Objective: To evaluate inpatient rehabilitation in public facilities in Australia against a utilization review tool used in the USA. Design: Prospective cohort study. Subjects: Patients identified in the acute wards of a regional referral hospital and subsequently transferred to a public inpatient rehabilitation facility. Methods: The InterQual utilization review criteria were applied to days of stay in the rehabilitation wards. Reasons for variance and actual therapy time were recorded. Results: Data on 267 patient episodes (7359 days) are available. Only 48% of patient days met utilization review criteria, with reasons for variance including insufficient therapy, awaiting discharge to long-term care or to home and being more appropriate for acute medical care. Therapy time data (available on 208 patient episodes) show that therapy was received on 50% of calendar days and for an average of 37 min per weekday (56 min for stroke patients). Allied health staffing levels were below recommended levels, but consistent with other Australian public hospital rehabilitation facilities. Conclusion: Patients in these facilities seem to be receiving less therapy than their American counterparts; however, therapists often viewed their rehabilitation as appropriate. Findings also suggest inefficiencies in care delivery. Utilization review may help in the assessment of level of care appropriateness in the rehabilitation setting.