Efforts are currently underway to develop a prospective payment system for inpatient medical rehabilitation. In this study, a clinically based, condition-specific patient classification scheme was developed that includes 33 patient groupings, referred to as Functional Related Groups (FRGs). Each FRG is comprised of patients with similar clinical characteristics and resource use, as measured by length of stay. From a policy perspective, the FRGs minimize the adverse incentives that may develop in the selection of patients for admission to the rehabilitation facility. The FRGs, therefore, may be used as a basis in the development of a prospective reimbursement system for rehabilitation services.
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