The following E-Bulletin discussing a recent OIG Report on Medicare and CAHs was published on March 18, 2015, by the State Bar of California, Business Law Section’s Health Law Committee.
The following summarizes a recent report by the Office of Inspector General (OIG) that found Medicare could have saved billions over a 6-year period at Critical Access Hospitals if swing-bed services were reimbursed using the skilled nursing facility prospective payment system rate.
To ensure that beneficiaries in rural areas have access to a range of hospital services, Congress established the Rural Flexibility Program, which created Critical Access Hospitals (CAHs). CAHs have broad latitude in the types of inpatient and outpatient services they provide, including “swing-bed” services, which are the equivalent of services performed at a skilled nursing facility (SNF). Medicare reimburses CAHs at 101 percent of their reasonable costs for providing services to beneficiaries rather than at rates set by Medicare’s prospective payment system (PPS) or Medicare’s fee schedules.
For a hospital to be designated as a CAH, it must meet certain Conditions of Participation (CoPs). Some of these CoP requirements include: (1) being located in a rural area; (2) either being at a certain distance from other hospitals or being grandfathered as a State-designated necessary provider; (3) having 25 or fewer beds used for inpatient care or swing-bed services; and (4) having an annual average length of stay for a patient that does not exceed 96 hours. … Read more →