The Association Between Prospective Payment System and Post-Acute Care Outcomes Among Traditional Medicare Beneficiaries in Inpatient Rehabilitation Facilities

Abstract

Objectives: To assess whether Prospective Payment System (PPS)-regulated expected length of stay (eLOS) affects actual length of stay (aLOS) and subsequent post-acute care (PAC) outcomes among traditional Medicare beneficiaries.

Design: Data from the Inpatient Rehabilitation Facility-Patient Assessment Instrument for 2019 to 2020 were analyzed.

Setting and participants: 184,202 Medicare beneficiaries aged 65 and older were admitted to inpatient rehabilitation facilities for stroke, hip fracture, cardiac, or joint replacement.

Methods: We used a 2-way fixed-effects instrumental variable approach based on a cross-sectional study. Exposure is the aLOS, which is instrumented by eLOS based on Centers for Medicare & Medicaid Services-defined case-mix groups and comorbidity tiers. Primary outcomes are functional improvements (mobility and cognitive scores), discharge destination (home, home with home health, and skilled nursing facility), and successful community return (discharge to home or home health).

Results: Among the 184,202 beneficiaries, 85,737 were admitted for a stroke, 54,763 for a hip fracture, 28,151 for a cardiac condition, and 15,551 underwent joint replacement. The mean age was 78.2 years (56.8% female) before the COVID-19 pandemic and 78.4 years (57.3% female) during the pandemic. eLOS was significantly associated with aLOS across all conditions. Each additional day of aLOS was significantly associated with increases of 4.39% to 4.51% in mobility scores and 2.96% to 3.70% in cognitive scores for patients with stroke, hip fracture, and cardiac disease. Longer LOS also increased the likelihood of returning to the community among patients with stroke (odds ratio [OR], 1.073; P < .01), hip fracture (OR, 1.199; P < .01), and cardiac condition (OR, 1.095; P < .01) patients but had no significant effect among patients who underwent joint replacement.

Conclusions and implications: PPS-regulated eLOS influences aLOS and affects PAC outcomes differently. These findings support the role of PPS in improving care delivery and advancing health care equity in PAC.

Keywords: COVID-19; Post-acute care; inpatient rehabilitation; prospective payment system; traditional Medicare.