Press release



The Centers for Medicare & Medicaid Services (CMS) today announced the next phase in a demonstration program evaluating the care that Medicare beneficiaries receive after being discharged from a hospital and how CMS pays for that care.

CMS has chosen the geographic areas where data will be collected for this project will take place.  The first two markets include Boston, Chicago, and their surrounding areas. CMS is beginning to identify specific providers within these markets to invite to participate in the Post Acute Care Payment Reform Demonstration (PAC-PRD).

Currently, Medicare pays for beneficiaries’ care based on where the beneficiary receives health care services.  Different types of health care providers (for example, in a skilled nursing facility or a home health agency) are paid in different ways even if the services they offer or the patients they treat may be similar.  This has resulted in financial incentives for health care providers to transfer patients from one post-acute care setting to another based on financial considerations.

The PAC-PRD was mandated by Congress in the Deficit Reduction Act of 2005 to collect and compare consistent information about the health of beneficiaries and the care or clinical services received across the various types of health care providers and should help CMS better understand these patients and providers.

CMS will invite participants from acute care hospitals and four locations where patients may be treated after leaving the hospital -- Long Term Care Hospitals (LTCHs), Inpatient Rehabilitation Facilities (IRFs), Skilled Nursing Facilities (SNFs), and Home Health Agencies (HHAs).  Recommendations generated by the demonstration program will be included in a report to Congress that also is mandated as part of the same law.   

“Our goal is to develop a system that is better integrated and more flexible in meeting the needs of our beneficiaries,” said CMS Acting Administrator Kerry Weems. “This demonstration is a good first step in developing a comprehensive system focused on helping the patient get the most appropriate health care setting, rather than the setting where payment is highest.”

          CMS has contracted with Research Triangle Institute (RTI) International to carry out this demonstration.  RTI will collect data in ten distinct parts of the country.  Selection of the ten demonstration markets was determined by a variety of factors, including population density, geographic area, the presence of different types of PAC providers, and the availability of volunteer providers in each market area. 

          The ten markets identified for primary recruitment and the nine markets identified as alternatives are centered on cities, but recruited facilities may be located within a two hour radius to include nearby suburban and rural areas.  If for some reason, it is not possible to recruit an adequate sample of volunteers in a given market, recruitment will be attempted in an identified alternative market.

The selection of providers in each market will depend on organizational characteristics such as corporate ownership, profit status, hospital affiliation and size, the ability to recruit other providers in the same referral network, and the need to recruit a representative sample.  CMS will attempt to recruit a sample that is representative of the range of post-acute service providers across the country.

Providers in the primary and alternative markets are encouraged to participate in this demonstration.  Volunteers are still being accepted. 

RTI will be contacting selected Boston providers about participation in January 2008.  Training and data collection will begin in March for the Boston area.  The selection of providers to approach in the other markets will occur between January and July 2008.  Data collection in markets 2 to 10 will begin between late May and early September 2008.  Participation in this project is voluntary.

The primary and alternative markets are:



Primary Market

Alternative Market, if necessary

Boston, Massachusetts

Philadelphia, Pennsylvania

Chicago, Illinois

None identified

Dallas, Texas

Atlanta, Georgia

Lakeland/Tampa, Florida

Wilmington, North Carolina

Lincoln, Nebraska

Colorado Springs/Pueblo, Colorado

Louisville, Kentucky

Canton/Akron, Ohio

Rapid City, South Dakota

Marquette, Michigan

Rochester, New York

Portland, Maine

San Francisco/Bay Area, California

Salt Lake City, Utah

Seattle/Tacoma, Washington

Portland, Oregon

Providers in the primary or alternative areas who are interested in learning more about the PAC-PRD or who are interested in possibly participating are encouraged to contact Barbara Gage, Ph.D., Principal Investigator at RTI by e-mailing PAT-COMMENTS@RTI.ORG.

Information about this demonstration can be found at: