Varied Regional Responses to Medicare Post-Acute Care (PAC) Prospective Payment Systems 1. Department of Family and Community Medicine, University of Missouri-Columbia 2. Division of Health Services Research and Policy, University of Minnesota 3. Office of Medical Research/Biostatistics, University of Missouri-Columbia Wen-Chieh Lin, PhD 1 Robert L. Kane, MD 2 David R. Mehr, MD, MS 1 Richard W. Madsen, PhD 3 Greg F. Petroski, MS 3 Funding Sources: Agency for Healthcare Research and Quality, Centers for Medicare and Medicaid Services

Post-Acute Care (PAC) Major PAC services covered by Medicare Part A – Skilled nursing facilities (SNFs), inpatient rehabilitation units or hospitals (IRFs), and home health agencies (HHAs) The fastest growing components of Medicare spending in the 1990s Geographic variation in PAC use Changes in PAC payment systems enacted by the Balanced Budget Act (BBA) of 1997

PAC Prospective Payment Systems (PPS) Different case-mix adjustment Different instruments for assessment Different implementation timelines – SNF-PPS: July 1998 with a 3-year transition period – IRF-PPS: January 2002 with a 1-year transition period – HHA-IPS: July 1997 interim payment system (non-PPS) – HHA-PPS: October 2000 prospective payment system

Study Objectives To investigate whether geographic regions responded to the initial changes (1996 to 2000) in PAC payment systems enacted by the Balanced Budget Act (BBA) of 1997

Data 5% Medicare beneficiary sample, 1996 to disease groups (8 DRGs) with the most frequent PAC utilization – Rehabilitative conditions Stroke, hip and knee procedures, and hip fracture – Medical conditions COPD, pneumonia, and CHF

Statistical Analysis Multinomial logit regression (1996 and 2000 data) – Dependent variable: immediate type of PAC service used after hospital discharge SNF, IRF, HHA, and No PAC (reference) – Independent variables Patient, hospital, and market area characteristics, Year 2000, Census Divisions, and interaction terms of Year 2000 and Census Divisions – Adjusted odds ratios representing changes in PAC use from 1996 to 2000 within each individual census division

Regional responses: SNF use Hip and knee proceduresCHF

Regional responses: HHA use Hip fractureCHF

Regional responses: IRF use Hip and knee proceduresHip fracture

Conclusions Regions’ responses to the BBA changes on PAC services differed by types of PAC services – Changes in SNF use differed in direction and magnitude across census divisions – HHA use decreased across-the-board for medical conditions with some regional variation; selective decrease for rehabilitative conditions – IRF use increased in some census divisions, but also remained unchanged in some census divisions

Limitations Data cover only the initial period (1996 to 2000) of the BBA changes on PAC services Association between varied regional responses and adverse outcomes is not clear

Discussion Similar regional responses across DRGs for SNF use, but not for HHA and IRF use No strong association between regional responses and prior PAC use Expected responses to the full PAC-PPS across regions