OBJECTIVE To determine the feasibility and utility of applying a case-mix adjusted algorithm for treatment across the continuum of stroke rehabilitation. METHODS Implementation of a clinical algorithm developed through national expert panels to standardize rehabilitation assessment and treatment of veterans with stroke. Stroke patients were stratified into initial severity groups using FIM instrument-Function Related Groups (FIM-FRG) classifications and were followed up from first rehabilitation referral to completion of all active restorative functional goals. FIM-FRG assignments were used to establish case-mix adjusted outcome indicators for the continuum of rehabilitation services. METHODS Rehabilitation services in medical and surgical units, intermediate care units, inpatient rehabilitation bed units, and outpatient settings in 10 participating Veterans Affairs (VA) medical centers. METHODS Stroke patients (n = 421) who received rehabilitation in the 10 participating VA centers. METHODS Patients' functional gains, length of treatment (LOT), functional status at discharge, LOT efficiency, costs, cost efficiency, and disposition location. RESULTS Two hundred twenty-three patients began rehabilitation while in acute medical or surgical units, 171 in inpatient rehabilitation units, 24 in intermediate care, and the remainder while in other settings. With cases compiled across all settings, average total rehabilitation costs for patients in the lowest FRG class (most severe disabilities) were more than twice those for patients assigned to the highest FRG class (least severe disabilities). FIM gains were greatest in the subset of younger stroke patients with the most severe disabilities. CONCLUSIONS Implementing a standard algorithm of rehabilitation care that includes outcome indicators adjusted to patients' disability severity is feasible. The algorithm's utility is evident because it encompasses rehabilitation care provided across the full continuum, promotes access to care by advocating assessment of all stroke patients, encourages early initiation of treatment, and promotes a smooth transition though various levels of care while encouraging cost containment.