OBJECTIVES: Polypharmacy is an important healthcare issue, especially in elderly patients with dementia. As an incentive to reduce polypharmacy, a health insurance reimbursement scheme was introduced in 2016 for medication review and the reduction of medications for inpatients in Japan. However, the effects of these incentive schemes were not evaluated. METHODS: We identified 1,465,881 inpatients aged ≥65 years with dementia. An interrupted time-series analysis was conducted by fitting a Prais-Winsten linear regression model. The outcome measure was the number of classes of medications prescribed during discharge. RESULTS: No significant changes were observed in the average number of medication classes at discharge immediately after the introduction of the scheme (coefficient: -0.022, 95% confidence interval [CI]: -0.17 to 0.13). The slope change, representing the effect of the intervention over time, was also not significant (coefficient: -0.00053, 95% confidence interval: -0.0012 to 0.00018). CONCLUSIONS: The incentive scheme was not associated with a reduction in the number of medication classes at discharge among older inpatients with dementia.