Effects of Payment Changes on Trends in Access to Post-Acute Care

Medicare has instituted a prospective payment system to reimburse facilities for patient care. Paying a predetermined rate per patient gives facilities incentives to provide care efficiently, since they can keep any difference between the set payment and their costs. However, it also gives them incentives to change their care and practice patterns to increase revenue. The authors examine the cumulative effects of payment system changes for patients receiving post-acute care, focusing on elderly Medicare patients discharged from acute care facilities, with a diagnosis of hip fracture, stroke, or lower extremity joint replacement.