Rehabilitation hospitals, also referred to as inpatient rehabilitation hospitals, are devoted to the rehabilitation of patients with various neurological, musculo-skeletal, orthopedic and other medical conditions following stabilisation of their acute medical issues. The industry is largely made up by independent hospitals that operate these facilities within acute care hospitals. There are also inpatient rehabilitation hospitals that offer this service in a hospital-like setting, but separate from acute care facilities. Most inpatient rehabilitation facilities are located within hospitals. .
Rehabilitation hospitals were created to meet a perceived need for facilities which were less costly on a per diem basis than general hospitals but which provided a higher level of professional therapies such as speech therapy, occupational therapy, and physical therapy than can be obtained in a "skilled nursing care" facility. Rehabilitation hospitals are designed to meet the requirements imposed upon them by the Medicare administration, and to bill at the rates allowed by Medicare for such a facility. Medicare allows a lifetime total of 100 days' stay in a rehabilitation hospital per person. A rehabilitation hospital can only be accessed following a stay as an inpatient in a general hospital which has lasted for a certain number of days. The general hospital will evaluate the patient to determine if the patient will benefit from rehabilitation services. A positive determination will be made if the patient is deemed to require a certain level of therapies. If a positive determination is made, a report concerning the patient's needs will be sent to the rehabilitation hospital, which has the discretion to admit or not admit the patient. If the patient is transferred to the rehabilitation hospital, his/her medical records and a recommended treatment plan will be transmitted with the patient. The treatment plan will include daily therapies except on weekends.