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Medical Care Research and Review
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Subacute Care, Medicare Benefits, and Nursing Home Behavior

William E. Aaronson

Temple University

Jacqueline S. Zinn

Temple University

Michael D. Rosko

Widener University

Two policy changes in 1988, one administrative and one legislative, allowed greater Medicare coverage of subacute care in skilled nursing facilities (SNFs). The Medicare Catastrophic Coverage Act (MCCA) of 1988, in conjunction with an administrative directive, or transmittal, from the Health Care Financing Administration (HCFA), changed the Medicare SNF benefit structure substantially. In this study, we specified a simultaneous equation system to explain the effects of the benefit changes on Medicare use. The results suggest that the two policychanges increased Medicare use in Pennsylvania SNFs substantially; however, the increase was associated with facility and case mix characteristics, which suggest that the increase was largely attributable to reclassification of current patients from other payer categories, Medicaid and self-pay, rather than new admissions. The effects of the MCCA and the HCFA transmittal on increased Medicare use were unanticipated and have important implications for the way in which subacute care is defined and financed infuture benefit discussions.

Medical Care Research and Review, Vol. 52, No. 3, 364-388 (1995)
DOI: 10.1177/107755879505200303


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