Document Information
Preliminary Analyses for Refinement of the Tier Comorbidities in the Inpatient Rehabilitation Facility Prospective Payment System
In 2002, Medicare phased in the implementation of a prospective payment system (PPS) for inpatient rehabilitation facilities (IRFs) that included a way of addressing the added costs of treating patients with certain comorbidities. The payments for those comorbidities were determined by means of a system that ranked costly comorbidities in three cost tiers. Using data from the first year when almost all hospitals were fully paid under the PPS (FY 2003), the authors examined the relationship between comorbidities and marginal cost and the frequency with which individual comorbidities were assigned to IRF patients. They found problems with some of the tier comorbidities: Some conditions were no longer related to treatment costs; other conditions should be put in a different tier; some costly diagnoses were not part of the tier system. The authors conclude that the tier system remains an important means for matching payments to costs, although it will require a reasonable amount of revision in response to coding changes found during FY 2003. On balance, however, they judged the performance of the system to be acceptably stable, especially in the face of the large change in coding (or case mix).
Free, downloadable PDF file(s) are available below.
RAND makes an electronic version of this document available for free as a public service.
Use Adobe Acrobat Reader version 7.0 or higher for the best experience.
Contents
Chapter One:
Introduction
Chapter Two:
Data and Methods
Chapter Three:
Current Tier Conditions and Diagnoses
Chapter Four:
Exploration of Possible Additions to Tier Conditions
Chapter Five:
Implications of Suggested Changes in Diagnoses Lists
The research described in this report was supported by the Centers for Medicare and Medicaid Services and conducted by RAND Health.
This product is part of the RAND Corporation technical report series. RAND technical reports may include research findings on a specific topic that is limited in scope or intended for a narrow audience; present discussions of the methodology employed in research; provide literature reviews, survey instruments, modeling exercises, guidelines for practitioners and research professionals, and supporting documentation; or deliver preliminary findings. All RAND reports undergo rigorous peer review to ensure that they meet high standards for research quality and objectivity.
Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.
The RAND Corporation is a nonprofit research organization providing objective analysis and effective solutions that address the challenges facing the public and private sectors around the world. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.
* RAND research is conducted across divisions, centers, and projects; these organizational components are represented in the "Related RAND Divisions" section above.
Top
RAND® is a registered trademark. Copyright © 1994-2008 RAND Corporation. Last Modified: December 11, 2007 