CHARGES FOR OUTPATIENT REHABILITATION - GROWTH AND DIFFERENCES IN PROVIDER TYPES

Objective: This study compares Medicare program charges through time f or outpatient rehabilitation services across different types of instit utional providers. Design: Observational study of Medicare Part B clai ms. The analytic methods include a decomposition analysis and analysis of variance via regression. Setting: Data come from six different ins titutional provider types: community hospital outpatient departments, rehabilita tion hospital outpatient departments, skilled nursing facil ities, independent rehabilitation agencies, comprehensive outpatient r ehabilitation facilities, and home health agencies. Patients: Five per cent random sample of Medicare beneficiaries who used any institutiona lly based Part B physical, occupational, or speech therapy during the calendar years 1987 to 1990. Main Outcome Measure: Charges for Medicar e Part B rehabilitation therapies (physical and occupational therapy, speech pathology). Results: Charges for rehabilitation services grew m ore than 86% during this period across all provider types. Both the li kelihood of using rehabilitation services and the average annual charg es per patient grew rapidly. We found large differences in average ann ual per person charges and in the growth in charges across the six ins titutional provider types. Analyses that controlled for patient demogr aphic characteristics and diagnoses across five provider types did not explain observed differences. Hospital outpatient departments were co nsistently the least costly type of institutional provider and indepen dent rehabilitation agencies the most expensive. Diagnostic data were not available for home health agency claims, so these were omitted fro m the multivariate analysis of annual charges. Conclusions: The large increases in charges cannot be explained by increases in the Medicare eligible population, aging, or inflation. The level and differential i n growth is highest among new provider types and those dominated by pr oprietary ownership. These observations suggest that therapy services are profitable and that provider incentives may be an important compon ent in overall growth. (C) 1996 by the American Congress of Rehabilita tion Medicine and the American Academy of Physical Medicine and Rehabi litation