Overview: Medicare post-acute care since the Balanced Budget Act of 1997

Abstract

The Balanced Budget Act (BBA) of 1997 contained the most sweeping changes in payment policy for Medicare post-acute care (PAC) services ever enacted in a single piece of legislation. Research on the early impacts of these changes is now beginning to appear, and this issue of the Health Care Financing Review includes six articles covering a range of timely PAC issues. There are two articles on skilled nursing facility (SNF) care—the first by Chapin White, Steven D. Pizer, and Alan J. White and the second by Kathleen Dalton and Hilda A. Howard. These are followed by two articles on home health care by Harriet Komisar and Nelda McCall, Jodi Korb, Andrew Petersons, and Stanley Moore. The next article in this issue by Susan E. Bronskill, Sharon-Lise T. Normand, and Barbara J. McNeil examines PAC use for Medicare patients following acute myocardial infarction. The last article by Jerry Cromwell, Suzanne Donoghue, and Boyd H. Gilman considers methodological issues in expanding Medicare's definition of transfers from acute hospitals to include transfers to PAC settings. To help the reader understand the impacts of the BBA changes in payment policy, we present data on Medicare utilization trends from 1994-2000 for short-stay inpatient hospital care and each of the major PAC services—SNF, home health, inpatient rehabilitation, and long-term care hospital (Figures 1 and 2). Utilization is measured as the volume of services (days of care for the institutional settings and visits for home health) per 1,000 Medicare beneficiaries. Medicare managed care enrollees and their service utilization are excluded.

Figure 1. Medicare Utilization Rates for Short-Stay Hospitals, Skilled Nursing Facilities, and Home Health Agencies: 1994-2000

Figure 2. Medicare Utilization Rates for Inpatient Rehabilitation Facilities and Long-Term Care Hospitals: 1994-2000

Figure 3. Trends in Physical Therapy Visits: 1996-1999