Physical rehabilitation following Medicare prospective payment for skilled nursing facilities

Health Services Research, Oct, 2004 by Walter P. Wodchis

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Multivariate Results

Logistic regression is used to quantify the effect shown in Figure 1. Non-Medicare residents are included in the sample, identifying the PPS effect specifically for Medicare residents. For the results shown in Table 3, the dependent variable is defined by total rehabilitation therapy minutes within 5 percent of a nodal level of care. Adjusted odds ratios (AOR), 95 percent confidence intervals, and significance levels (based on robust standard errors) are presented. The odds of receiving a nodal level of care (45, 150, 325, 500, 720 minutes of therapy) was higher for Medicare residents than private-pay residents in the pre-PPS period (Medicare coefficient), increased for all residents in the post-PPS period (post-PPS payment coefficient), and increased far more for Medicare residents than private-pay residents (interaction effect). The Ai-Norton direct calculation of the interaction, that is, the differential effect of PPS on nodal therapy for Medicare residents, is a 12 percentage-point increase in the probability of nodal therapy (g-statistic 8.52). These results support the hypothesis that providers are more likely to provide nodal levels of care to Medicare residents under PPS. Additional sensitivity analyses indicate that the interaction effect estimated by the logistic model (1.78) is a representative estimate of the effect size. (4)

Table 4 presents the results examining the effect of PPS payment on the receipt of rehabilitation therapy and weekly therapy time. Adjusted odds ratios are presented for logistic analyses, while the coefficients on bivariate characteristics for the linear regression model can be interpreted approximately as the average percentage difference in rehabilitation time associated with that characteristic in the conditional sample. The Medicare payment term indicates that in the pre-PPS period, the odds of receiving therapy in the Medicare group were 3.7 times the odds in the private pay reference group, and those residents that did receive therapy received, on average, 12 percent more weekly therapy time than those in the reference group. The interaction term indicates that PPS increased the differential advantage in receiving any therapy that is experienced by Medicare residents, but decreased the conditional differential advantage in weekly therapy time by 7 percent.

The Ai-Norton direct estimation of the interaction term is a three percentage-point increase in the probability of therapy (z-statistic = 4.05). Because the effect of PPS on the likelihood of therapy and therapy time have opposite directions, the total effect is difficult to identify from the two-part model. A total effect of PPS was calculated by differencing the expected values for therapy time. The expected values were the product of Ai and Norton's probability estimate of therapy multiplied by the model-estimated therapy time. The total estimated effect of PPS is a 4 percent differential decrease in average expected therapy across all Medicare residents.