Impact of the Medicare Short Stay Transfer Policy on patients undergoing major orthopedic surgery

Objective. To examine the impact of the Short Stay Transfer Policy (SSTP) on practice patterns. Data Sources. This study uses data from the Centers for Medicare and Medicaid Services Medicare Provider Analysis and Review (MEDPAR) file, Home Health Standard Analytical File, 1999 Provider of Service file, and data from the 2000 United States Census. Study Design. An interrupted time-series analysis was used to examine the length of stay (LOS) and probability of "early'' discharge to post acute care (PAC). Data Collection. Separate 100 percent samples of all fee-for-service Medicare recipients undergoing either elective joint replacement (JR) surgery or surgical management of hip fracture (FX) between January 1, 1996 and December 31, 2000 were selected. Principal Findings. Prior to implementation of the SSTP. LOS had been falling by 0.37 and 0.30 days per year for JR and FX patients respectively. After implementation of the SSTP, there was an immediate increase in LOS by 0.20 and 0.17 days, respectively. Thereafter, LOS remained flat. The proportion of patients discharged "early'' to PAC had been rising by 4.4 and 2.6 percentage points per year for JR and FX patients respectively, to a peak of 28.8 percent and 20.4 percent early PAC utilization in September 1998. Immediately after implementation of the SSTP, there was a 4.3 and 3.0 percentage point drop in utilization of "early'' PAC. Thereafter utilization of early PAC increased at a much slower rate ( for JR) or remained flat ( for FX). There was significant regional variation in the magnitude of response to the policy. Conclusion. Implementation of the SSTP reduced the financial incentive to discharge patients early to PAC. This was accomplished primarily through longer LOS without meaningful change in PAC utilization. With the recent expansion of the SSTP to 29 DRGs ( representing 34 percent of all discharges), these findings have important implications regarding patient care.