Original research| Volume 96, ISSUE 11, P1959-1965.e4, November 2015

Impact of Outpatient Rehabilitation Medicare Reimbursement Caps on Utilization and Cost of Rehabilitation Care After Ischemic Stroke: Do Caps Contain Costs?



      To estimate the proportion of patients with ischemic stroke who fall within and above the total outpatient rehabilitation caps before and after the Balanced Budget Act of 1997 took effect; and to estimate the cost of poststroke outpatient rehabilitation cost and resource utilization in these patients before and after the implementation of the caps.


      Retrospective cohort study.


      Medicare reimbursement system.


      Medicare beneficiaries from the state of South Carolina: the 1997 stroke cohort sample (N=2667) and the 2004 stroke cohort sample (N=2679).


      Not applicable.

      Main Outcome Measures

      Proportion of beneficiaries with bills within and above the cap before and after the cap was enacted, and total estimated 1-year rehabilitation Medicare payments before and after the cap.


      The proportion of patients with stroke exceeding the cap in 2004 after the Balanced Budget Act of 1997 was enacted was significantly lower (5.8%) than those in 1997 (9.5%) had there been a cap at that time (P=.004). However, when the proportion of individuals exceeding the cap among both the outpatient provider and facility files was examined, there was a greater proportion of patients with stroke in 2004 (64.6%) than in 1997 (31.9%) who exceeded the cap (P<.0001). The estimated average 1-year Medicare payments for rehabilitation services, when examining only the Part B outpatient provider bills, did not differ between the cohorts (P=.12), and in fact, decreased slightly from $1052 in 1997 to $833 in 2004. However, when examining rehabilitation costs using all available outpatient Medicare bills, the average estimated payments greatly increased (P<.0001) from $5691 in 1997 to $9606 in 2004.


      These findings suggest that billing practices may have changed after outpatient rehabilitation services caps were enacted by the Balanced Budget Act of 1997. Rehabilitation services billing may have shifted from Part B provider bills to being more frequently included in facility charges.


      List of abbreviations:

      CCI (Charlson Comorbidity Index), ICD-9-CM (International Classification of Diseases–9th Revision–Clinical Modifications), SAF (Standard Analytical File)
      To read this article in full you will need to make a payment

      Purchase one-time access:

      Academic & Personal: 24 hour online accessCorporate R&D Professionals: 24 hour online access
      One-time access price info
      • For academic or personal research use, select 'Academic and Personal'
      • For corporate R&D use, select 'Corporate R&D Professionals'


      Subscribe to Archives of Physical Medicine and Rehabilitation
      Already a print subscriber? Claim online access
      Already an online subscriber? Sign in
      Institutional Access: Sign in to ScienceDirect


        • Go A.S.
        • Mozaffarian D.
        • Roger V.L.
        • et al.
        Heart disease and stroke statistics–2014 update: a report from the American Heart Association.
        Circulation. 2014; 129: e28-292
        • Roger V.L.
        • Go A.S.
        • Lloyd-Jones D.M.
        • et al.
        Heart disease and stroke statistics–2011 update: a report from the American Heart Association.
        Circulation. 2011; 123: e18-209
        • Ovbiagele B.
        • Goldstein L.B.
        • Higashida R.T.
        • et al.
        Forecasting the future of stroke in the United States: a policy statement from the American Heart Association and American Stroke Association.
        Stroke. 2013; 44: 2361-2375
        • Kleindorfer D.O.
        • Khoury J.
        • Moomaw C.J.
        • et al.
        Stroke incidence is decreasing in whites but not in blacks: a population-based estimate of temporal trends in stroke incidence from the Greater Cincinnati/Northern Kentucky Stroke Study.
        Stroke. 2010; 41: 1326-1331
        • Schwartz W.B.
        • Mendelson D.N.
        Hospital cost containment in the 1980s. Hard lessons learned and prospects for the 1990s.
        N Engl J Med. 1991; 324: 1037-1042
      1. ResDAC. CMS Research Data Assistance Center. 2013;2013(10/07).

        • Reker D.M.
        • Hamilton B.B.
        • Duncan P.W.
        • Yeh S.C.
        • Rosen A.
        Stroke: who's counting what?.
        J Rehabil Res Dev. 2001; 38: 281-289
        • Deyo R.A.
        • Cherkin D.C.
        • Ciol M.A.
        Adapting a clinical comorbidity index for use with ICD-9-CM administrative databases.
        J Clin Epidemiol. 1992; 45: 613-619
        • Charlson M.E.
        • Pompei P.
        • Ales K.L.
        • MacKenzie C.R.
        A new method of classifying prognostic comorbidity in longitudinal studies: development and validation.
        J Chronic Dis. 1987; 40: 373-383
        • Li B.
        • Evans D.
        • Faris P.
        • Dean S.
        • Quan H.
        Risk adjustment performance of Charlson and Elixhauser comorbidities in ICD-9 and ICD-10 administrative databases.
        BMC Health Serv Res. 2008; 8: 12
      2. Consumer Price Index. Consumer Price Index - Medical Care Services; Databases and Tools Tab. 2012;2012(3/21).

        • Montez-Rath M.
        • Christiansen C.L.
        • Ettner S.L.
        • Loveland S.
        • Rosen A.K.
        Performance of statistical models to predict mental health and substance abuse cost.
        BMC Med Res Methodol. 2006; 6: 53
        • Manning W.G.
        • Basu A.
        • Mullahy J.
        Generalized modeling approaches to risk adjustment of skewed outcomes data.
        J Health Econ. 2005; 24: 465-488
      3. Farrell D, Jensen E, Kocher B, et al. Accounting for the costs of U.S. health care: a new look at why Americans spend more. McKinsey Global Institute; 2008.

        • Andersen R.
        • Newman J.F.
        Societal and individual determinants of medical care utilization in the United States.
        Milbank Mem Fund Q Health Soc. 1973; 51: 95-124