The primary data source for this study was 2006 Medicare claims data. These data provided information on utilization and Medicare payments associated with acute hospital discharges and subsequent PAC. The 2006 Medicare claims files were used to track patterns of PAC use, including PAC service mix, length of stay, payment, and acute hospital readmission rates. The Medicare claims files were used to build episodes of acute plus PAC using inpatient acute care,1 IRF, LTCH, SNF, HHA, and hospital outpatient therapy claims. Physician services during index acute hospitalizations were also included in the analysis.
Each of the index acute hospital claims were run through the Centers for Medicare & Medicaid Services (CMS) Medical Severity Grouper (MS-DRG) version 25.0 to generate an MS-DRG for each claim. Analyses were performed at the MS-DRG level rather than the level of the diagnosis-related group (DRG) in order to mirror current Medicare payment policy following the adoption of the MS-DRG in Fiscal Year 2008 (FY2008).