March 9, 2015

OIG Swing-Bed Report Citing $4 Billion in Lost Savings No Surprise to Association

By


Brock Slabach

With the Medicare Dependent Hospital and Low-Volume Hospital programs for rural hospitals on life support, yesterday’s early morning report on swing bed utilization from the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS) was one more ominous sign that the state of primary and emergency care for millions of rural Americans could be tenuous at best.

The OIG announcement also came as Brock Slabach, senior vice president for the National Rural Health Association, was about to deliver his report on the state of the union of rural hospitals on Monitor Monday’s live Internet broadcast. In its report released yesterday and picked up by the Associated Press, the OIG indicated that Medicare could have save $4.1 billion if payments for swing-bed services at critical access hospitals (CAHs) had been made instead to skilled nursing facilities (SNFs) based on the prospective payment system (PPS), not the cost-based system used by CAHs.

“We estimated that Medicare could have saved $4.1 billion over a six-year period if payments for swing-bed services at CAHs were made using skilled nursing facility prospective payment system (SNF PPS) rates,” the OIG noted in its report.

Seemingly unperturbed by the report he was reading for the first time, Slabach told Monitor Monday audience members that the results in the OIG report were anticipated.

“The findings are not surprising to us,” Slabach said on the broadcast. “We knew for quite some time they were going to cite the increase in swing bed utilization over the last five to 10 years, and then how the costs accumulated to be more than what they would have been if those patients had been served in another location.”

The OIG reported that swing-bed usage at CAHs significantly increased from calendar years 2005 through 2010, also noting that Medicare spending for swing-bed services at CAHs steadily increased to almost four times the cost of similar services performed at alternative facilities.

“Of course, for us, this is extremely concerning, because in order to provide access to important (skilled) care within rural communities and to provide access to patients who have high acuity for their particular (skilled) nursing condition, this is (a) very important program, and the cost-based reimbursement afforded to these swing beds is extremely valuable not only for the patients but (also) for the fiscal health of our critical access hospitals,” Slabach continued. 

The OIG reported that of the 100 CAHs it had sampled, 90 had alternative facilities within a 35-mile radius with skilled nursing care available.

“On the basis of our sample results, we estimated that swing-bed services provided at 1,080 of the 1,200 (or 90 percent) of the CAHs in our sampling frame could have been provided at alternative facilities within 35 miles of the CAHs during (calendar year) 2010,” the OIG report read.

“We recommended that the Centers for Medicare & Medicaid Services (CMS) seek legislation to adjust CAH swing-bed reimbursement rates to the lower SNF PPS rates paid for similar services at alternative facilities,” the report continued. “CMS agreed with our finding that CAHs' swing-bed utilization has increased but disagreed with our recommendation because of concerns with our findings on the availability of skilled nursing services at nearby alternative facilities and our calculation of savings.”

Slabach was quick to point out that OIG report could mean trouble ahead for America’s rural hospitals. He noted that 48 rural hospitals have closed since 2010, adding that nearly 300 more are on the brink of closure.

“Now the prognosis for the OIG report for swing beds is that we’re going to be working to make sure Congress – who will be the primary recipient of this report – will not take any action to initiate any recommendations the OIG has made,” Slabach said. “And so we’re going to be doubling our effort in Congress to make sure that the report doesn’t see the light of day in terms of legislation.”

In the broadcast, Slabach urged Congress to permanently extend the Medicare Dependent Hospital designation and the Low-Volume Hospital adjustment.

About the Author

Chuck Buck is the publisher of RACmonitor and the executive producer and program host for Monitor Mondays.

Contact the Author

cbuck@panaceainc.com

Comment on this Article

editor@racmonitor.com

Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the executive producer and program host of Monitor Mondays.

This email address is being protected from spambots. You need JavaScript enabled to view it.