Rehabilitation Services After the Implementation of the Nursing Home Prospective Payment System: Differences Related to Patient and Nursing Home Characteristics

Background: The prospective payment system (PPS) for nursing homes was designed to curtail the rapid expansion of Medicare costs for skilled nursing care. This study examines the changes that occurred in nursing home patients and rehabilitation services following the PPS.

Setting: Free-standing Medicare and/or Medicaid certified nursing homes in Ohio.

Primary Outcomes: The percent of new admissions receiving therapy and the amount of rehabilitation therapy provided.

Sample: A total of 7006 first admissions in 1994-6 (pre-PPS) and 61,569 first admissions in 2000-1 (post-PPS).

Methods: A logistic model predicting likelihood of rehabilitation was developed and validated in pre-PPS admissions and applied to the post-PPS patients. Rehabilitation services were compared in the pre-PPS and post-PPS cohorts overall, stratified by quintile of predicted score, diagnosis group, and by nursing home profit status.

Results: Post-PPS patients had less cognitive impairment, more depression, and more family support. The amount of rehabilitation services declined the most in the higher quintiles of predicted likelihood of rehabilitation and among patients with stroke. The percent of patients receiving rehabilitation services increased the most in the lowest quintile and among patients with medical conditions. These changes were greater in for-profit nursing homes.

Conclusions: The implementation of the PPS in nursing homes has been associated with a decrease in the amount of rehabilitation services, targeted at those predicted to receive higher amounts and an increased frequency of providing services targeted at those predicted to be less likely to receive them. The outcomes of the changes deserve further study.