• Deborah Dobrez, Allen W Heinemann, Anne Deutsch, Larry Manheim, and Trudy Mallinson.
• Division of Health Policy and Administration, University of Illinois at Chicago, 1603 West Taylor Street, Chicago, IL 60612, USA.
• Am J Phys Med Rehabil. 2010 Mar 1;89(3):198-204.

ObjectiveTo estimate the effect of Medicare's prospective payment system for inpatient rehabilitation facilities on discharge functional status, community discharge, and length of stay.DesignSecondary analysis using data drawn from the American Medical Rehabilitation Providers Association subscription database. Eligible patients were Medicare and non-Medicare stroke patients discharged from inpatient rehabilitation facilities from 1998 through the first two quarters of 2006. Random effects panel data models were used to estimate the impact of prospective payment on motor and cognitive discharge function, the probability of discharge to the community and inpatient length of stay, controlling for patient, and facility characteristics.ResultsThe introduction of prospective payment was associated with small, statistically significant reductions in Functional Independence Measure discharge motor (-1.10) and cognitive (-0.15) scores and in the probability of discharge to the community (adjusted odds ratio: 0.87) for Medicare fee-for-service patients. Length of stay was substantially lower for both Medicare (-1.86 days) and (-2.16) non-Medicare fee-for-service patients.ConclusionsFurther research is needed to determine whether the small reductions in patient function are persistent over time. This short-term evaluation of prospective payment system suggests minimal negative impact on stroke patient function at discharge because of the change in Medicare reimbursement but a decrease in likelihood of discharge to the community.

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