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OIG proposes SNF PPS rates for critical access hospitals

March 19, 2015
by Lois A. Bowers, Senior Editor
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The Medicare program could have saved $4.1 billion over 6 years if it had reimbursed for swing-bed services at critical access hospital (CAHs) using the lower skilled nursing facility (SNF) prospective payment system (PPS) rates paid for similar services at alternative facilities, according to a new report [PDF] from the U.S. Department of Health and Human Services Office of Inspector General (OIG).

Therefore, the OIG recommends that CMS seek legislation to adjust CAH swing-bed reimbursement rates to the SNF PPS rates. CMS, however, does not agree with the recommendation.

Swing-bed usage at CAHs—and the costs associated with that use—significantly increased from 2005 through 2010, according to the OIG. Medicare spending for swing-bed services at CAHs increased to almost four times the cost of similar services at alternative facilities. Of the 100 CAHs sampled by the OIG, 90 had alternative facilities within a 35-mile radius with alternative skilled nursing care available.

“CMS agreed with OIG’s finding that CAHs’ swing-bed use has increased but disagreed with the recommendation [to seek legislation] because of concerns with our findings on the availability of skilled nursing services at nearby alternative facilities and our calculation of savings,” the OIG notes.