spinal cord injury

Qu H, Shewchuk RM, Chen Y, Deutsch A. Impact of Medicare prospective payment system on acute rehabilitation outcomes of patients with spinal cord injury.

Objective

To examine the impact of Medicare's inpatient rehabilitation facility (IRF) prospective payment system (PPS) on inpatient rehabilitation outcomes for patients with traumatic spinal cord injury (SCI).

Design

Retrospective study.

Setting

Twelve SCI Model Systems.

Participants

A sample of Medicare (n=296) and non-Medicare (n=3110) patients was selected from the National SCI Statistical Center Database from 1996 to 2006.

Interventions

Not applicable.

Main Outcome Measures

Motor FIM score change and length of stay (LOS).

Results

LOS decreased by about 5.8 days a year (P<.001) for Medicare patients and about 1.3 days a year (P=.031) for non-Medicare patients after PPS implementation. However, for both groups, FIM score gains were not significantly different in the pre-PPS and PPS periods.

Conclusions

Although significant decreases in LOS were observed for Medicare patients after IRF PPS implementation, Medicare patients' improvements in motor function did not decrease. Non-Medicare patients with SCI also experienced shortened stays after Medicare IRF PPS implementation, but had equivalent FIM score gains compared with their counterparts who received inpatient rehabilitation care before PPS implementation. IRF PPS implementation was associated with shorter stays, but was not associated with lower functional improvement.     

Modifications of the FIM instrument under the inpatient rehabilitation facility prospective payment system

OBJECTIVES: To describe the modifications made to the FIM instrument when it was incorporated into the Inpatient Rehabilitation Facility-Patient Assessment Instrument (IRF-PAI), and to compare FIM data collected before and after the IRF prospective payment system (IRF-PPS) was implemented in 2002 for patients with stroke. DESIGN: Year-by-year comparison of data of Medicare patients with stroke discharged in 1998-2003 from 411 IRFs that submitted data to the Uniform Data System for Medical Rehabilitation for each of those years. RESULTS: In the pre-PPS period, admission motor FIM ratings decreased slightly, and discharge motor, admission cognitive, and discharge cognitive ratings remained stable. Between 2001 and 2003, all four ratings decreased: admission motor by 1.8 FIM units, discharge motor by 3.3 FIM units, and admission and discharge cognitive each by 1.0 FIM unit. The lower admission FIM ratings led to an increase in the mean case-mix index from 1.39 to 1.49. CONCLUSIONS: The decrease in FIM ratings in the IRF-PAI/PPS years may reflect alterations in coding practices as a result of changed rules for rating the FIM instrument, "downcoding" leading to assignment into higher-paying categories, changes in the IRF patient population, and/or changes in IRF patient outcomes. Coding changes should be considered when comparing pre-PPS and PPS FIM data.     

Client characteristics and the cost of home care in the prospective payment system

There has been much speculation in the literature about the effect of the prospective payment system (PPS) on the home care industry but few reports of systematic investigation. Clearly, comprehension of client characteristics is essential for categorizing home care clients into the correct Home Health Resource Groups, for allocating resources appropriately, and for implementing necessary organizational changes to accommodate clients who require variations in the amount of resources predicted by the PPS. The purposes of this study were to compare the characteristics of home health clients that resulted in a financial gain or a financial loss for one agency under the PPS with those of the interim payment system. A secondary data analysis of 140 cases compiled by one not-for-profit hospital-affiliated home care organization was completed. Results suggested that client characteristics of the projected loss group had more recertifications on admission and at the end of the 60-day episode, a longer stay (3 weeks), and more visits, particularly from skilled nursing. Comprehension of client characteristics and the subsequent ability to adjust for the proper case mix will be crucial if home care agencies are to remain financially viable under the PPS. Replication of this project needs to be done using more variables and multiple sites.     

Prospective payment for rehabilitation: effects on hospital readmission, home care, and placement

Suspected benefits of a prospective payment system (PPS) in which hospitals are paid by diagnosis-related groups (DRGs) are that hospital lengths of stay and costs may be reduced. The US Department of Veterans Affairs is one of the first agencies to adopt PPS funding for rehabilitation; this early adoption of PPS provides a unique opportunity to test for both beneficial and adverse outcomes. This study compared hospital stay, readmission rate, and incidence of nursing home placement before and after introduction of PPS on a 22-bed rehabilitation service. Hospital stay decreased from 29.3 days to 26.4 days, but 64% more patients were discharged to nursing homes. Findings suggest that PPS may overlook home care in favor of placement, which neutralizes the cost benefits of the proposed reimbursement system. Further research on the effects of PPS is needed to determine (1) impact on clinical aspects of rehabilitation and (2) whether other funding mechanisms are more appropriate.     

The impact of the inpatient rehabilitation facility prospective payment system on stroke program outcomes

OBJECTIVE: To examine the impact of the Medicare inpatient rehabilitation facility (IRF) prospective payment system (PPS) on outcomes in a stroke rehabilitation program. DESIGN: An analysis was performed on a database including 945 stroke patients admitted to an inpatient stroke rehabilitation program 5 yrs before implementation of the IRF PPS and 3.5 yrs after implementation. Patients were classified with regard to stroke location (left vs. right), level of cognitive impairment, presence/absence of unilateral neglect, and level of depressive symptomatology. Functional status was evaluated at time of admission and discharge by functional independence measure (FIM). Other outcome measures included length of stay (LOS) and discharge destination. The impact of IRF PPS on LOS, progress in rehabilitation, and discharge destination was examined via univariate analyses of covariance and logistic regression. RESULTS: Patients admitted after implementation of the IRF PPS had shorter LOS but made less progress, had lower functional levels at discharge, and had higher rates of institutional discharge. CONCLUSIONS: Although associated with decreased LOS, implementation of the IRF PPS was associated with decreased functional gains, lower discharge FIM levels, and higher rates of institutional discharge. Cost savings associated with the PPS must be considered in light of these untoward outcomes.     

Change in inpatient rehabilitation admissions for individuals with traumatic brain injury after implementation of the medicare inpatient rehabilitation facility prospective payment system

Hoffman JM, Donoso Brown E, Chan L, Dikmen S, Temkin N, Bell KR. Change in inpatient rehabilitation admissions for individuals with traumatic brain injury after implementation of the Medicare inpatient rehabilitation facility prospective payment system.ObjectiveTo evaluate the impact of Medicare's inpatient rehabilitation facility (IRF) prospective payment system (PPS) on use of inpatient rehabilitation for individuals with traumatic brain injury (TBI).DesignRetrospective cohort study of patients with TBI.SettingOne hundred twenty-three level I and II trauma centers across the U.S. who contributed data to the National Trauma Data Bank.ParticipantsPatients (N=135,842) with TBI and an Abbreviated Injury Score of the head of 2 or greater admitted to trauma centers between 1995 and 2004.InterventionsNone.Main Outcome MeasureDischarge location: IRF, skilled nursing facility, home, and other hospitals.ResultsCompared with inpatient rehabilitation admissions before IRF PPS came into effect, demographic characteristics of admitted patients changed. Those admitted to acute care trauma centers after PPS was enacted (January 2002) were older and nonwhite. No differences were found in rates of injury between men and women. Over time, there was a significant drop in the percent of patients being discharged to inpatient rehabilitation, which varied by region, but was found across all insurance types. In a logistic regression, after controlling for patient characteristics (age, sex, race), injury characteristics (cause, severity), insurance type, and facility, the odds of being discharged to an IRF after a TBI decreased 16% after Medicare's IRF PPS system was enacted.ConclusionsThe enactment of the Medicare PPS appears to be associated with a reduction in the chance that patients receive inpatient rehabilitation treatment after a TBI. The impact of these changes on the cost, quality of care, and patient outcome is unknown and should be addressed in future studies.     

Potential impact of the new medicare prospective payment system on reimbursement for traumatic brain injury inpatient rehabilitation

OBJECTIVE: To evaluate the potential impact of the new Medicare prospective payment system (PPS) on traumatic brain injury (TBI) rehabilitation. DESIGN: Retrospective cohort study of patients with TBI. Patients were assigned to their appropriate case-mix group (CMG) based on Medicare criteria. SETTING: Fourteen urban rehabilitation facilities throughout the United States. PARTICIPANTS: Patients with TBI admitted to inpatient rehabilitation and enrolled in the Traumatic Brain Injury Model Systems from 1998 to 2001 (N=1807). INTERVENTIONS: Not applicable. MAIN OUTCOME MEASURES: Cost of inpatient rehabilitation admission, length of stay (LOS), and functional outcomes. RESULTS: The median cost of inpatient rehabilitation for patients with TBI exceeded median PPS payments for all TBI CMGs by 16%. Only 3 of the 14 hospitals received reimbursement under PPS that exceeded costs for their TBI patients. CONCLUSIONS: Compared with current costs, the new Medicare payment system may reimburse facilities significantly less than their costs for the treatment of TBI. To maintain their current financial status, facilities may have to reduce LOS and/or reduce resource use. With a decreased LOS, inpatient rehabilitation services will have to improve FIM efficiency or discharge patients with lower discharge FIM scores.     

Health economics analysis of prospective payment systems in medical rehabilitation

The forthcoming introduction of the DRG-system as a new hospital funding system in Germany reinforced the discussion about a reform of the already existing funding system in medical rehabilitation. Experience and concepts from acute medicine, however, cannot be transferred directly to rehabilitation. The development of a patient classification system is a presupposition for prospective payment systems. Initial attempts in rehabilitation-specific patient classification systems already exist, even though a comprehensive approach is not yet noticeable. International patient classification systems scarcely seem to be transferable due to the specific German case-mix. The specific differences between acute medicine and medical rehabilitation relevant for the valuation of funding systems are analyzed. Particularly a reduction of the length of stay as a primary aim for the introduction of the DRG-system does not seem appropriate for medical rehabilitation. The existing funding system in medical rehabilitation is analyzed from an economic point of view. The cost management of the German pension insurance, being one of the rehabilitation providers in Germany, has achieved high quality standard of treatment as well as cost restriction. This funding system has been further developed during the last couple of years. Future developments are shown.     

Redesigning for success: managing the prospective payment system

Managed care and the new Medicare prospective pay system are dramatically changing the way home health agencies conduct their business. Agencies are busy downsizing, streamlining, and looking for creative ways to do more with less. Many industries have found success with process reengineering, the concepts of which are outlined in this article so that agencies may adapt them to "recreate" themselves. Practical measures are demonstrated through the steps one large home health agency has taken to address these issues.     

Clinical implications of prospective payment in home health care

Now that the final regulations governing the prospective payment system (PPS) for home health care have been published in the Federal Register (vol. 65, no. 128, July 3, 2000, rules and regulations, p. 41,228), home health agencies (HHAs) can begin to finalize their plans to operate efficiently under PPS. Although an undercurrent of optimism already is appreciated in response to the PPS, agency survival will hinge on fully understanding prospective pay and the data on which it is based.     

The use of physical restraints in an acute care hospital

To fill the knownledge gap on the extension and quality of physical restraints in acute care hospitals a survey aiming at evaluating knowledge, opinions and behaviours of nurses in this area of care was performed. A questionnaire administered to the nurses of a large Italian hospital obtained a response rate of 66.2% (227 nurses) and the situation of 77 patients (15.8% of admitted patients) hospitalised and constrained in the target wards was reported. The physical restraints were widely used in intensive care and medical specialty wards (bed rails and limbs constraints). The main reasons for restraining the patients were: disorientation, agitation, aggressiveness, and balance disturbances. The application of constraints is an autonomous of the nurses decision in 60.8% of cases and the information is seldom reported in clinical or nursing records. Fifty-two per cent of nurses feel uneasy in constraining patients because of the relational implications with relatives. Lack of knowledge on ethical and legal implications and on the possible negative effects of constraining patients, on the different forms of constriction and on alternative strategies warrant an educational intervention to control and improve the implementation of physical measures of containment.     

An evaluation of the impact of the prospective payment system on antidepressant use in nursing home residents

OBJECTIVES: To determine the impact of the prospective payment system (PPS) for skilled nursing facilities on the pharmacologic treatment of depression. METHODS: We used a quasi-experimental study comparing the pharmacological treatment rates for depression in the pre-PPS period (1997) to the post-PPS period (2000) in 8149 residents with documented depression living in over 500 nursing facilities in Ohio. Logistic regression models adjusting for clustering effects of residents residing in homes using generalized estimating equations provided estimates of the PPS effect on use of any antidepressant and the use of selective serotonin reuptake inhibitors (SSRIs). We evaluated the extent to which the PPS effect was modified by organizational characteristics, including structural characteristics, resource characteristics, and staff resources available in the homes. RESULTS: Overall, there was no difference in the likelihood of any antidepressant [odds ratio (OR), 1.05; 95% confidence interval (CI), 0.93 to 1.18, resident-adjusted model] or an SSRI being used (OR, 0.98; 95% CI, 0.86 to 1.12, resident-adjusted model) after the introduction of PPS compared with 1997 when this reimbursement system was not in place (referent group). These trends did not appear to be modified substantially by organizational characteristics. CONCLUSION: Although PPS did not appear to have influenced the treatment of depression in nursing homes, systems that provide checks and balances in relation to PPS are warranted.     

The acute care for elders unit: taking the rehabilitation model into the hospital setting.

Older Americans are living longer than ever before. Those over the age of 65 years account for almost 13% of the population and one third of all hospitalizations. Older adults are much more likely than younger adults to develop complications during hospitalization. With the increasing number of older adults at higher risk of hospitalization, it is more important than ever to study and develop ways to minimize the cascade of dependency that can occur during hospitalization. The Acute Care for Elders unit model has been shown to improve the processes of hospital care, discharge outcomes, and the prevention of functional limitations for the acutely ill older adult.