Interrupted Stays

4.2.1 Interrupted Stay Policy and Incentives

The IRF PPS defines an interrupted stay as a stay in which the beneficiary is discharged and returns to the same IRF within 3 consecutive calendar days. The duration of the interrupted stay begins with the day of discharge from the IRF and ends on midnight of the third day. Thus, if the beneficiary is away from the IRF 2 nights or less, the interrupted stay payment rules apply

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Less than 0.1 percent of patients die within 3 days of admission.

1999 2000 2001 2002 1999 2000 2001 2002

Length of

Stay N Cases N Cases N Cases N Cases

% of Total Cases % of Total Cases % of Total Cases % of Total Cases 1 Day 1,679 1,758 1,727 1,240 0.44% 0.43% 0.39% 0.28% 2 Days 2,637 2,987 3,238 2,255 0.68% 0.73% 0.73% 0.52% 3 Days 5,674 6,294 7,066 5,903 1.47% 1.53% 1.60% 1.35% Total Very Short Stay 9,990 11,039 12,031 9,696 2.59% 2.69% 2.72% 2.22% Total Cases 385,457 410,732 442,379 436,822

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and one CMG payment is made for both portions of the stay. If the interruption involves a same day admission and discharge from an acute care hospital, no DRG payment is made to the acute care hospital and the IRF is expected to assume the costs of the same-day acute care services. However, a DRG payment is made if the beneficiary remains overnight at the acute care hospital.

Under the TEFRA system, an IRF, particularly if it was under financial pressure from its TEFRA limit, had an incentive to discharge and re-admit a patient in order to reduce IRF costs and receive “credit” for two discharges. The incentives under the IRF PPS are similar but contain two added incentives: to shift interruptions involving acute care services from same day to overnight stays so that the costs of the services are shifted from the IRF to the acute care hospital and to increase the proportion of interruptions involving at 3 or more nights away from the IRF so that two separate payments will be made for each portion of the stay. Monitoring trends in the same day policies is problematic since pre-PPS policies were not clear regarding how a same day admission and discharge from acute care services should have been billed.

4.2.2 Methods

To obtain an understanding of the trends that have occurred under IRF PPS, we compared the distribution of 0-10 day interruptions in the 1999-2002 bill data (Table 4.2). For the 1999- 2001 stays, we used only the IRF bills to identify interruptions. That is, we counted a bundle each time there was an IRF discharge and readmission to the same facility within 10 days. We found that identifying interruptions in the 2002 data was somewhat problematic and indicative of potential billing problems for these cases. In theory, interruptions that are bundled under the IRF PPS interrupted stay policy should be identifiable only in the IRF PAI since a single bill should be submitted that covers both portions of the stay. However, we also found multiple IRF bills that indicated an interrupted stay that either did not match an IRF PAI or was not reported as an interrupted stay on the IRF PAI. We have included in our counts all interruptions in 2002 that were either reported on the IRF PAI or indicated by multiple bills, regardless of what was

reported on the IRF PAI. The discharge counts are independent of the IRF PPS bundling rules, so that those cases with 0-2 nights away as well as other interruptions are counted as two discharges in the table. Only the first discharge and readmission are shown for cases involving multiple interruptions.

Table 4.2

Distribution of Interrupted Stays: 1999-2002

Note: Each interruption is counted as two discharges.

4.2.3 Volume Trends

Overall, there has been a slight downward trend in the proportion of discharges involving 0-10 nights away from the IRF and readmission to the same facility, from 6.5 percent in 1999 to 5.8 percent in 2002. The distribution of the interruptions has shifted consistent with the PPS bundling incentives. The proportion of interruptions involving two or fewer nights has been cut in half, declining from about 26 percent of all 0-10 night interruptions in the pre-PPS years to about 12 percent in 2002. The anticipated shift between same day and one-night interruptions is not evident; the proportions of same day, one night and two night interruptions all declined.

We looked at the distribution of interruptions by type of provider to determine if there are differences in interrupted stays by key provider characteristics (Table 4.3). Freestanding

hospitals have a higher percentage of interrupted stays lasting up to 10 days (6.7 percent) than units of acute care hospitals (5.5 percent). However, freestanding rehabilitation hospitals have relatively fewer interruptions lasting less than three nights. Interruptions lasting less than three nights constituted 6.8 percent of the interruptions in freestanding hospitals compared to 13.6 percent in units.

Rural hospitals have relatively fewer interruptions (5.0 percent) than urban hospitals (6.0 percent), and a higher proportion of these interruptions are for less than three nights. The pattern

1999 2000 2001 2002 1999 2000 2001 2002 0 0.3% 0.3% 0.3% 0.1% 4.3% 3.7% 4.2% 1.8% 1 0.7% 0.7% 0.7% 0.3% 9.6% 9.2% 9.2% 4.3% 2 0.9% 0.8% 0.8% 0.3% 12.1% 11.6% 11.6% 5.8% 3 1.0% 0.9% 1.0% 1.0% 13.3% 12.9% 13.5% 16.4% 4 1.0% 1.0% 0.9% 1.0% 13.3% 13.4% 13.3% 16.3% 5 0.9% 0.9% 0.9% 0.8% 11.8% 12.4% 12.4% 13.8% 6 0.8% 0.8% 0.8% 0.7% 11.0% 10.9% 10.8% 11.8% 7 0.7% 0.7% 0.6% 0.6% 8.8% 9.0% 8.7% 10.3% 8 0.5% 0.5% 0.5% 0.5% 6.3% 7.0% 7.1% 8.2% 9 0.4% 0.4% 0.4% 0.4% 5.3% 5.3% 5.1% 6.5% 10 0.3% 0.3% 0.3% 0.3% 4.2% 4.3% 4.2% 4.9% 0-2 nights bundles 1.9% 1.8% 1.8% 0.7% 26.0% 24.6% 24.9% 11.9% 0-10 nights interruptions 6.5% 6.5% 6.3% 5.9% 100.0% 100.0% 100.0% 100.0% Total Discharges 393,069 418,249 450,534 460,928 % of Total Discharges

% of Total Interruptions with 0-10 nights away

Interruptions By No. of Nights Away from IRF

No. of Nights Away From IRF

Table 4.3

Distribution of 2002 Interrupted Stays by Hospital Characteristics

*Missing type of ownership for 575 discharges.

Note: Each interrupted stay is counted as two discharges.

All

IRFs Freestanding Units Urban Rural Non-Profit Proprietary Government

0 0.1% 0.0% 0.2% 0.1% 0.1% 0.1% 0.1% 0.2% 1 0.3% 0.2% 0.3% 0.2% 0.3% 0.3% 0.2% 0.4% 2 0.3% 0.2% 0.4% 0.3% 0.3% 0.4% 0.2% 0.4% 3 1.0% 1.1% 0.9% 1.0% 0.8% 1.0% 1.0% 0.9% 4 1.0% 1.2% 0.9% 1.0% 0.7% 0.9% 1.1% 0.9% 5 0.8% 1.0% 0.7% 0.8% 0.7% 0.8% 0.8% 0.7% 6 0.7% 0.9% 0.6% 0.7% 0.5% 0.7% 0.8% 0.6% 7 0.6% 0.7% 0.5% 0.6% 0.5% 0.6% 0.7% 0.5% 8 0.5% 0.6% 0.4% 0.5% 0.4% 0.5% 0.5% 0.4% 9 0.4% 0.5% 0.3% 0.4% 0.3% 0.4% 0.4% 0.3% 10 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.2% 0-2 nights 0.7% 0.4% 0.9% 0.7% 0.8% 0.8% 0.4% 1.1% 0-10 nights 5.9% 6.7% 5.5% 6.0% 5.1% 5.8% 6.2% 5.6% Total Discharges 100.0% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 0 1.8% 0.2% 2.8% 1.8% 2.1% 2.0% 0.9% 3.8% 1 4.3% 2.2% 5.6% 4.1% 6.3% 4.9% 2.4% 7.5% 2 5.8% 3.3% 7.4% 5.7% 6.6% 7.0% 3.3% 7.4% 3 16.4% 16.5% 16.3% 16.4% 16.4% 16.4% 16.5% 15.7% 4 16.3% 17.6% 15.4% 16.5% 14.0% 15.6% 17.4% 16.4% 5 13.8% 14.6% 13.3% 13.8% 14.5% 14.1% 13.6% 12.7% 6 11.8% 13.0% 10.9% 11.9% 10.4% 11.4% 12.7% 10.3% 7 10.3% 11.1% 9.8% 10.4% 9.5% 9.6% 11.6% 9.7% 8 8.2% 9.1% 7.6% 8.1% 8.8% 8.0% 8.8% 6.5% 9 6.5% 7.1% 6.1% 6.6% 5.9% 6.3% 7.1% 5.5% 10 4.9% 5.1% 4.8% 4.9% 5.2% 4.6% 5.6% 4.4% 0-2 nights away 11.9% 5.8% 15.8% 11.6% 15.0% 13.9% 6.6% 18.8% 0-10 nights away 100% 100% 100% 100% 100% 100% 100% 100% No. of Nights Away from IRF

% of total discharges

No. of Nights Away from IRF

% of interruptions with 0-10 nights away from IRF

of interrupted stays also varies by type of ownership. Proprietary hospitals have a somewhat higher proportion of interruptions than non-profits (6.2 percent vs. 5. 8 percent) but a smaller proportion of these last less than 3 nights (6.8 percent vs. 13.6 percent).

4.2.4 Cost Trends

RAND’s implementation report estimated payment-to-cost ratios for interrupted stays under the bundling policies using sample 1998/1999 claims with all the data necessary for simulation (Carter et al., 2002). The simulation suggested that the bundling policy would underpay cases with interruptions lasting less than three nights by about 30 percent. To evaluate how the bundled discharges have actually fared under IRF PPS, we simulated payment-to-cost ratios for the 2002 bundled discharges for which we had the IRF PAI data needed to determine payment. We show in Table 4.4 the number of bundles, length of stay for rehabilitation (that includes both portions of the stay), and the estimated payment-to-cost ratio assuming all stays had been paid under IRF PPS federal rates in 2002. The simulation indicates the expected underpayment has not materialized. On average, the payment-to-cost ratio for cases receiving a bundled payment is 0.93, considerably higher than the 0.70 projected using the 1998/1999 sample data. Nevertheless, there are differences within hospital classes. Despite longer lengths of stay, bundled discharges are paid on average at about cost in freestanding hospitals (1.0) and proprietary hospitals (.98) but are on average unprofitable in units (.88), non-profit (.87), and government (.93) facilities.