The costs of subacute care (palliative care, rehabilitation medicine, psychogeriatrics, and geriatric evaluation and management) and non-acute care (nursing home, convalescent and planned respite care) are not adequately described by existing casemix classifications. The predominant treatment goals in subacute care are enhancement of quality of life and/or improvement in functional status and, in non-acute care, maintenance of current health and functional status. A national classification system for this area has now been developed - the Australian National Sub-Acute and Non-Acute Patient Classification System (AN-SNAP). The AN-SNAP system, based on analysis of over 30,000 episodes of care, defines four case types of subacute care (palliative care, rehabilitation, psychogeriatric care, and geriatric evaluation and management) and one case type of non-acute care (maintenance care), and classifies both overnight and ambulatory care. The AN-SNAP system reflects the goal of management - a change in functional status or improvement in quality of life - rather than the patient's diagnosis. it will complement the existing AN-DRG classification.