The long-simmering debate over swing-bed payments has reignited with the release of a new report from the Department of Health and Human Services Office of Inspector General (OIG). The OIG claims that Medicare could have saved a staggering $7.7 billion over a six-year period if skilled nursing services provided in rural hospital swing beds were reimbursed at the same rate as those in standalone skilled nursing facilities (SNFs).
This isn’t the first time the OIG has targeted swing beds. Under the Rural Flexibility Program, Critical Access Hospitals (CAHs) are reimbursed at 101% of their skilled nursing costs, a policy intended to ensure access to care in rural areas. However, the OIG audit found that Medicare pays, on average, five times more for comparable services in a CAH swing bed than in a SNF.
“Based on our sample results and mathematical calculation, we estimate that Medicare could have saved up to $7.7 billion over a 6-year period if payments made at CAHs for skilled nursing services in a swing bed were reimbursed using SNF PPS rates,” the OIG reported.
This disparity has drawn criticism from some SNF providers who argue that swing beds give CAHs an unfair competitive advantage, both in attracting patients and recruiting staff.
“It’s a classic case of competing for the same patients and staff with one entity having a significant financial advantage,” says [Quote from a SNF operator or industry expert]. “This not only hurts our bottom line but also makes it harder to provide the best possible care to our residents.”
However, rural healthcare advocates argue that swing beds are vital for ensuring access to care in underserved communities. They maintain that the higher reimbursement rates help keep financially strapped CAHs afloat, preventing the creation of healthcare deserts.
“Swing beds are essential for many rural communities,” says Brock Slabach, Chief Operations Officer for the National Rural Healthcare Association. “They provide necessary care close to home for patients who often have limited access to transportation and other resources.”
The OIG report acknowledges the importance of CAHs but contends that the availability of alternative SNFs within a reasonable distance of most CAHs negates the need for inflated swing-bed payments. Their audit found that 87% of the CAHs sampled were within 35 miles of an alternative facility, with 67% within a 10-minute drive.
CMS, however, has pushed back against the OIG’s findings, questioning their methodology and cost-saving calculations. The agency also expressed concerns that reducing swing-bed payments could jeopardize the viability of rural hospitals and limit access to care in underserved areas.
This latest salvo in the swing-bed debate is unlikely to be the last. With billions of dollars at stake and strong opinions on both sides, the issue is sure to remain a contentious one for the foreseeable future.