Drawing on international experiences, Changsha City of Hunan Province explored reform of its payment method for inpatient rehabilitation. Based on the intensity of therapies, rehabilitation is divided into “recovery phase” and “chronic phase”, for which Function-Related Groups (FRG) and Patient-Driven Chronic Rehabilitation Groups (PDCRG) were established as case-mix groups. Functional assessment scales and value-based incentive mechanism were developed. In the future, data would be collected in the simulation phase to refine case-mix groups and payment standards, improve the functional assessment tools, and establish reasonable value assessment method, in order to optimize the value-based payment system to achieve the goal of triple-win between patients, providers and insurers.