Possible Refinements to the Construction of Function-Related Groups for the Inpatient Rehabilitation Facility Prospective Payment System
Download eBook for Free
(includes all revisions)
|PDF file||0.3 MB|
|PDF file||0.1 MB|
|PDF file||0.1 MB|
In 2002, Medicare implemented a prospective payment system (PPS) for inpatient rehabilitation facilities (IRFs). The PPS works by assigning patients to groups according to how well patients function. These groups, called function-related groups (FRGs), are then used to predict the cost of treating particular Medicare patients according to their ability to function in four general categories: transfers, sphincter control, self-care (e.g., grooming, eating), and locomotion. Patient functioning is measured according to 18 categories of activity-13 motor tasks, such as climbing stairs, and 5 cognitive tasks, such as recall. As part of a contract to monitor how accurately the IRF PPS is predicting treatment costs, the Center for Medicare and Medicaid Services (CMS) asked RAND to examine possible refinements to the FRGs to identify potential improvements in the alignment between Medicare payments and actual hospital costs. Several developments make it likely that significant refinements can be made: a new recording instrument, known as the IRF Patient Assessment Instrument, containing questions that improved the quality of the patient information available to us; more recent data on a larger patient population that describe the entire universe of rehabilitation patients; improvements in the algorithms that produced the initial FRGs, which should improve prediction of treatment costs; and the two years that have passed since the initial FRGs were created, during which changes in the cost structure of IRFs have occurred. Our analysis had two specific objectives: (1) to explore whether the new data enable better prediction of treatment costs and (2) to assess possible refinements to the FRGs based on the new data. To address the first objective, we reexamined assumptions about whether particular indicators that an activity was not observed, or “missing,” indicated a lack of functioning or simply absent data. We also looked at the usefulness of some new indicators in the IRF PAI data for predicting costs. To address the second objective, we also performed two tasks: First, we considered whether alternative indices that included weighting for patient functioning might predict costs more accurately; second, we ran the algorithm used in 1999 to derive FRGs with the new IRF PAI data to see whether the FRGs would look substantially different. Our analysis identified several potential areas of refinement for the payment system, assuming the analysis effects we observed hold up on 2003 data: missing indicators, importance of “function modifiers,” indices and weighting, and refinements to the FRGs. For example, the earlier data assumed that no report about a particular function meant that patients were unable to perform it, an assumption that held true for most activities. However, we found that a lack of data for “transfer to toilet” and “transfer to tub” should be interpreted less strongly than for the other missing indicators. The more-nuanced information about patient functioning provided by “function modifiers,” such as distance walked, adds information to the basic functional independence measurement, or FIM™, category, such as “walking.” By using a motor index that does not equally weight all components, some improvement in explanatory power could be expected. Moreover, using the 2002 data in an algorithm that produced the 1999 FRGs, we found many fewer payment groups across the various conditions.
Table of Contents
Description of the New IRF PAI Data
Analysis of Missing FIM™ Data
Analysis of Function Modifiers
Alternatives to the Standard Motor and Cognitive Scores
Updating and Refitting the FRGs
Summary of Considerations for Refinement
Supporting Tabular Details
FRGs Based on Simple Indices
The research described in this report was supported by the Centers for Medicare and Medicaid Services and conducted by RAND Health.
This report 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.
This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.