The effect of Medicare's payment system for rehabilitation hospitals on length of stay, charges, and total payments

Leighton Chan, Thomas D. Koepsell, Richard (Rick) Deyo, Peter C. Esselman, Jodie K. Haselkorn, Joseph K. Lowery, Walter C. Stolov

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71 Citations (Scopus)

Abstract

Background: Medicare's system for the payment of rehabilitation hospitals is based on limits derived from a hospital's average allowable charges per patient discharged during a base year. Thereafter, payments are capped, but hospitals receive incentive payments if charges per patient are reduced in succeeding years. We hypothesized that per-patient charges would increase during the base year and then decrease in subsequent years. Hospitals would thus have higher reimbursement limits and receive incentive payments for reducing their charges. Methods: We analyzed Medicare claims data for 190,921 discharges from 69 rehabilitation hospitals from 1987 through 1994. We compared total charges, length of stay, and interim payments before, during, and after each hospital's base year. Results: After we controlled for inflation and temporal and seasonal trends, mean charges per patient discharged increased from $25,131 for patients discharged before the base year to $32,167 for patients discharged in the base year (a 28 percent increase, P

Original languageEnglish (US)
Pages (from-to)978-985
Number of pages8
JournalNew England Journal of Medicine
Volume337
Issue number14
DOIs
StatePublished - Oct 2 1997
Externally publishedYes

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Medicare
Length of Stay
Rehabilitation
Motivation
Economic Inflation

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  • Medicine(all)

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The effect of Medicare's payment system for rehabilitation hospitals on length of stay, charges, and total payments. / Chan, Leighton; Koepsell, Thomas D.; Deyo, Richard (Rick); Esselman, Peter C.; Haselkorn, Jodie K.; Lowery, Joseph K.; Stolov, Walter C.

In: New England Journal of Medicine, Vol. 337, No. 14, 02.10.1997, p. 978-985.

Research output: Contribution to journalArticle

Chan, Leighton ; Koepsell, Thomas D. ; Deyo, Richard (Rick) ; Esselman, Peter C. ; Haselkorn, Jodie K. ; Lowery, Joseph K. ; Stolov, Walter C. / The effect of Medicare's payment system for rehabilitation hospitals on length of stay, charges, and total payments. In: New England Journal of Medicine. 1997 ; Vol. 337, No. 14. pp. 978-985.
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AU - Chan, Leighton

AU - Koepsell, Thomas D.

AU - Deyo, Richard (Rick)

AU - Esselman, Peter C.

AU - Haselkorn, Jodie K.

AU - Lowery, Joseph K.

AU - Stolov, Walter C.

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