Measuring function for medicare inpatient rehabilitation payment

Health Care Financing Review, Spring, 2003 by Grace M. Carter, Daniel A. Relles, Gregory K. Ridgeway, Carolyn M. Rimes

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Case-Mix Groups

Within each RIC, CART was used to create groups that meet the IRF PPS mandate--specifically groups defined by age, modified motor score, and cognitive score that are relatively homogeneous with respect to resource use. The groups were subsequently divided based on comorbidity tiers. (7)

Certain considerations beyond the ability to predict cost entered into the decisions that created the case-mix groups. CMS decided that the groups should be defined so that they have monotone weights in the FIM[TM] scores--i.e., that if two patients are in different groups and differ only on one scale, then the hospital should receive a higher payment for the patient with the lower function. This is consistent with the assumption that patients with lower function often require additional resources. By maintaining or increasing payment for patients with lower function, hospitals should have the resources to provide these patients with needed treatment and should have no reason to discriminate against such patients at admission.

The FIM[TM] scales used in the creation of the CMGs were the sum of the 12 FIM[TM] motor items excluding transfer to tub/ shower and the sum of all 5 cognitive items. We recommended that these scales be chosen by CMS after analysis and on the advice of our technical expert panel. (8) In addition to the analyses presented above, we compared case-mix groups created using the original and modified motor score and using the cognitive scale and one that dropped comprehension. Relles, Ridgeway, and Carter (forthcoming) show that the index without transfer to tub was a slightly better predictor of cost than the index with it in all combinations of fitting year and prediction year. The situational nature of the item might allow hospitals to game their response. The technical expert panel agreed that transfer to tub/shower should not affect payment in the form in which it appears on the FIM[TM].

We also analyzed dropping comprehension from the cognitive scale because its relation to cost is opposite to that of the standard cognitive scale in which it is embedded. After fixing a stopping rule, dropping comprehension from the index produces a slightly better prediction in some years. However, eliminating comprehension raises issues related to incentives and fairness. Because the cognitive scale has only a weak relationship to cost, it is used only occasionally in the definition of CMGs. Dropping comprehension does not increase the frequency with which FRGs are defined by cognitive function. When the full cognitive scale is used, the other four items determine the direction of the cognitive effect so that a higher cognitive score results in a lower payment when it has any effect at all. We could eliminate splits that contradict this general result if they were to occur. If we take the comprehension item out of the index, the system will provide no extra incentives to treat patients with lowered comprehension. If some hospitals do spend extra to treat such patients, they would not be compensated for such extra resources. The improvements in predicting cost are so slight that it seemed to us that the decision should be based on clinical judgment about what should be paid for. Based on the advice of our technical expert panel, we recommended keeping the comprehension item in the cognitive score.