The Centers for Medicare and Medicaid (CMS) use
standardized payments to compare Medicare resource use
across locations and settings. Currently, CMS uses
different payment systems to reimburse post-acute care
provided in Critical Access Hospital (CAH) swing beds
versus inpatient prospective payment system (IPPS)
hospital swing beds or skilled nursing facilities (SNFs).
This results in differential payments for theoretically
similar care. Current CMS payment standardization methods
perpetuate these differences across settings.
Importantly, CMS faced data limitations in developing a
payment standardization method for CAH swing bed care
since CAH swing bed claims do not include the patient
assessment information (e.g., measures of patient
characteristics and service use) that is included with
SNF claims and used to adjust SNF claims for case mix.
Thus, differences in the payment standardization methods
used for CAHs, IPPS hospital swing beds, and SNFs may
influence post-acute care discharge patterns and,
subsequently, access to post-acute care for rural
residents. The purpose of this study is to describe the
effects of current Medicare payment standardization
methods on the perceived cost of CAH swing bed care as it
relates to the Medicare Spending per Beneficiary measure.
Using 2016 Medicare CAH swing bed claims, this study
compares Medicare allowed amounts, standardized allowed
amounts using CMS's CAH swing bed payment standardization
method, and simulated standardized allowed amounts using
the SNF prospective payment system payment standardization method.
Using CMS's current CAH swing bed payment standardization
method, standardized swing bed allowed amounts per day
and per claim are generally higher than actual swing bed
allowed amounts. Further, standardized swing bed allowed
amounts are generally three to five times greater than
what they would be if CMS's SNF payment standardization
method were applied to swing bed payments. If CAH swing
bed providers and SNFs provide similar services, this
result appears counter to the stated purpose of payment
standardization, which should remove the effects of
payment differences across similar settings.
The results show that the difference in payment
standardization methods between CAH swing beds and
SNFs/IPPS hospital swing beds exacerbate this
differential and might not reflect the true resource
utilization required to provide swing bed care.