Citation URL: http://www.urban.org/AndrewKramer

Medicare has paid skilled nursing facilities (SNFs) using a prospective payment system (PPS) since 1998. This report offers policy options to refine Medicare’s payment of SNF services by developing alternative patient classification models. Three models classify patients according to expected non-therapy ancillary (NTA) costs: two models use data from the SNF to model NTA costs; a third adds data from prior hospital stays. A fourth model predicts rehabilitation therapy costs using patient characteristics. The fifth uses Diagnostic Related Groups to predict total SNF care costs. The report also simulates options for outlier payments for exceptionally high-cost cases.

The goal of this project is to examine the relative quality outcomes of treating four specific clinical conditions across post-acute care providers. The types of care facilities slated for the study are skilled nursing facilities, home health agencies, rehabilitation facilities, and, to a lesser extent, long-term care hospitals. To develop a list of four clinical conditions for study, the list of possibilities was first narrowed to eight. This report describes the analysis leading to the selection of eight candidate conditions.

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