In this article, the author summarizes recent changes in Medicare post-acute payment policies, discusses the implications of certain design and implementation issues, and analyzes whether different types of patients are using skilled nursing facilities (SNFs), home health agencies (HHAs), and rehabilitation hospitals and units. If similar populations are treated by these three types of providers, service patterns may be affected by the financial incentives in the new, more restrictive payment policies. The author describes new post-acute care (PAC) payment policies, service patterns prior to the Balanced Budget Act of 1997 (BBA), differences in the populations using these providers, and possible effects of the new payment systems on site-of-care decisions.