Even Grave Errors at Rehab Hospitals Go Unpenalized and Undisclosed
For-profit hospitals provide most inpatient physical therapy but tend to have worse readmission rates to general hospitals. Medicare doesn’t tell consumers about troubling inspections.
By Jordan Rau and Irena Hwang
Jordan Rau has been writing about hospital safety since 2008. Irena Hwang specializes in data analysis. For this story, they examined inspection reports, lawsuits, government data and corporate records.
The New York Times, July 15, 2025
Rehab hospitals that help people recover from major surgeries and injuries have become a highly lucrative slice of the health care business. But federal data and inspection reports show that some run by the dominant company, Encompass Health Corporation, and other for-profit corporations have had rare but serious incidents of patient harm and perform below average on two key safety measures tracked by Medicare.
Yet even when inspections reveal grave cases of injury, federal health officials do not inform consumers or impose fines the way they do for nursing homes. And Medicare doesn’t provide easy to understand five-star ratings as it does for general hospitals…
Across the nation, there are now nearly 400 stand-alone rehab hospitals, the bulk of which are for-profit. These hospitals collectively generate profits of 10 percent, more than general hospitals, which earn about 6 percent, and far more than skilled nursing homes, which make less than half a percent, according to the most recent data from the Medicare Payment Advisory Commission, an independent congressional agency… [end quote]
It’s not clear from the article why there were more problems (medication errors, lack of patient care) at for-profit rehab hospitals. The problem is that rehab hospitals are harder to check in advance because Medicare doesn’t rate them.
Wendy