Kusserow on Compliance: OIG on swing beds at critical access hospitals

The OIG has issued a report that notes costs for swing bed usage at critical access hospitals (CAHs) are significantly increasing since 2005 at an average of almost four times the cost of similar services at alternative facilities. Of the 100 CAHs sampled in the OIG study, it found that 90 percent could have been provided at alternative facilities within a 35-mile radius with available skilled nursing care. The report estimated that Medicare could have saved $4.1 billion over a 6-year period if payments for swing bed services at CAHs were made using skilled nursing facility prospective payment system (SNF PPS) rates.

The OIG called for new legislation to adjust CAH swing bed reimbursement rates to the lower SNF PPS rates paid for similar services at alternative facilities. This proposal would significantly change the way rural-based hospitals are reimbursed for care provided in post-acute care swing beds. The OIG further recommended that the agency switch CAH reimbursement to the SNF prospective payment rate as soon as possible. CMS agreed with the OIG findings that CAH’s swing bed utilization has increased, but not necessarily the calculations of savings. CMS also disagreed with the OIG recommendation for a legislative solution because of concerns about the availability of skilled nursing services at nearby alternative facilities.

It did not take long for those representing the affected parties to line up behind CMS and oppose the changes promoted by the OIG. Leading the pack was the American Hospital Association (AHA), who quickly weighed in on the issue, echoed CMS concerns, and noted as such in a published statement. The AHA said it “continue(s) to strongly advocate for maintaining the CAH program as it is currently structured in order to help ensure that all patients in rural communities have access to health care.”

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2015 Strategic Management Services, LLC. Published with permission.