Impact of Medicare Payment Reforms on Postacute Care Use and Market Structure

To control growth in spending on postacute care and improve outcomes for hospitalized beneficiaries, Medicare has in recent years launched three new accountable care and bundled payment initiatives that seek to shift financial risk for postacute care services to the hospitals and physicians that refer patients to postacute care providers. This project will develop three comparative market case studies to: 1) document the postacute care strategies that Medicare accountable care organizations and bundled-payment participants have adopted or are developing to contain Medicare spending; and 2) describe providers’ market responses to these strategies and the implications they may have for the quality, use, and cost of postacute services. As Medicare moves from fee-for-service to value-based payment, this research will inform policymakers and health systems about how the new reforms are affecting a critical component of the care continuum for older adults.