Prospective Payment

14,000,000 Leading Edge Experts on the ideXlab platform

Scan Science and Technology

Contact Leading Edge Experts & Companies

Scan Science and Technology

Contact Leading Edge Experts & Companies

The Experts below are selected from a list of 5031 Experts worldwide ranked by ideXlab platform

Hhs Centers For Medicare Medicaid Services - One of the best experts on this subject based on the ideXlab platform.

Jose J Escarce - One of the best experts on this subject based on the ideXlab platform.

  • effects of medicare Payment reform evidence from the home health interim and Prospective Payment systems
    Journal of Health Economics, 2014
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    Medicare continues to implement Payment reforms that shift reimbursement from fee-for-service toward episode-based Payment, affecting average and marginal Payment. We contrast the effects of two reforms for home health agencies. The home health interim Payment system in 1997 lowered both types of Payment; our conceptual model predicts a decline in the likelihood of use and costs, both of which we find. The home health Prospective Payment system in 2000 raised average but lowered marginal Payment with theoretically ambiguous effects; we find a modest increase in use and costs. We find little substantive effect of either policy on readmissions or mortality.

  • the effect of Prospective Payment on admission and treatment policy evidence from inpatient rehabilitation facilities
    Journal of Health Economics, 2013
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    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.

  • effects of medicare Payment reform evidence from the home health interim and Prospective Payment systems
    2012
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    Medicare continues to implement Payment reforms that shift reimbursement from fee-for-service towards episode-based Payment, affecting average and marginal reimbursement. We contrast the effects of two reforms for home health agencies. The Home Health Interim Payment System in 1997 lowered both types of reimbursement; our conceptual model predicts a decline in the likelihood of use and costs, both of which we find. The Home Health Prospective Payment System in 2000 raised average but lowered marginal reimbursement with theoretically ambiguous effects; we find a modest increase in use and costs. We find little substantive effect of either policy on readmissions or mortality.

  • the effect of Prospective Payment on admission and treatment policy evidence from inpatient rehabilitation facilities
    Social Science Research Network, 2011
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    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 total number of patients admitted, admitting different types of patients, or changing the intensity of care for admitted patients. We use Medicare claims data to separately estimate each type of provider response to the PPS. 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 implementation, which we attribute to changes in treatment decisions rather than the types of patients admitted to IRFs. However, the probability of admission to IRFs increased after the PPS due to the expanded admission policies of providers. We find modest spillover effects on skilled nursing home costs and no substantive impact on patient health outcomes.

  • effects of competition on the cost and quality of inpatient rehabilitation care under Prospective Payment
    Health Services Research, 2010
    Co-Authors: Carrie H Colla, Melinda Beeuwkes Buntin, Jose J Escarce, Neeraj Sood
    Abstract:

    Every year millions of Medicare beneficiaries are discharged from acute care hospitals into institutional postacute care (PAC) in inpatient rehabilitation facilities (IRFs), skilled nursing facilities (SNFs), and long-term care hospitals (LTCHs). Each of these institutional settings offers a different level of care. IRFs provide the most intensive care rehabilitation care (3 or more hours a day of rehabilitation therapy). SNFs can also provide inpatient rehabilitation under the Medicare benefit, although it is generally less intensive than that provided in IRFs (Gage 1999). From 1988 to 1997, Medicare expenditures for PAC grew at an average annual rate of 25 percent, making it the fastest-growing category of Medicare spending [Medicare Payment Advisory Commission (MedPAC) 2003]. Congress responded by mandating Prospective Payment for PAC providers. Between 1998 and 2002, Medicare introduced Prospective Payment systems (PPSs) for SNFs (1998), HHAs (2000), IRFs (2002), and LTCHs (2002). The IRF PPS uses per discharge Payments to provide incentives for limiting costs per rehabilitation stay. Payment amounts are based on patient categories defined by the patient's rehabilitation impairment (e.g., stroke, hip fracture), functional status, and comorbidities (Carter et al. 2002). The new Payment systems blunted the rate of growth in Medicare expenditures for PAC, although these expenditures continued to rise steadily and now account for about 11 percent of total Medicare spending (Buntin, Colla, and Escarce 2009; MedPAC 2009;). Researchers have examined the effect of the new Payment systems in PAC on resource use and quality and outcomes of care. Early studies found small decreases in SNF utilization, accompanied by increases in the use of other PAC providers, after implementation of the PPS for SNFs (Angelelli et al. 2002; McCall et al. 2003; MedPAC 2003; Buntin et al. 2009;). Rates of adverse outcomes, including acute care readmissions and mortality, did not change (Angelelli et al. 2002; McCall et al. 2003;). By contrast, a later analysis found worsening of certain SNF outcomes between 2000 and 2004, and other studies have found declines in staffing and the intensity of services (Yip, Wilber, and Myrtle 2002; White 2003, 2005; Wodchis, Fries, and Hirth 2004; Murray et al. 2005; MedPAC 2006). Most recently, a study of 120 IRFs found that these facilities reduced costs per discharge during the first year of the IRF PPS (McCue and Thompson 2006). In a national study, Sood, Buntin, and Escarce (2008) found that implementation of the IRF PPS led to sizable declines in costs and length of stay, especially among facilities that had higher Payment limits under the preexisting Payment system, but patients' rates of return to the community and mortality were unaffected. The Payment system is not the only economic factor that affects resource use and quality of care among health care providers. An extensive body of research on acute care hospitals has shown that market structure, especially the degree of competition, matters as well. Studies of acute care hospitals, moreover, have found that the effects of competition on costs and quality depend on the way providers are paid and how prices for their services are set (e.g., Robinson and Luft 1985; Zwanziger and Melnick 1988; Keeler, Melnick, and Zwanziger 1999; Kessler and McClellan 2000; Mukamel, Zwanziger, and Tomaszewski 2001; Bundorf et al. 2004; Escarce, Jain, and Rogowski 2006; Rogowski, Jain, and Escarce 2007;). For instance, competition increased costs under cost-based reimbursement, whereas it decreased costs under selective contracting based on prices. Much less is known about the effects of competition in PAC markets. Further, the available research has focused on long-term care services provided in nursing homes, rather than on PAC. Studies conducted in the 1990s found that higher competition among nursing homes was associated with better structural and process quality and with adoption of total quality management (Zinn 1994; Zinn, Weech, and Brannon 1998;). Similarly, recent studies indicate that higher competition is associated with higher scores on the quality measures reported on the Centers for Medicare and Medicaid Services Nursing Home Compare Website (Zinn et al. 1998; Starkey, Weech-Maldonado, and Mor 2005; Castle, Engberg, and Liu 2007; Castle, Liu, and Engberg 2008; Centers for Medicare and Medicaid Services 2009;). To our knowledge, no study has assessed the impact of competition on the cost and quality of PAC under the recently implemented PPSs. To begin to address this gap in the literature, the current study examines the effect of competition in institutional PAC markets on resource use and health outcomes for patients who received PAC in IRFs, the most intensive setting for postacute rehabilitation care, during the first 18 months after Prospective Payment went into effect. The study focuses on patients discharged from an acute care hospital after a stroke or hip fracture, two of the conditions that most often receive institutional PAC. The empirical analyses incorporate two noteworthy innovations. First, we construct a measure of the competition facing each IRF that accounts for the fact that SNFs may be viable substitutes for IRFs in many clinical situations. Second, we use instrumental variables estimation to account for the likely endogeneity of competition.

Neeraj Sood - One of the best experts on this subject based on the ideXlab platform.

  • effects of medicare Payment reform evidence from the home health interim and Prospective Payment systems
    Journal of Health Economics, 2014
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    Medicare continues to implement Payment reforms that shift reimbursement from fee-for-service toward episode-based Payment, affecting average and marginal Payment. We contrast the effects of two reforms for home health agencies. The home health interim Payment system in 1997 lowered both types of Payment; our conceptual model predicts a decline in the likelihood of use and costs, both of which we find. The home health Prospective Payment system in 2000 raised average but lowered marginal Payment with theoretically ambiguous effects; we find a modest increase in use and costs. We find little substantive effect of either policy on readmissions or mortality.

  • the effect of Prospective Payment on admission and treatment policy evidence from inpatient rehabilitation facilities
    Journal of Health Economics, 2013
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    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.

  • effects of medicare Payment reform evidence from the home health interim and Prospective Payment systems
    2012
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    Medicare continues to implement Payment reforms that shift reimbursement from fee-for-service towards episode-based Payment, affecting average and marginal reimbursement. We contrast the effects of two reforms for home health agencies. The Home Health Interim Payment System in 1997 lowered both types of reimbursement; our conceptual model predicts a decline in the likelihood of use and costs, both of which we find. The Home Health Prospective Payment System in 2000 raised average but lowered marginal reimbursement with theoretically ambiguous effects; we find a modest increase in use and costs. We find little substantive effect of either policy on readmissions or mortality.

  • the effect of Prospective Payment on admission and treatment policy evidence from inpatient rehabilitation facilities
    Social Science Research Network, 2011
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    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 total number of patients admitted, admitting different types of patients, or changing the intensity of care for admitted patients. We use Medicare claims data to separately estimate each type of provider response to the PPS. 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 implementation, which we attribute to changes in treatment decisions rather than the types of patients admitted to IRFs. However, the probability of admission to IRFs increased after the PPS due to the expanded admission policies of providers. We find modest spillover effects on skilled nursing home costs and no substantive impact on patient health outcomes.

  • effects of competition on the cost and quality of inpatient rehabilitation care under Prospective Payment
    Health Services Research, 2010
    Co-Authors: Carrie H Colla, Melinda Beeuwkes Buntin, Jose J Escarce, Neeraj Sood
    Abstract:

    Every year millions of Medicare beneficiaries are discharged from acute care hospitals into institutional postacute care (PAC) in inpatient rehabilitation facilities (IRFs), skilled nursing facilities (SNFs), and long-term care hospitals (LTCHs). Each of these institutional settings offers a different level of care. IRFs provide the most intensive care rehabilitation care (3 or more hours a day of rehabilitation therapy). SNFs can also provide inpatient rehabilitation under the Medicare benefit, although it is generally less intensive than that provided in IRFs (Gage 1999). From 1988 to 1997, Medicare expenditures for PAC grew at an average annual rate of 25 percent, making it the fastest-growing category of Medicare spending [Medicare Payment Advisory Commission (MedPAC) 2003]. Congress responded by mandating Prospective Payment for PAC providers. Between 1998 and 2002, Medicare introduced Prospective Payment systems (PPSs) for SNFs (1998), HHAs (2000), IRFs (2002), and LTCHs (2002). The IRF PPS uses per discharge Payments to provide incentives for limiting costs per rehabilitation stay. Payment amounts are based on patient categories defined by the patient's rehabilitation impairment (e.g., stroke, hip fracture), functional status, and comorbidities (Carter et al. 2002). The new Payment systems blunted the rate of growth in Medicare expenditures for PAC, although these expenditures continued to rise steadily and now account for about 11 percent of total Medicare spending (Buntin, Colla, and Escarce 2009; MedPAC 2009;). Researchers have examined the effect of the new Payment systems in PAC on resource use and quality and outcomes of care. Early studies found small decreases in SNF utilization, accompanied by increases in the use of other PAC providers, after implementation of the PPS for SNFs (Angelelli et al. 2002; McCall et al. 2003; MedPAC 2003; Buntin et al. 2009;). Rates of adverse outcomes, including acute care readmissions and mortality, did not change (Angelelli et al. 2002; McCall et al. 2003;). By contrast, a later analysis found worsening of certain SNF outcomes between 2000 and 2004, and other studies have found declines in staffing and the intensity of services (Yip, Wilber, and Myrtle 2002; White 2003, 2005; Wodchis, Fries, and Hirth 2004; Murray et al. 2005; MedPAC 2006). Most recently, a study of 120 IRFs found that these facilities reduced costs per discharge during the first year of the IRF PPS (McCue and Thompson 2006). In a national study, Sood, Buntin, and Escarce (2008) found that implementation of the IRF PPS led to sizable declines in costs and length of stay, especially among facilities that had higher Payment limits under the preexisting Payment system, but patients' rates of return to the community and mortality were unaffected. The Payment system is not the only economic factor that affects resource use and quality of care among health care providers. An extensive body of research on acute care hospitals has shown that market structure, especially the degree of competition, matters as well. Studies of acute care hospitals, moreover, have found that the effects of competition on costs and quality depend on the way providers are paid and how prices for their services are set (e.g., Robinson and Luft 1985; Zwanziger and Melnick 1988; Keeler, Melnick, and Zwanziger 1999; Kessler and McClellan 2000; Mukamel, Zwanziger, and Tomaszewski 2001; Bundorf et al. 2004; Escarce, Jain, and Rogowski 2006; Rogowski, Jain, and Escarce 2007;). For instance, competition increased costs under cost-based reimbursement, whereas it decreased costs under selective contracting based on prices. Much less is known about the effects of competition in PAC markets. Further, the available research has focused on long-term care services provided in nursing homes, rather than on PAC. Studies conducted in the 1990s found that higher competition among nursing homes was associated with better structural and process quality and with adoption of total quality management (Zinn 1994; Zinn, Weech, and Brannon 1998;). Similarly, recent studies indicate that higher competition is associated with higher scores on the quality measures reported on the Centers for Medicare and Medicaid Services Nursing Home Compare Website (Zinn et al. 1998; Starkey, Weech-Maldonado, and Mor 2005; Castle, Engberg, and Liu 2007; Castle, Liu, and Engberg 2008; Centers for Medicare and Medicaid Services 2009;). To our knowledge, no study has assessed the impact of competition on the cost and quality of PAC under the recently implemented PPSs. To begin to address this gap in the literature, the current study examines the effect of competition in institutional PAC markets on resource use and health outcomes for patients who received PAC in IRFs, the most intensive setting for postacute rehabilitation care, during the first 18 months after Prospective Payment went into effect. The study focuses on patients discharged from an acute care hospital after a stroke or hip fracture, two of the conditions that most often receive institutional PAC. The empirical analyses incorporate two noteworthy innovations. First, we construct a measure of the competition facing each IRF that accounts for the fact that SNFs may be viable substitutes for IRFs in many clinical situations. Second, we use instrumental variables estimation to account for the likely endogeneity of competition.

Joseph P Newhouse - One of the best experts on this subject based on the ideXlab platform.

  • effects of medicare Payment reform evidence from the home health interim and Prospective Payment systems
    Journal of Health Economics, 2014
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    Medicare continues to implement Payment reforms that shift reimbursement from fee-for-service toward episode-based Payment, affecting average and marginal Payment. We contrast the effects of two reforms for home health agencies. The home health interim Payment system in 1997 lowered both types of Payment; our conceptual model predicts a decline in the likelihood of use and costs, both of which we find. The home health Prospective Payment system in 2000 raised average but lowered marginal Payment with theoretically ambiguous effects; we find a modest increase in use and costs. We find little substantive effect of either policy on readmissions or mortality.

  • the effect of Prospective Payment on admission and treatment policy evidence from inpatient rehabilitation facilities
    Journal of Health Economics, 2013
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    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.

  • effects of medicare Payment reform evidence from the home health interim and Prospective Payment systems
    2012
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    Medicare continues to implement Payment reforms that shift reimbursement from fee-for-service towards episode-based Payment, affecting average and marginal reimbursement. We contrast the effects of two reforms for home health agencies. The Home Health Interim Payment System in 1997 lowered both types of reimbursement; our conceptual model predicts a decline in the likelihood of use and costs, both of which we find. The Home Health Prospective Payment System in 2000 raised average but lowered marginal reimbursement with theoretically ambiguous effects; we find a modest increase in use and costs. We find little substantive effect of either policy on readmissions or mortality.

  • the effect of Prospective Payment on admission and treatment policy evidence from inpatient rehabilitation facilities
    Social Science Research Network, 2011
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    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 total number of patients admitted, admitting different types of patients, or changing the intensity of care for admitted patients. We use Medicare claims data to separately estimate each type of provider response to the PPS. 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 implementation, which we attribute to changes in treatment decisions rather than the types of patients admitted to IRFs. However, the probability of admission to IRFs increased after the PPS due to the expanded admission policies of providers. We find modest spillover effects on skilled nursing home costs and no substantive impact on patient health outcomes.

David C Grabowski - One of the best experts on this subject based on the ideXlab platform.

  • effects of medicare Payment reform evidence from the home health interim and Prospective Payment systems
    Journal of Health Economics, 2014
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    Medicare continues to implement Payment reforms that shift reimbursement from fee-for-service toward episode-based Payment, affecting average and marginal Payment. We contrast the effects of two reforms for home health agencies. The home health interim Payment system in 1997 lowered both types of Payment; our conceptual model predicts a decline in the likelihood of use and costs, both of which we find. The home health Prospective Payment system in 2000 raised average but lowered marginal Payment with theoretically ambiguous effects; we find a modest increase in use and costs. We find little substantive effect of either policy on readmissions or mortality.

  • the effect of Prospective Payment on admission and treatment policy evidence from inpatient rehabilitation facilities
    Journal of Health Economics, 2013
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    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.

  • effects of medicare Payment reform evidence from the home health interim and Prospective Payment systems
    2012
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    Medicare continues to implement Payment reforms that shift reimbursement from fee-for-service towards episode-based Payment, affecting average and marginal reimbursement. We contrast the effects of two reforms for home health agencies. The Home Health Interim Payment System in 1997 lowered both types of reimbursement; our conceptual model predicts a decline in the likelihood of use and costs, both of which we find. The Home Health Prospective Payment System in 2000 raised average but lowered marginal reimbursement with theoretically ambiguous effects; we find a modest increase in use and costs. We find little substantive effect of either policy on readmissions or mortality.

  • Medicare Prospective Payment and the volume and intensity of skilled nursing facility services.
    Journal of health economics, 2011
    Co-Authors: David C Grabowski, Christopher C. Afendulis, Thomas G Mcguire
    Abstract:

    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.

  • the effect of Prospective Payment on admission and treatment policy evidence from inpatient rehabilitation facilities
    Social Science Research Network, 2011
    Co-Authors: Peter J Huckfeldt, Neeraj Sood, Jose J Escarce, David C Grabowski, Joseph P Newhouse
    Abstract:

    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 total number of patients admitted, admitting different types of patients, or changing the intensity of care for admitted patients. We use Medicare claims data to separately estimate each type of provider response to the PPS. 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 implementation, which we attribute to changes in treatment decisions rather than the types of patients admitted to IRFs. However, the probability of admission to IRFs increased after the PPS due to the expanded admission policies of providers. We find modest spillover effects on skilled nursing home costs and no substantive impact on patient health outcomes.