What factor primarily drives reimbursement rates for inpatient rehabilitation under the PPS?

The primary factor driving reimbursement rates for inpatient rehabilitation under the Prospective Payment System (PPS) is the case-mix grouping of the patient. The PPS utilizes a classification system designed to categorize patients based on their clinical characteristics and the intensity of services required. This system is referred to as the case-mix grouping, which takes into account various factors such as diagnosis, treatment needs, and resource utilization.

The rationale behind using case-mix grouping is to standardize payments and ensure that reimbursements are more closely aligned with the actual costs of care provided to different patient populations. Each case-mix group has a predetermined payment rate, which means that hospitals are reimbursed a set amount based on the patient's classification rather than on per-service billing. This encourages efficiency, as hospitals are incentivized to provide high-quality care within these payment limits while managing their resources effectively.

In contrast, factors like negotiation skills of the hospital and the patient's personal insurance plan may influence specific payment agreements or out-of-pocket costs, but they do not fundamentally dictate the payment structure set by the PPS. Additionally, historical revenue of the hospital may reflect financial viability or past performance but does not directly impact the reimbursement rates determined by patient classifications under the PPS framework.