Medicare DRGs and post-hospital care for the elderly: does out of the hospital mean out of luck?

Abstract

This article reports findings from a multistate study of the effects of medical cost containment policy, particularly the Medicare DRG (Diagnosis Related Groups) reimbursement policy, on community-based services for the elderly. The study findings reveal that since the implementation of DRGs, more older clients in poorer states of health are seeking posthospital care services. Greater client demand and illness acuity is leading to increases in service refusals to vulnerable clients and the creation of agency waiting lists. The majority of agency directors attribute the declining health status of clients to DRG reimbursement.