Health Affairs, 22, no. 3 (2003): 214-223 doi: 10.1377/hlthaff.22.3.214 © 2003 by Project HOPE	New Online   How Would Obama, McCain Cover The Uninsured?   Debating Cost Of Uninsured   Try Medicare-For-All   HA Blog Top 10

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DataWatch

Rehabilitation Therapy In Skilled Nursing Facilities: Effects Of Medicare’s New Prospective Payment System

In 1998 the Centers for Medicare and Medicaid Services (CMS) began phasing in a new prospective payment system (PPS) for Medicare payments to skilled nursing facilities (SNFs). I examine the effects of the new PPS on the level of rehabilitation therapy provided in SNFs. The percentage of residents of freestanding SNFs receiving extremely high levels of rehabilitation therapy dropped significantly, and the percentage receiving moderate levels increased. Freestanding SNFs, particularly for-profits, dramatically altered the services they provided in response to new financial incentives. This responsiveness underscores the importance of efforts now under way to refine the SNF PPS.

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