Impact of Mental Disorders on Cost and Reimbursement for Patients in Inpatient Rehabilitation Facilities

Deborah Dobrez*, Allen W. Heinemann, Anne Deutsch, Elizabeth M. Durkin, Orit Almagor

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

9 Scopus citations


Dobrez D, Heinemann AW, Deutsch A, Durkin EM, Almagor O. Impact of mental disorders on cost and reimbursement for patients in inpatient rehabilitation facilities. Objective: To determine whether comorbid mental disorders affect inpatient rehabilitation facility (IRF) costs and to examine the extent to which Medicare's prospective payment system reimbursement sufficiently covers those costs. Design: Secondary analysis of Medicare IRF Patient Assessment Instrument files and Medicare Provider and Review files. Payment was compared with costs for patients with and without reported mood, major depression, substance use, or anxiety disorders. The relationships among payment group assignment, comorbidity-related adjustments in payment, and the presence of mental disorders were estimated. Setting: IRFs (N=1334) in the United States. Participants: Medicare fee-for-service beneficiaries (N=1,146,799) discharged from IRFs from 2002 to 2004. Interventions: Not applicable. Main Outcome Measure: IRF costs. Results: Mental disorders were reported for 13% of the Medicare fee-for-service beneficiaries. After controlling for payment group and comorbidity classifications, patients with mood, major depression, or anxiety disorders had significantly greater costs of $433, $1642, and $247 compared with patients without these disorders. The higher cost for patients with major depression (14.9% higher) is sufficient to justify a tier 2 comorbidity classification. Conclusions: A reimbursement adjustment for the presence of a major depressive disorder would bring Medicare reimbursement in line with facility costs. The failure to compensate facilities directly for providing care to patients with major depression may result in reduced access to care for these patients. It also may create a disincentive to meet mental health treatment needs during the rehabilitative episode. Further work is needed to compare costs between patients with and without confirmed mental health disorders, given concerns about the accurate reporting of mental health disorders.

Original languageEnglish (US)
Pages (from-to)184-188
Number of pages5
JournalArchives of physical medicine and rehabilitation
Issue number2
StatePublished - Feb 2010


  • Costs and cost analysis
  • Depression
  • Medicare
  • Mental disorders
  • Prospective payment system
  • Rehabilitation

ASJC Scopus subject areas

  • Physical Therapy, Sports Therapy and Rehabilitation
  • Rehabilitation


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