Bundling post-acute care (PAC) with Medicare DRG payments: an exploration of the distributional and risk consequences.

This exploratory study simulates the distributional and risk consequences of bundling 60 days' worth of post-hospital, post-acute care (PAC) with the inpatient stay, and paying for both on an all-inclusive, single-free basis. Simulations are conducted using 1987-1988 Medicare claims data from five states, focusing on patients discharged in 14 PAC-intensive diagnosis-related groups (DRGs). In this data, we find that hospital-level risk actually would be reduced if post-acute care were bundled with the DRG payments for inpatient stays.