Effect of the Medicare prospective payment system on the utilization of physical therapy

The purpose of this study was to examine the effect of the Medicare prospective payment system on the utilization of physical therapy for patients served by Medicare. The total number of inpatient and outpatient physical therapy referrals and the percentage of physical therapy Medicare referrals from January 1981 through May 1985 for the 336 acute care beds in the county selected for this study were analyzed. The results indicated that acute care inpatient and outpatient physical therapy Medicare referrals have increased significantly since the implementation of the diagnostic related group system. The results indicate that physical therapy is being used increasingly to rehabilitate patients within the time and economic constraints established by the Medicare prospective payment system.