The Effect of Medicare's Payment System for Rehabilitation Hospitals on Length of Stay, Charges, and Total Payments

In the past decade, the field of inpatient rehabilitation has grown dramatically. From 1986 through 1994, the number of Medicare-certified rehabilitation hospitals and units increased by 87 percent, from 545 to 1019. 1 In addition, between 1985 and 1989, the annual percentage of all patients discharged from rehabilitation hospitals whose care was paid for by Medicare increased from 39 to 65 percent, 2 suggesting that much of this growth has been fueled by payments from the Medicare program. Although rates of hospitalization for acute care among Medicare beneficiaries decreased by 10 percent between 1986 and 1993, the annual rate of hospitalization for . . .