Because they know how to efficiently bilk Medicaid for those patients, while HMOs will fight over every line-item.

It’s possible that Medicaid has certain rules for a minimum stay before they will pay for rehab after the fact. I think there was a story recently floating around HN specifically talking about some similar requirement in Medicare leading to extra unnecessary (in the physician’s eyes) hospital days and delaying transfer to a proper rehab program, causing worse overall outcomes.