Intensive Rehabilitation for Post-Acute Rehabilitation Services: The Impact of Value-Based Regulatory Change on Service Delivery

Abstract

The United States healthcare system is the "most heavily regulated enterprise in the world."^[1]  The extensive and ever-changing composition of this regulation "arises from an unruly mix of state and federal agencies and mutations of statutes and common-law doctrines."^[2]  It is a system inundated by the breadth and interaction of the various tiers of regulations that implicate all domains of healthcare and health law.^[3]  Health law components, from a public health perspective, can be summarized into health quality, autonomy, access, and cost.^[4]  Although well intended, to promulgate laws for the benefit of the public's health, regulation can often have an opposite effect on healthcare service domains of quality, autonomy, access, and cost.^[5]  Regulation resulting in healthcare outcomes opposite of legislative intent is most readily evident for rehabilitation services within the post-acute healthcare segment.^[6]  Within a highly regulated environment with limited quality outcomes to show for the rising cost of services provided, the value of post-acute rehabilitation services may seem questionable.^[7]

Post-acute rehabilitation services are provisioned to facilitate patient physical, occupational, speech, language, swallowing, and/or, cognitive limitation recovery to the maximum of the patients' potential with Medicare remaining as the largest payer of rehabilitation services.^[8]  Designed to constrain post-acute entity setting costs, post-acute care services regulation has influenced rehabilitation services delivery in ways that may not be in the best interest of the patient, nor clinically meaningful.^[9]  Post-acute regulation's manipulation of rehabilitation services delivery injects challenges into salient evaluation of the true value of the services provided.^[10]  Most palpably evident regulatory influencers being 75%, now 60%, and 3-hour therapy rules for Inpatient Rehabilitation Facilities (IRF), 3 day prior hospitalization and 720 minute therapy RUG IV category for Skilled Nursing Facilities (SNF), 4 visit therapy Low Utilization Payment Adjustment (LUPA) for home health agencies (HH), and 25 day length of stay requirement for Long Term Care Hospitals (LTACH).^{[11] [12]}  However, these are just a few among the many stringent regulations that have incentivized fee-for-service behaviors and distracted from clinical decision-making.

Because post-acute rehabilitation services have been easily manipulated by fee-for-service regulation incentives, it will be significantly impacted as post-acute regulation shifts to value-based care.^[13]  In the shift from fee-for-service to value-driven care, there will be a substantial effect on current post-acute business models via reduction in utilization of therapies and diminishment of direct rehabilitation services impact in functional improvement outcomes and reimbursement.  Through the lens of healthcare quality, autonomy, access, and cost, this analysis will explore industry behavior and provide considerations in response to this value-based regulatory change.

[1] Showalter, J. S. (2015). The Law of Healthcare Administration, Seventh Edition. Health Administration Press.

[2] Hall, M. A. (2006).  The History and Future of Health Care Law:  An Essentialist View.  Wake Forest Law Review, 341, 347-64.

[3] American Hospital Association (AHA).  Regulatory overload:  Assessing the regulatory burden on health systems, hospitals, and post-acute care providers, (2017).

[4] Hall, M.A. (2006), pg. 355

[5] Hall, M.A. (2006), pg. 355

[6] American Hospital Association (AHA). (2017). Regulatory overload:  Assessing the regulatory burden on health systems, hospitals, and post-acute care providers.

[7] Medicare Payment Advisory Commission (MedPAC). (2009).  Healthcare Spending and the Medicare Program:  A Data Book. Washington, DC:  Medicare Payment Advisory Commission; 125; chart 9-3.

[8] Dejong, G. et. al. (2002).  Assessing the Field of Disability Research. National Rehabilitation Hospital Center for Health and Disability Research.  Milbank Quarterly, Vol. 80, No. 2,

[9] Bettger, J. & Stineman, M. (2007). Effectiveness of Multidisciplinary Rehabilitation Services in Post-Acute Care:  State-of-the-Science. A Review.   Archives Physical Medicine Rehabilitation, 88(11): 1526-1534.

[10] Bettger, J. & Stineman, M. (2007).  Effectiveness of Multidisciplinary Rehabilitation Services in Post-Acute Care:  State-of-the-Science.  A Review.  Archives Physical Medicine Rehabilitation, 88(11): 1526-1534.

[11] Medicare Payment Advisory Commission (MedPac). (2014).  Report to the Congress:  Medicare Payment Policy. Retrieved from:  http://www.healthwatchusa.org/HWUSA-Presentations-Meeting/20160720-TerrieMorgan/Medpac%20report%202014.pdf.

[12] Department of Health and Human Services, Centers for Medicare and Medicaid Services.  (2015).  Preventing Inappropriate Payments on Home Health Low Utilization Payment Adjustment Claims, MLN Matters:  MM 9027.

[13] Azar, A. (2018).  Remarks on Value-Based Transformation for Post-Acute Care.  American Health Care Association.