Provisions of the Balanced Budget Act challenge IDS care coordination patterns.

Provisions of the Balanced Budget Act of 1997 that focus on postacute services have important ramifications for integrated delivery systems (IDSs) because changes in payment rates for such services create financial incentives to alter patient-flow patterns among acute and postacute care services. In particular, IDSs should understand the provisions of the act that deal with a prospective payment system for skilled nursing services, the definition of a transfer from an acute care hospital, interim and prospective payment systems for home health care, limits imposed by the 1982 Tax Equity and Fiscal Responsibility Act for acute rehabilitation providers, a PPS for acute rehabilitation providers, TEFRA limits for long-term acute care, and limits on outpatient therapy services.