Determinants of Rehabilitation Therapy in Non-Elderly Institutional Long Term Care Residents
Total Page：16
File Type：pdf, Size：1020Kb
Payer Incentives and Physical Rehabilitation Therapy for
Non-Elderly Institutional Long-term Care Residents:
Evidence from Michigan and Ontario.
(in Press: Archives of Physical Medicine and Rehabilitation)
Walter P. Wodchis, Ph.D.1,2,3
Brant E. Fries, PhD. 4,5,6
Harold Pollack, PhD. 4
1. Toronto Rehabilitation Institute 2. Institute for Clinical Evaluative Sciences 3. Department of Health Management, Policy and Evaluation, University of Toronto 4. Department of Health Management and Policy, University of Michigan 5. Institute of Gerontology, University of Michigan 6. VA Medical Center, Ann Arbor
Corresponding Author :
Walter P. Wodchis, PhD.
Scientist, Toronto Rehabilitation Institute
Queen Elizabeth Centre, 130 Dunn Avenue
Toronto, Ontario, M6K 2R7
Phone: 416-597-3422 (x2242)
Fax: 416-530-2470
February 24, 2003
Running Head : Payer Incentives and Rehabilitation Care
1 Payer Incentives and Physical Rehabilitation Therapy for Non-Elderly Institutional Long- term Care Residents: Evidence from Michigan and Ontario
Abstract
Objective: The purpose of this study is to examine the effect of payment incentives on the provision rehabilitation therapy to non-elderly nursing home residents.
Design: Retrospective cross-sectional study.
Participants and Setting: All non-elderly nursing home residents admitted to nursing homes in
Michigan, U.S.A. or Complex Continuing Care facilities in Ontario, Canada in 1998 or 1999
(n=5,189)
Main Outcome: The focus for the present study is the effect of payment on access to physical therapy (PT) and occupational therapy (OT) and total weekly therapy time for each therapy type.
Results: A Medicare policy change from cost-based to a patient-specific case-mix payment method was associated with greater likelihood of receiving OT but reduced weekly minutes of
PT and OT provided to residents. Medicare cost-based and private-insurance was associated with greater likelihood of receiving OT and PT and more therapy time for both types of therapy compared to private-pay residents. Global budget payment was associated with greater access to
PT but less weekly minutes of OT and PT .
Conclusions: Little information exists to describe the characteristics and treatment of non- elderly nursing home residents. This study finds that many of these residents receive rehabilitation and that residents whose care is paid for by more generous payers such as
Medicare receive more therapy than those paid for by less generous payers.
Key Words: Reimbursement Incentives, Nursing home, Rehabilitation
2 Payer Incentives and Physical Rehabilitation Therapy for Non-Elderly Institutional Long- term Care Residents: Evidence from Michigan and Ontario
Introduction
Physical rehabilitation treatments are commonly delivered in nursing homes. Between one third and one half of nursing home residents are admitted for rehabilitation care.1,2 These residents are typically admitted to nursing homes from hospitals for care following acute events.3,4 Although rehabilitation care and its effect on resident outcomes has been studied in specialized care settings,5,6 little is known about the determinants of physical rehabilitation treatment in nursing home settings.7,8
Demand for physical rehabilitation treatment in nursing homes depends on resident prognosis
(need) and the level of payment (price) for private and public payers. In the United States, public payers are important because Medicare and Medicaid programs pay for more than two-thirds of all nursing home care.9 Policy for these two government programs can affect rehabilitation therapy in nursing homes through the level and method of payment given to nursing home providers. North of the U.S. border, a single payer system in each Canadian province finances all medical costs for institutional long-term care.
Different payment methods used by government programs provide different incentives to nursing home providers for selecting residents and allocating treatments among nursing home residents.10,11 Hence, health policy is important for determining who will receive rehabilitation therapy and who will pay for the therapy.12-14 Because nursing home providers have considerable
3 discretion in providing rehabilitation to residents, understanding how providers respond to payment incentives is important to ensure that both resident and policy goals are achieved.
Research from the U.S. shows that nursing home providers respond to changes in Medicaid payment methods by changing staffing and total care costs.10,11,15 Because multiple payers are present, providers face different incentives for different residents. The presence of excess demand from public pay residents allows providers to use price-discrimination and receive different payment levels for the same level of care depending on a resident's payment source.
Nursing home providers will always prefer private-pay residents to public-pay residents because governments, particularly Medicaid programs, typically pay lower payment rates than private residents.16 While private-pay nursing home residents receive the level and type of care for which they are willing to pay, publicly financed residents may have far less influence over their treatment. The latter residents must rely on the public payers to pay for rehabilitation therapy.
Historically public payers reimbursed nursing home providers the full cost of care through retrospective cost-based payment. Two other common forms of payment are prospective flat-rate and case-mix payment.17 Flat-rate payment compensates nursing homes with a pre-determined fixed per-resident amount regardless of resident needs, while case-mix uses a pre-determined reimbursement level that provides higher payment for higher severity residents. Additional payment for rehabilitation therapy is typically included in cost-based and case-mix payment.
Some Medicaid programs use flat-rate payment for nursing home care and provide additional payment for rehabilitation therapy using a fee-for-service payment arrangement. An alternative payment method used for many Canadian long-term care facilities is global-budget payment.
4 Under global budget payment, a facility is given a predetermined total reimbursement for all resident care (typically subject to occupancy targets). The effect of each of these payment methods on the delivery of rehabilitation care is of interest to policy makers.
This paper examines the effect of different payment methods on the provision of physical rehabilitation therapy to non-elderly nursing home residents. Comparisons are made between residents in Michigan and Ontario residents based on the payment method used by different payers for their nursing home care. A logistic model is used to predict the likelihood of receiving occupational therapy (OT) and physical therapy (PT). Regression analyses are used to determine the effect of payment on the total time for OT and PT respectively. The study examines the effect of a change in Medicare payment method from retrospective cost-based payment to prospective case-mix payment on the delivery of ancillary rehabilitation therapy to non-elderly nursing home residents. This research also provides the first evidence of the effect of global budgets on nursing home ancillary rehabilitation therapies.
Payment Incentives
This section describes the different payment methods used by public payers and identifies the economic incentives to providers to delivery rehabilitation therapy under each payment method.
Private-pay nursing home residents are a useful comparison group for examining the effects of public payment methods because private-pay residents are able to contract for their care on an individual basis. In contrast to private-pay residents, public payers and private insurance plans must employ a systematic payment that will apply to all eligible residents. The delivery of
5 nursing home care to publicly financed and privately insured residents will depend on the payment rate and the payment method used to reimburse facilities.
Cost-based payment provides full reimbursement to nursing home providers for all care provided. This approach allows providers to increase the level of rehabilitation care with no additional financial risk, regardless of resident prognosis.17 So long as additional rehabilitation care does not diminish resident health, the public-pay resident will seek additional rehabilitation care. Under cost-based payment, the provider has no incentive to limit this demand. Private insurance plans typically pay for all nursing home care based directly on costs or based on the type of services required.18 On the other hand, prospective case-mix payment provides a pre- determined payment rate that depends on a resident's clinical and functional conditions.19
Relative to cost-based, prospective case-mix payment reduces incentives at the margin to provide potentially excessive rehabilitation care to highly functional residents because costs associated with additional rehabilitation care will not be reimbursed to providers. However, because case- mix payment provides additional payment for higher levels of rehabilitation, the incentive to provide some rehabilitation is not diminished and, depending on the level of additional payment, may in fact be enhanced. Flat-rate and global budgets provide a predetermined payment for all care costs without consideration for clinical complexity. Because these systems do not adjust for resident functioning, they effectively transfer the risk and cost of additional care to the provider
(i.e. the marginal revenue associated with additional care is zero and the nursing home facility faces the full marginal cost of providing rehabilitation care). Hence, facilities have an incentive to limit the number of residents receiving rehabilitation therapy and/or the intensity of therapy provided to residents. In practice global budgets are employed under a single-payer system while
6 flat-rate payment applies only to a subset of patients within the facility. Absent additional regulatory controls flat-rate payment provides no incentive to provide additional rehabilitation whereas under global budgets, facilities are obligated to spend their allocated budgets. A fixed facility-wide global budget in a single-payer system implies that providing more rehabilitation therapy to one resident necessarily reduces the amount of resources available to other residents in the same facility. In other words, global budgets result in rationing of rehabilitation resources among residents within a facility (On the workings of global budgets, see Pollack and
Zeckhauser, 1996).20 Because there are no payment differences between residents the Ontario rehabilitation allocation is determined by clinical staff based on their clinical knowledge, while the American allocation between residents will be determined in part by the payment source (and thus payment level). The decision criteria for rationing is of interest to payers because the resulting allocation of resources among nursing home residents may be driven by the payment method. The allocation of resources is often more important to policy makers than the total amount spent on health care.21
Existing Payment Systems
Empirical identification of payment methods is possible because public payers use different payment methods to reimburse nursing homes. In Michigan, rehabilitation therapies in nursing homes can be financed by private-pay residents, private insurance, Medicaid, or Medicare.
Residents must be elderly or be diagnosed with a qualifying permanent disability and have an acute hospital discharge to qualify for Medicare payment, while Medicaid eligibility is based on income. Medicare residents are eligible for skilled rehabilitation care if it is required to improve their condition within a predetermined time period, or to maintain their condition and prevent
7 further deterioration.22 The Medicare benefit provides up to 100 days of post-acute care and functional rehabilitation to help residents regain functional independence. Thus residents paid for by Medicare all enter the nursing home following an acute hospital stay and all have resided in the nursing home for less than 100 days. Medicaid, private-pay, and privately-insured residents are not eligible for Medicare benefits either because they have used up their Medicare benefit or because they did not have a pre-admission acute hospital stay (In cases of joint-eligibility,
Medicare is the first payer for rehabilitation care). Nursing home care for each type of resident may differ because of differences in clinical conditions that necessitate nursing home care. This study posits that differences in the payment method employed by each payer also influences resident rehabilitation therapy treatment.
Privately insured benefits through employer-sponsored or private-market insurance are relatively rare. When they do exist, benefits are typically paid either under a cost-based reimbursement approach, or on a disability model with a reimbursement fee that depends on the type of LTC services required.18 Thus payment for care of privately insured residents is based on their clinical needs which may be slightly less generous than a cost-based system, but provides higher payment for higher levels of required services. The Centers for Medicare and Medicaid Services
(CMS) controls the payment for Medicare claims while state policy makers control Medicaid payment methods. Until July 1998, the Medicare payment to nursing homes used cost-based payment. Since then, Medicare payment is determined by the Resource Utilization Groups
(RUG-III) case-mix payment algorithm. The RUG-III system results in payment that depends on the level of resident functional status and rehabilitation treatment intensity. Michigan Medicaid payment for physical and occupational therapy is based on a fee-for-service reimbursement. The
8 fee-for-service payment for rehabilitation care is similar to cost-based reimbursement because additional units of care are reimbursed. Unlike cost-based payment, the predetermined fee restricts providers from providing levels of care that are associated with marginal costs higher than the predetermined price. In addition, rehabilitation therapy for Michigan Medicaid residents is authorized for treatment programs of limited duration and further treatment is dependent on evidence of resident functional improvement.
To expand the evaluation of payment methods, this study uses a U.S.-Canada, cross-national sample of nursing home residents. International comparisons of nursing home care can broaden the study of health system and policy variables.8 A potential problem with international comparisons is that differences in unobserved factors such as social and economic characteristics may confound results. The similarities between the United States and Canada in terms of demographic, economic and environmental characteristics has led to numerous comparative studies of health care between these two countries.22-26 In these studies, any differences are usually attributed to the effect of Canada's universal health care system and the use of global budgets to pay for institutional health care.23,24 Adjacent jurisdictions of these two countries, such as Ontario and Michigan, can provide more comparable results than more distant comparisons.
Important for the purposes of this study, Ontario complex continuing care facilities use the same nursing home resident assessment instrument that is used in Michigan nursing homes. This enables consistent resident-level comparisons to be made. The use of a common assessment tool is also linked to a common approach to resident care planning and quality assurance. The primary differences between the Ontario and Michigan jurisdictions are the number of payers in each jurisdiction and the payment method used by each payer. Hence these two jurisdictions are a useful basis for comparing the effect of payment on nursing home rehabilitation care.
9 Each Canadian province is responsible for the organization and payment for health services.
While all provinces conform to federal guiding principles, there are substantial differences across provinces in long-term care policies. In Ontario, all medical costs for institutional long-term care for the aged are paid for by the provincial, universal coverage health insurance. In Ontario, two types of institutions provide long-term care. Residential care facilities are primarily intended for individuals with disabling chronic conditions and who require 24-hour nursing oversight, while complex continuing care (CCC) facilities are intended for individuals who meet the latter criteria, but also require more intensive treatments than those placed in residential care. Ontario
CCC facilities are paid a prospectively determined annual global budget that is based on historical funding levels and did not depend on resident characteristics. Only CCC facilities are included in this study because resident level data are not available from other Ontario care settings. Other Ontario long-term care facilities provide almost no rehabilitation care and are more akin to Michigan board and care facilities.
Study Population
This study focuses on the provision of physical rehabilitation therapy to non-elderly nursing home residents. This contrasts with past studies of rehabilitation care in nursing homes that have focused on the elderly population.27 Recent research indicates that the 10% of nursing home residents who are under the age of 65, are more likely than elderly residents to receive rehabilitation treatments.28 The non-elderly population is typically overlooked by other researchers and may be vulnerable to unintended policy effects. At the same time, younger
10 residents are an especially important population to study because these residents may have a better chance of functional improvement following rehabilitation.14
Methods
The empirical approach used in this study is a two-part model. First we assess access to therapy by estimating the likelihood of receiving any occupational or physical rehabilitation therapy.
Second, we examine the effect of payment methods on the total weekly minutes of rehabilitation therapy delivered to residents using ordinary least squares regression on the sample of residents who do receive rehabilitation therapy.
Data
Data for the current study are based on the Minimum Data Set (MDS) resident assessment instrument for nursing homes version 2. Data for Michigan and Ontario residents in 1998 and
1999 were extracted from the University of Michigan Assessment Archive Project (UMAAP).
The MDS is a comprehensive assessment containing more than 400 items relating to resident diagnosis, functioning, and treatment. The MDS is mandated for use in all United States nursing homes and for CCC facilities in Ontario, Canada. All residents must have a MDS assessment completed on admission to the nursing home and every 90 days thereafter. Additional assessments are required on significant change in health status or nursing care, and for Medicare residents assessments are now required specifically on day 14, 30, and 60 as well. In all cases the time frame for the data collected on MDS assessments is the seven days prior to assessment. The reliability and validity of the MDS instrument has been demonstrated in repeated studies.29-33 The selection criteria for the sample used in this study is age less than 65 years old and admission
11 date in 1998 or 1999. One randomly selected assessment for each resident was retained for analysis. The resulting sample includes 2,807 Ontario residents and 3,803 Michigan residents.
Measures
Occupational and physical therapy times are assessed on the MDS as the total minutes of each type of therapy provided in the seven days preceding the assessment. (Where assessments are performed before seven full days in the nursing home, in particular for Medicare residents, facilities are required to estimate the total therapy time that residents will receive by the end of the seventh day.) Payment indicator variables are created for private-insurance, Medicaid,
Medicare, and Ontario payers. Payment method is identified by the latter payers. Ontario represents global budget payment, Medicaid represents fee-for-service (Medicaid reimbursement is mandated not to exceed Medicare reimbursement). Private-insurance and pre-case-mix
Medicare residents are paid for by cost-based payment, while post-case-mix Medicare residents identify this final payment method. Private-pay residents form the comparison population for
U.S. payers and are the omitted group while Ontario residents are compared to all U.S. residents.
Case-mix payment became applicable for each nursing home facility as of their fiscal cost- reporting end date following July 1, 1998. For most (65%) of Michigan facilities this was
December 31, 1998, (other facilities have fiscal end dates at the end of September, March and
June). The case-mix indicator variable is defined using the facility fiscal end-date for U.S. residents and is set to December 31, 1998, for Ontario residents. The date for Ontario facilities was chosen to provide the closest temporal correspondence to the effective date for the U.S.
12 change to case-mix. The case-mix variable captures contemporaneous trends that affected the delivery of rehabilitation treatment to all residents.
To examine the effect of the Medicare payment policy change to case-mix from cost-based payment, a differences-in-differences estimator (D2) is identified by the interaction between
Medicare payment and a dichotomous case-mix indicator variable. While the Medicare indicator variable captures the difference between Medicare and private-pay residents and the case-mix indicator variable captures the difference between pre and post-case-mix periods for all residents, the interaction term captures the specific effect of case-mix payment on rehabilitation treatment for Medicare residents (versus private-pay residents). The required identification assumption for the D2 estimator is that no other contemporaneous changes occurred at the same time as the transition to case-mix that affected only Medicare or only private-pay residents.
The focus for the present study is the effect of payment on rehabilitation care. It is important to ensure that the comparison of residents provides sufficient risk-adjustment for differences in resident populations. An extensive array of resident-level characteristics is added to regression analyses to adjust for potential differences. While including more variables in the model improves risk-adjustment, it may increase potential collinearity among variables and decrease the magnitude of parameter estimates. Conclusions should be made with this caution. Resident characteristics included as explanatory variables are age (in decades), gender, race, marital status, admission source, and length of stay in days (the logarithm is used in the linear regression). While we use a random assessment from each resident, we include an additional indicator variable to identify assessments collected within the first 15 days of a nursing home
13 stay. This variable accounts for the fact that residents might be more likely to receive rehabilitation on admission to the nursing home in a pattern that is not fully captured by the log- linear length of stay variable. Functional variables are rehabilitation potential, the MDS hierarchical activities of daily living scale (ADL, including toileting, transferring, personal hygiene, and eating), and the MDS cognitive performance scale (CPS, including items for memory, decision making skills and communication ability). The latter two measures have demonstrated reliability and validity in comparison to common rehabilitation measures including the Functional Independence Measure and the Mini-Mental State Exam respectively.34,35 Both
ADL and CPS scales are scored from 0 (fully independent) to 6 (fully dependent). Resident behavior problems are assessed by the frequency of verbal abuse, inappropriate behavior and wandering.
While the present research examines the effects of government payment methods, analyses must control for individual resident prognoses. Physical rehabilitation care is recommended for treatment following spinal cord injury,36,37 traumatic brain injury,38,39 stroke,40,41 hip fractures,42 cardiac conditions,43-45 and terminal conditions.46 Studies of rehabilitation have also suggested the importance of co-morbidities such as seizures,47 depression,27 mental health problems,48 and resident behaviors.49 Selection of clinical measures is based on prior clinical research and an observed prevalence of at least one percent in the study population. Clinical variables include falls, fractures, quad/paraplegia, traumatic brain injury (TBI), peripheral vascular disease (PVD), arteriosclerotic heart disease(ASHD), congestive heart failure(CHF), hypertension, other cardiac conditions, diabetes, cerebral vascular accident (stroke), Parkinson's, bipolar disease, schizophrenia, multiple sclerosis, cerebral palsy, Alzheimer's, vascular dementia, asthma,
14 emphysema or chronic pulmonary obstructive disorder, depression, comatose, cancer, and terminal illness. Diagnoses were excluded from the final analyses if they were not statistically significant in predicting either receipt of therapy or weekly therapy time. ASHD, CHF, diabetes, schizophrenia, cerebral palsy, Alzheimer's, dementia, and depression were excluded from the final model.
To account for any additional unmeasured resident severity, the regression analysis adjusts for casemix using the nursing casemix index from the MDS RUG-III nursing casemix index.50 We use the nursing casemix index instead of the overall index because the latter includes an adjustment for rehabilitation therapies, which would introduce endogeneity in the regression model.
Even after controlling for the several co-morbid conditions, cross-sectional differences in rehabilitation therapy provided to different payers’ residents may not be solely attributable to differences in payment. In fact, residents in each different payment group represent selected groups from the total population of residents. Residual correlation between both observed and unobserved resident factors and the payment indicators may bias the estimated effects of each payment method. Because the Medicare D2 estimator controls for such differences in resident characteristics, the effect of Medicare case-mix payment is not subject to this estimation problem although the estimates of cross-sectional differences in non-Medicare residents potentially are.
We conduct several sensitivity analyses to identify such biases. In particular we examine changes in parameter estimates when analyses are limited to sub-samples of the population (based on observed characteristics that appear to be related to selected payment groups). Our final results
15 are based only on resident assessments performed within the first 90 days of nursing home care.
This approach eliminates the differences between residents in different payment groups (on both observed and unobserved variables) that are associated with longer resident stays in the nursing home.
Results
Summary rehabilitation statistics and all control variables, stratified by payment method, are presented in Table 1. While Table 1 presents a daunting array of resident characteristics for each payer, it is useful because it identifies both differences in treatment patterns and differences in resident conditions among the residents in different payer groups. Seventy-five percent of
Medicare residents received either physical or occupational therapy before the implementation of case-mix payment while 81% received such care in the period following the implementation of case-mix payment. The prevalence for either type of therapy was 38% for private-pay residents,
73% for privately insured residents, 22% for Medicaid residents, and 63% for Ontario residents.
The average duration of weekly therapy time was calculated using only residents who do receive therapy as the denominator. Therapy times for both OT and PT show similar results. Following the implementation of case-mix payment for Medicare residents, average therapy time declined from about 250 minutes per week to about 190 minutes per week (for each type of therapy).
Private-pay residents received about 160 minutes per week, privately-insured residents about 220 minutes per week, Medicaid residents about 175 minutes and Ontario residents received the least therapy with about 120 minutes per week.
The average age for all payer groups was about 50 years. ADL function and nursing intensity are similar across payment groups while Medicare and privately-insured residents are slightly less
16 cognitively impaired than other residents. Medicare residents also have a higher prevalence of stroke, cardiac, and respiratory conditions, while Ontario has a substantial prevalence of cancer and terminal residents. It is important to consider the difference between private-pay and other residents as the former serve as the reference category in the multivariate analyses. Private-pay residents have similar ADL, cognition, nursing intensity to other payer groups. Private payers are similar only to Medicaid residents in pre-admission hospitalization. In diagnoses and resident conditions, private-pay residents are most similar to Medicaid and Ontario residents, while
Medicare and private-insurance residents are more alike.
[Table 1. Prevalence and means for resident characteristics]
Regression Results
Logistic regressions are used to examine the determinants of receiving occupational and physical therapy. The implementation of case-mix payment for Medicare residents is captured in the term capturing the interaction between Medicare and case-mix payment. The change to case-mix payment is associated with significantly higher odds of receiving OT (PT results were also higher but not significant). This estimate controls for any differences between Medicare and other residents that are constant over time. In comparison to private-pay residents (omitted category), Michigan Medicare (cost-based) residents are more than two and a half times more likely than private-pay residents (reference group) to receive PT (OT results were not significant). On the other hand, Michigan Medicaid residents are only about half as likely to receive either therapy. Ontario residents are two and a half times more likely to receive
17 PTcompared to U.S. residents (OT results again not significant). The results of the logistic regression for both occupational and physical therapies are presented in Table 2.
In addition to payment sources, residents are more likely to receive therapy on admission to the nursing home and when admitted following a hospitalization. Resident and staff prognosis of rehabilitation potential are significant predictors of receiving occupational and physical therapy.
Residents with low functional status, as measured by higher scores on the CPS and ADL
Hierarchy scales, are less likely to receive rehabilitation. Diagnostic conditions associated with receipt of occupational therapy are: falls, hypertension, stroke, and bipolar disorder, while comatose, and terminal conditions are negatively associated with OT therapy. Most of the conditions that are significant in the occupational therapy analysis also emerge in the analysis of physical therapy. In addition to the diagnoses that are significant for OT, residents with other fractures and emphysema are more likely to receive PT residents with multiple sclerosis, PVD, or cancer are less likely to receive PT therapy.
[Table 2. Logistic Regression for Occupational and Physical Therapy]
The results for weekly therapy time are applicable only to residents who receive occupational or physical therapy respectively. Linear regression results are presented in Table 3. The logarithm of the dependent variable was used for the linear regression analysis to improve the fit of the model. The coefficients can be interpreted as the percentage difference in therapy minutes compared to the omitted category. The change to case-mix payment for Medicare residents resulted in a reduction in weekly therapy minutes of about 25%. On average, Medicare residents
18 receive 50% more occupational or physical therapy than private-pay residents. Medicaid residents receive 23% less weekly physical therapy time (OT therapy not significant). Private insurance residents receive 34% more OT and 44% more PT than private-pay residents, and
Ontario residents receive 41% less OT time and 20% less PT time. To examine the level of therapy provided to the post-case-mix Medicare population, we can add the effects of Medicare with the Medicare*case-mix interaction term. After case-mix payment, Medicare residents received 25 percent more therapy time compared to private-pay residents. The linear combination was tested with a t-test and was significant using a 0.01 p-value.
Positive staff and resident prognosis for rehabilitation potential are associated with more occupational and physical therapy. Post-acute residents receive more PT than other residents and higher levels of therapy are delivered on admission to the nursing home. Stroke and hypertension are associated with more OT time while emphysema, cancer, and terminal conditions are associated with less OT and PT time. Finally, PT time is less for residents with hip fractures and quadriplegia.
[Table 3. Linear Regression for Intensity of Occupational and Physical Therapy]
While the difference-in-difference estimator for the Medicare payment group controls for selection effects between payment groups, the other estimates of payment effects are potentially biased. For example, Ontario residents have a substantially higher prevalence of cancer and this may be driving a reduction in therapy time. A number of sensitivity analyses were constructed for different subpopulations. For example, there were no significant differences in the findings for any payer when cancer and terminal residents were excluded. Full sample results that did not
19 limit the sample population to the first 90 days of therapy provided identical results for the D2 estimate. The D2 interaction provided larger and more significant results in models limited to the
Medicare, Medicaid and Ontario payers. Selecting only admission assessments provided analogous results to those presented here (few residents in the present study have multiple observations since the present sample excludes subsequent quarterly assessments that occur after
90 days). The results presented here are more conservative than the full sample results and are not significantly different from any results that could be obtained by excluding or including residents with observable characteristics that suggested potential collinearity problems.
Conclusions and Discussion
The present findings indicate that providers respond to economic incentives in the delivery of rehabilitation services. The change in the Medicare payment system from a cost-based to a case- mix system resulted in higher access for physical therapy but decreased weekly therapy time for both occupational and physical therapy. Medicare cost-based and privately-insured residents in
Michigan and global budget residents in Ontario are most likely to receive rehabilitation care.
Under fee-for-service payment, Medicaid residents are less likely to receive therapy than private- pay, cost-based, and Ontario residents. In Ontario facilities, more residents receive ancillary rehabilitation therapy, but the duration of this therapy is less than that given to Michigan nursing home residents. Our interpretation of the Ontario (global budget) result is consistent with the allocation of a fixed amount of resources by providing less therapy to more residents. It could also be consistent with higher entry criteria for admission to Ontario chronic hospitals coupled with strict budgetary limits. However, as shown in Table 1, residents in Ontario had fewer diagnoses than those in the US . The effect of global budgets (in Ontario) is to provide
20 rehabilitation therapy to more residents and to provide a lower average therapy time. These interpretations can only be validated with a prospective study of nursing home applicants including those who are not admitted to nursing homes or CCC facilities.
Comparisons of rehabilitation therapy for Medicare residents, modeled before and after the implementation of case-mix payment, are identified with a consistent population and avoid any selection bias; a situation not shared when other payment groups are compared. While an extensive array of demographics, diagnoses and conditions are included in these analyses, the cross-sectional payer differences still may be biased by unobserved differences in residents.
Whether or not other undocumented clinical conditions or unobserved factors are associated with rehabilitation therapy cannot be determined from the available data. Our results must be interpreted with this caution. On the other hand few diagnostic differences appeared systematically to differentiate private-pay from Medicaid or Ontario residents, which lends some credence to the results. Furthermore, where there appeared to be systematic differences (e.g., cancer residents in Ontario), our results did not change when we excluded these populations in our sensitivity analyses.
Resident and staff prognosis for rehabilitation potential were both significant in predicting rehabilitation treatments. Few diagnostic characteristics were consistently significant in all models, which might be due to substantial diagnostic heterogeneity in the non-elderly resident population. Low physical and cognitive functioning were negatively related to receiving rehabilitation therapy. This suggests that residents with higher functional status are given a higher priority for receiving rehabilitation treatments.
21 This study has several further limitations. The data represent residents from only two jurisdictions and only CCC facilities are included in the Ontario data. Only non-elderly residents are included in the sample and the results cannot be generalized to the elderly nursing home population. The cross-sectional design of this study does not allow us to identify changes in resident care for specific individuals. The results do not indicate that care for a given resident would change if a resident's payment source changes from private to public or vice-versa. The study population does not include individuals who were not admitted to nursing homes and hence the results do not specify whether the facilities select residents for rehabilitation at the point of admission or after admission to the nursing home. The Ontario sample may be biased toward facilities with higher intensity of care. The present results also do not fully control for the potential of facility level specialization based on payment source, rehabilitation, or age. A recent study of the under 65 nursing home population in the U.S. found no evidence for resident sorting based on age.26 An examination of Canadian facility distributions similarly showed no evidence for specialization in non-elderly residents (results available from authors). This is not surprising since non-elderly residents are relatively rare and few areas could generate sufficient demand to make such specialization economically viable for providers.
Policy Implications
Our results suggest that nursing home facilities will provide higher levels of rehabilitation when costs can be fully recouped (i.e. through cost-based payment). The change to case-mix payment for the Medicare program provided additional payment for rehabilitation therapy, but limited the maximum reimbursement for rehabilitation care. This policy change led to increased use of
22 physical therapy but a reduction in the total amount of therapy time given to residents. After case-mix payment, non-elderly Medicare residents continued to receive more therapy than private-pay residents. If higher levels of therapy are associated with quicker discharge to community settings, cost-based payment would be preferred. Global budgets in Ontario were associated with greater access to rehabilitation therapy, but less therapy time than U.S. residents.
Future research should examine whether nursing homes distinguish between residents on admission, within the nursing home, or both. Furthermore, the impact of rehabilitation therapies on resident outcomes is not examined in the current study, but is an important area for future research. Knowing which method of payment leads to the highest resident outcomes, and understanding the process by which different outcomes are achieved are additional criteria for evaluating the effect of nursing home payment policy.
23 References
1. Liu K, Manton KG. The characteristics and utilization pattern of an admission cohort of
nursing home patients. Gerontologist. 1984;24:70-76.
2. Murray PK, Singer ME, Fortinsky R, Russo L, Cebul RD. Rapid growth of rehabilitation
services in traditional community-based nursing homes. Archives of Physical Medicine and
Rehabilitation. 1999;80:372-378.
3. Kramer AM, Steiner JF, Schlenker RE, Eilertsen TB, Hrincevich CA, Tropea DA,
Ahmad LA, Eckhoff DG. Outcomes and costs after hip fracture and stroke: A comparison of
rehabilitation settings. JAMA. 1997;277:396-404.
4. Joseph CL, Wanlass W. Rehabilitation in the nursing home. Clinics in Geriatric
Medicine. 1993;9:859-871.
5. Indredavik B, Bakke F, Slordahl, Rokseth R, Haheim LL. Treatment in a compbined
acute and rehabilitation stroke unit: Which aspects are most important? Stroke. 1999;30:917-
923.
6. Langhorne P, Williams BO, Gilchrist W, Howie K. Do stroke units save lives? Lancet.
1993;342:395-398.
7. Kosasih JB, Borca HH, Wenninger WJ, Duthie E. Nursing home rehabilitation after acute
rehabilitation: Predictors and outcomes. Archives of Physical Medicine & Rehabilitation.
79:670-673.
8. Berg K, Sherwood S, Murphy L, Carpenter GI, Gilgen R, Phillips CD. Rehabilitation in
nursing homes: A cross-national comparison of recipients. Age and Ageing. 1997;23(2
supp.):37-42.
24 9. Centers for Medicare and Medicaid Services. 2000 National Health Care Expenditures;
Table 7: Nursing Home Care Expenditures Aggregate and per Capita Amounts and
Percent Distribution, by Source of Funds: Selected Calendar Years 1980-2000. [online]
Available: http://www.cms.hhs.gov/statistics/nhe/historical/t7.asp (July 4, 2002).
10. Cohen JW and Spector WD. The effect of Medicaid reimbursement on quality of care in
nursing homes. Journal of Health Economics. 1996;15:23-48.
11. Cohen JW and Dubay LC. The effects of Medicaid reimbursement method and ownership on
nursing home costs, case mix and staffing. Inquiry. 1990;27:183-200, Summer.
12. Schlenker RE, Kramer AM, Hrincevich CA, Eilertsen. Rehabilitation costs: Implications for
prospective payment. Health Services Research. 1997;32:651-668.
13. Goldstein B, Hammond M. Physical medicine and rehabilitation. JAMA. 1997;277:1891-
1892.
14. Harada N, Shoshanna S, Kominski G. Functional status outcomes in rehabilitation:
Implications for prospective payment. Medical Care. 1993;31:345-357.
15. Coburn AF, Fortinsky R, McGuire C, McDonald TP. Effect of prospective reimbursement on
nursing home costs. Health Services Research. 1993;28:45-68.
16. Scanlon WJ. Possible reforms for financing long-term care. Journal of Economic
Perspectives. 1992;6:43-58.
17. Swan J, Harrington C, Grant L, Luehrs J, Preston S. Trends in Medicaid Nursing Home
Reimbursement: 1978-89. Health Care Financing Review. 1993;14:111-132.
18. McSweeney MH., Aarhus LV Jr. Employer-Sponsored Group Long Term Care Insurance:
Did HIPAA Matter? Final Report. Brookfield (WI): International Foundation of Employee
Benefit Plans; 1999.
25 19. Murtaugh CM, Cooney LM, DerSimonian RR, Smits HL, Fetter RB. Nursing home
reimbursement and the allocation of rehabilitation therapy resources. Health Services
Research. 1988;23:467-493.
20. Pollack H, and Zeckhauser R. Budgets as Dynamic Gatekeepers, Management Science
1996;42:642-658.
21. Babazono A, Hillman AL. A comparison of international health outcomes and health care
spending. International Journal of Technology Assessment in Health Care. 1994;10:376-381.
22. Medicare Coverage of Skilled Nursing Facility Care. Centers for Medicare and Medicaid
Services. DHHS Publication No. CMS 10153. Baltimore, MD: April 2002.23. Taylor VM,
Anderson GM, McNeney B, Diehr P, Lavis JN, Deyo RA, Bombardier C, Malter A, Axcell
T. Hospitalizations for back and neck problems: a comparison between the Province of
Ontario and Washington State. Health Services Research. 1998;33:929-45.
24. Verrilli DK, Berenson R, Katz SJ. A comparison of cardiovascular procedure use between
the United States and Canada. Health Services Research. 1998;33:467-87.
25. Miller RH. Containing use and expenditures in publicly insured long-term care programs.
Health Care Financing Review. 1993;14:181-207.
26. Rouleau JL, Moye LA, Pfeffer MA, Arnold JM, Bernstein V, Cuddy TE, Dagenais GR.
Geltman EM, Goldman S, Gordon D. A comparison of management patterns after acute
myocardial infarction in Canada and the United States. New England Journal of Medicine.
1993;328:779-84.
27. Lavie CJ, Milani RV, Cassidy MM, Gillialand YE. Effects of cardiac rehabilitation and
exercise training programs in women with depression. The American Journal of Cardiology.
1999;83:1480-1483.
26 28. Fries BE, Wodchis WP, Buttar A, Blaum C, Morris JN, Drabek J. Characteristics of Nursing
Home Resident Under Age 65. Report to the Health Care Financing Administration. June
2000.
29. Morris JN, Fries BE, Morris SA. Scaling ADL’s Within the MDS. Journal of Gerontology:
Medical Science. 1999;54:M546-553.
30. Morris JN, Nonemaker S, Murphy K, Hawes C, Fries BE, Mor V, Phillips C. Commitment to
change: revision of HCFA’s RAI. Journal of the American Geriatrics Society. 1997;45:1011-
1016.
31. Sgadari, A., Morris, J.N., Fries, B.E., Ljunggren, G., Jònsson, P., DuPasquier, J.N., Schroll,
M. Efforts to establish the reliability of the RAI. Age and Ageing. 1997;26:27-30.
32. Frederiksen K, Tariot P, De Jonghe E. Minimum Data Set Plus (MDS+) scores compared
with scores from five rating scales. Journal of the American Geriatrics Society 1996;44:305-
312.
33. Hawes C, Morris JN, Phillips CD, Mor V, Fries BE, Nonemaker S. Reliability estimates for
the Minimum Data Set for Nursing Home Resident Assessment and Care Screening (MDS).
The Gerontologist 1995;35:172-178.
34. Williams BC, Li Y, Fries BE, Warren RL. Predicting patient scores between the functional
independence measure and the minimum data set: development and performance of a FIM-
MDS "crosswalk". Archives of Physical Medicine & Rehabilitation. 1997;78:48-54.
35. Hartmaier SL, Sloane PD, Guess HA, Koch GC. Validation of the Minimum Data Set
Cognitive Performance Scale: agreement with the Mini-Mental State Examination. Journal of
Gerontology: Medical Sciences, 1995;50A: M128-M133.
27 36. Hall KM, Cohen ME, Wright J, Call M, Werner P. Characteristics of the Functional
Independence Measure in traumatic spinal cord injury. Archives of Physical Medicine &
Rehabilitation. 1999;80:1471-1476.
37. McKinley WO, Jackson AB, Cardena DD, DeVivo MJ. Long-term medical complications
after traumatic spinal cord injury: a regional model systems analysis. Archives of Physical
Medicine & Rehabilitation. 1999;80:1402-1410.
38. Webb CR, Wrigley M, Yoels W, Fine PR. Explaining quality of life for persons with
traumatic brain injuries 2 years after injury. Archives of Physical Medicine & Rehabilitation.
1995;76:1113-1117.
39. Whitlock JA, Hamilton BB. Functional outcome after rehabilitation for sever traumatic brain
injury. Archives of Physical Medicine & Rehabilitation. 1995;76:1103-1112.
40. Segal ME, Whyte J. Modeling case mix adjustment of stroke rehabilitation outcomes.
American Journal of Physical Medicine & Rehabilitation. 1997;76:154-161.
41. Gibbon B. Stroke care and rehabilitation. Nursing Standard. 1996;11:51-56.
42. Bonar SK, Tinetti ME, Speechley M, Cooney LM. Factors associated with short- versus
long-term placement among community-living hip fracture patients. Journal of the American
Geriatrics Society. 1990;38:1139-1144.
43. Ades PA, Maloney A, Savage P, Carhart RI. Determinants of physical functioning in
coronary patients: Response to cardiac rehabilitation. Archives of Internal Medicine.
1999;159:2357-2360.
44. Cohen RA, Moser DJ, Clark MM, Aloia MS, Cargill BR, Stefanik S, Albrecht A, Tilkemeier
P, Forman DE. Neurocognitive functioning and improvement in quality of life following
participation in cardiac rehabilitation. American Journal of Cardiology. 1999:83:1374-1278.
28 45. Dubach P, Myers J, Dziekan G, Goerre S, Buser P, Laske A. Effect of residential cardiac
rehabilitation following bypass surgery: Observations in Switzerland. Chest. 1995;108:1434-
1439.
46. Yoshioka H. Rehabilitation for the terminal cancer patient. American Journal of Physical
Medicine & Rehabilitation. 1994;73:199-206.
47. Asikainen I, Kaste M, Sarna S. Early and late posttraumatic seizures in traumatic brain injury
rehabiliations patients: brain injury factors causing late seizures and influence of seizures on
long-term outcome. Epilesia. 1999;40:584-589.
48. Talo S, Hamalainen A, Kervila A, Kallio V. Mental health and functioning: a case analysis of
rehabilitation patients. International Journal of Rehabilitation Research. 1993;16:221-231.
49. Montgomery P, Kitten M, Niemiec C. The agitated patient with brain injury and the
rehabilitation staff: Bridging the gap of misunderstanding. Rehabilitation Nursing.
1997;22:20-23.
50. Fries BE, Schneider DP Foley JW, Gavazzi M, Burke R, Cornelius E. Refining a case-mix
measure for nursing homes: Resource Utilization Groups (RUG-III) Medical Care
1994;32:668-685.
29 Table 1. Resident Rehabilitation Therapy and Demographics by Payer
Payer Private-pay Medicare Medicare Insurance Medicaid Ontario Payment Method W.T.P. Cost-based Case-mix Cost-based F.F.S. Global N 104 934 1136 203 648 2164 Prevalence of therapy Occupational therapy 33% 66% 72% 68% 15% 41% Physical therapy 35% 72% 76% 68% 19% 57% Either 38% 75% 81% 73% 22% 63% Weekly therapy minutes: Mean(std) * Occupational therapy 161 (111) 246 (140) 183 (89) 208 (101) 175 (113) 107 (100) Physical therapy 156 (122) 256 (141) 191 (97) 229 (103) 178 (101) 129 (101) Rehabilitation potential Resident believes 16% 45% 48% 60% 11% 27% Staff believes 27% 52% 57% 63% 17% 25% Function: Mean (std) ADL scale† 3.4 (1.7) 3.1 (1.8) 3.3 (1.8) 3.5 (2.1) 3.3 (1.9) 3.6 (2.1) CPS† 2.3 (1.9) 1.4 (1.7) 1.6 (1.8) 1.3 (2.0) 2.3 (2.0) 2.0 (2.1) Nursing intensity‡ 1.1 (0.4) 1.2 (0.4) 1.3 (0.4) 1.3 (0.5) 1.1 (0.5) 1.3 (0.5) Demographics Age at admission 49 (20) 50 (17) 53 (14) 51 (13) 50 (15) 52 (12) Admit from hospital 32% 84% 85% 83% 38% 74% Assessment LOS 11 (12) 10 (10) 10 (12) 10 (11) 9 (14) 14 (12) Female 56% 49% 50% 53% 50% 49% Married 29% 23% 26% 47% 17% 47% Resident behavior Wandering 38% 17% 19% 18% 26% 24% Verbally abusive 5% 6% 6% 4% 10% 9% Inappropriate 13% 7% 6% 5% 12% 9% Resident diagnoses & conditions Fall 45% 35% 35% 36% 25% 24% Hip fractures 3% 6% 5% 5% 2% 5% Other fracture 3% 7% 7% 4% 3% 6% Quad/paraplegia 3% 5% 6% 5% 8% 6% Hypertension 38% 47% 45% 47% 26% 15% PVD 3% 11% 11% 9% 7% 5% Other cardiac 17% 34% 33% 24% 20% 14% Stroke 18% 22% 22% 16% 15% 16% Parkinson's 4% 2% 3% 1% 3% 1% Traumatic brain injur. 1% 1% 2% 6% 2% 4% Manic depression 0% 3% 3% 1% 2% 2% Multiple sclerosis 8% 6% 7% 4% 7% 7% Emphysema/COPD 12% 19% 19% 13% 10% 8% Comatose 1% 0% 1% 3% 2% 2% Cancer 10% 10% 8% 13% 7% 34% Terminal prognosis 4% 4% 4% 3% 4% 25% * Average Weekly Therapy Time for residents who do receive therapy; † range (0,6); ‡ range (0.39,3.97)
30 Table 2. Logistic Regression Results for Receipt of Rehabilitation Therapy
Receives Receives Occupational Therapy Physical Therapy Odds Ratio (95% C.I.) Odds Ratio (95% C.I.)
Medicare*Case-mix 1.48 (1.13,1.93) *** 1.21 (0.91,1.62)
Case-mix indicator 0.88 (0.74,1.04) 0.98 (0.82,1.17) Entry age 1.00 (0.99,1.00) 1.00 (1.00,1.01) Female 1.10 (0.97,1.26) 1.08 (0.94,1.25) Admission from hospital 1.21 (1.03,1.42) ** 1.53 (1.30,1.80) *** Length of Stay (log) 1.54 (1.39,1.71) *** 1.48 (1.33,1.64) *** Entry assessment 3.30 (2.23,4.90) *** 3.44 (2.31,5.13) *** Rehab. Pot. - Resident 1.65 (1.38,1.98) *** 1.79 (1.46,2.19) *** Rehab. Pot. - Staff 2.23 (1.87,2.66) *** 2.64 (2.17,3.22) *** ADL 0.89 (0.85,0.93) *** 0.81 (0.77,0.85) *** CPS 0.90 (0.86,0.94) *** 0.86 (0.82,0.89) *** Nursing intensity index 3.57 (2.93,4.34) *** 6.59 (5.23,8.30) *** Wandering 0.89 (0.73,1.08) 0.74 (0.60,0.91) *** Inappropriate behavior 1.04 (0.77,1.39) 0.91 (0.68,1.24) Fall 1.58 (1.35,1.83) *** 1.85 (1.57,2.19) *** Hip Fracture 0.87 (0.63,1.19) 2.24 (1.46,3.45) *** Other fractures 1.10 (0.82,1.47) 1.17 (0.84,1.64) Quad/paraplegia 0.58 (0.44,0.77) *** 0.42 (0.32,0.57) *** Hypertension 1.36 (1.16,1.60) *** 1.21 (1.02,1.45) ** PVD 0.79 (0.59,1.06) 0.69 (0.50,0.94) ** Cardiovascular 1.20 (0.99,1.46) * 1.09 (0.88,1.35) Stroke 1.47 (1.22,1.78) *** 1.55 (1.26,1.90) *** Parkinson's 1.44 (0.90,2.31) 1.26 (0.76,2.09) TBI 1.22 (0.82,1.82) 1.33 (0.88,2.03) Bipolar 1.50 (0.97,2.33) * 0.79 (0.50,1.25) MS 1.04 (0.79,1.36) 0.69 (0.52,0.92) ** Emphysema 0.94 (0.77,1.15) 1.25 (1.00,1.55) * Comatose 0.47 (0.25,0.90) ** 0.47 (0.25,0.88) ** Cancer 0.91 (0.74,1.12) 0.72 (0.58,0.89) *** Terminal 0.65 (0.51,0.83) *** 0.47 (0.36,0.60) *** N 5189 5189 2 statistic 1781.06 *** 2172.80 *** ‘c’ statistic 0.818 0.853 ***p<0.01, **p<0.05, * p<0.10
31 Table 3. Linear Regression Results for Weekly Rehabilitation Therapy Minutes
Log of Weekly Log of Weekly Occupational Therapy Physical Therapy Minutes Minutes Parameter Estimate Parameter Estimate (std.err.) (std.err.)
Medicare*Case-mix -0.27 (0.06) *** -0.25 (0.05) ***
Case-mix indicator 0.01 (0.04) -0.04 (0.04) Entry age 0.00 (0.00) 0.00 (0.00) Female 0.07 (0.03) ** 0.04 (0.03) Admission from hospital 0.04 (0.04) 0.10 (0.03) *** Length of Stay (log) 0.17 (0.03) *** 0.15 (0.02) *** Admission assessment 0.49 (0.10) *** 0.33 (0.09) *** Rehab. Pot. - Resident 0.07 (0.04) * 0.11 (0.03) *** Rehab. Pot. - Staff 0.15 (0.04) *** 0.11 (0.03) *** ADL -0.03 (0.01) *** -0.07 (0.01) *** CPS -0.01 (0.01) -0.05 (0.01) *** Nursing intensity index 0.20 (0.05) *** 0.37 (0.04) *** Wandering -0.06 (0.04) -0.11 (0.04) *** Inappropriate Behavior 0.01 (0.07) 0.11 (0.06) * Fall 0.06 (0.03) * 0.05 (0.03) * Hip Fracture 0.03 (0.06) 0.05 (0.05) Other fractures -0.17 (0.06) *** -0.02 (0.05) Quad/paraplegia -0.07 (0.07) -0.12 (0.06) ** Hypertension 0.06 (0.03) * 0.03 (0.03) PVD -0.01 (0.06) -0.05 (0.05) Cardiovascular 0.00 (0.04) 0.00 (0.03) Stroke 0.17 (0.04) *** 0.10 (0.03) *** Parkinson's 0.05 (0.09) 0.10 (0.08) TBI 0.03 (0.09) 0.10 (0.08) Bipolar 0.00 (0.08) -0.03 (0.08) MS 0.10 (0.06) * -0.06 (0.05) Emphysema -0.07 (0.04) * -0.10 (0.04) *** Comatose -0.07 (0.19) -0.14 (0.15) Cancer -0.15 (0.05) *** -0.19 (0.04) *** Terminal -0.35 (0.06) *** -0.50 (0.06) *** Intercept 3.65 (0.20) *** 3.78 (0.18) *** N 2593 3063 F-statistic 35.14 *** 42.39 *** R-square 0.30 0.31 ***p<0.01, **p<0.05, * p<0.10
32