Factors Predicting Swing Bed Versus Skilled Nursing Facility Use (November 2022)

In this brief, we examine differences between patients discharged to swing beds versus skilled nursing facilities (SNFs), stratifying by admitting hospital type (i.e., rural CAH versus rural PPS hospital). Identification of key differences between patients discharged to swing beds versus SNFs can help inform further discourse on this financially and clinically important topic.

KEY FINDINGS

• Utilization Project (HCUP) State Inpatient Databases (SID), we found that 4.0% of discharges from rural Critical Access Hospitals (CAHs) were discharged to swing beds, and 9.1% of rural CAH discharges were discharged to skilled nursing facilities (SNFs). In contrast, 0.2% of discharges from rural Prospective Payment System (PPS) hospitals were discharged to swing beds, and 10.7% of rural PPS hospital discharges were discharged to SNFs.
• Compared to those discharged to SNFs and adjusting for discharging hospital type (rural CAH versus rural PPS hospital), individuals discharged to swing beds were generally younger, more likely to be White, more likely to live in a rural ZIP code, more likely to be primarily insured via Medicare, and less likely to be primarily insured via private insurance. Individuals discharged to swing beds also had a lower average number of comorbidities.
• Compared to discharges to SNFs and adjusting for discharging hospital type, discharges to swing beds were more likely to be classified as surgery-related visits during acute care.

Suggested citation. Malone TL, Holmes GM. Factors Predicting Swing Bed Versus Skilled Nursing Facility Use. NC Rural Health Research Program. UNC Sheps Center, Chapel Hill, NC. November 2022. Findings Brief 187.

The Effect of Medicare Payment Standardization Methods on the Perceived Cost of Post-Acute Swing Bed Care in Critical Access Hospitals (March 2021)

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. Therefore, policy makers need to understand where existing payment formulas may inadvertently penalize rural providers. 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 MSPB measure.

KEY FINDINGS

• 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 differences between standardized and actual swing bed allowed amounts per day and per claim are greatest among hospitals in the South and Midwest census regions and among beneficiaries who are Black as compared to other races and ethnicities. At the claim level, differences increase as swing bed volume increases.
• An estimate of the “typical” standardized allowed amount per day of swing bed care using the CAH swing bed method is $1,910. This compares to an estimated typical actual allowed amount per day of $1,676 and a simulated range of standardized allowed amounts of $358 to $609 per day using the CMS SNF standardization method.

Suggested citation. Malone T, Kirk D, Reiter K. The Effect of Medicare Payment Standardization Methods on the Perceived Cost of Post-Acute Swing Bed Care in Critical Access Hospitals . NC Rural Health Research Program. UNC Sheps Center, Chapel Hill, NC. March 2021. Findings Brief 172.

Estimated Reduction in CAH Profitability from Loss of Cost-Based Reimbursement for Swing Beds (May 2020)

Over the past several years, a few reports have suggested Medicare could reduce costs by changing swing bed reimbursement from cost-based to the Skilled Nursing Facility Prospective Payment System (SNF PPS). Rural communities and CAHs are concerned about the proposed change from cost-based reimbursement to the SNF PPS because it would reduce the amount of Medicare reimbursement to CAHs. Approximately 92% of CAHs provide care in swing beds,3 and for some rural communities, swing beds are the only source of post-acute care.1 Further, CAHs have come to rely on swing beds to manage patients and staffing and to help ensure financial stability of their organizations.2In the brief, we estimate the impact of potential loss of cost-based reimbursement for swing beds on CAH profitability, and examines the characteristics of CAHs that would be most affected by such a change in reimbursement.

KEY FINDINGS

• If Medicare swing bed days were reimbursed using the Skilled Nursing Facility Prospective Payment System (SNF PPS) rather than cost‐based reimbursement, the median change in CAH 2016 operating margin is estimated to be ‐2.16 percentage points.
• CAHs with the greatest estimated reduction in operating margin have a higher swing bed average daily census and a greater percentage of inpatients covered by Medicare.
• The CAHs most negatively affected by a change in swing bed reimbursement are, on average, smaller, more isolated, and located farther from the nearest skilled nursing facility.

Suggested citation. Broussard DM & Reiter KL. Estimated Reduction in CAH Profitability from Loss of Cost-Based Reimbursement for Swing Beds. NC Rural Health Research Program. UNC Sheps Center, Chapel Hill, NC. May 2020. Findings Brief 164.

A Critique of the Office of the Inspector General’s Report on Swing Beds in Critical Access Hospitals (March 2015)

In March 2015, the Office of the Inspector General (OIG) issued a report on Medicare’s expenditures on swing beds in Critical Access Hospitals (“Medicare Could Have Saved Billions at Critical Access Hospitals If Swing Bed Services Were Reimbursed Using The Skilled Nursing Facility Prospective Payment System Rates.” Department of Health and Human Services, Office of Inspector General, March 2015, A-05-12-00046, hereafter “OIG report”). The purpose of this Policy Brief is to draw from our body of work in this topic to evaluate the methods and data of the OIG report.  The March 2015 report estimates the Medicare savings if swing bed days in Critical Access Hospitals (CAHs) were paid using Skilled Nursing Facility (SNF) Prospective Payment System (PPS) Rates instead of the current method of cost-based reimbursement. In our brief, we discuss what we believe are three important limitations of the methods and data that should be considered when interpreting the OIG report’s findings.

KEY FINDINGS

• The OIG report over-estimates the potential Medicare savings by removing swing beds from cost-based reimbursement. The simple per diem method used by OIG fails to account for fixed cost transfers among services, over-estimating the Medicare savings of removing swing beds from cost-based reimbursement.
• The OIG report ignores the fact that skilled nursing days in rural SNF facilities increased roughly one third faster than stays in swing beds.
• The OIG report overstates the limited evidence that outcomes and characteristics of swing patients in CAHs are similar to patients in SNFs. Overall, there is little research comparing swing patients with those receiving care in skilled nursing facilities. From two of our findings briefs that consider swing patients versus those in SNFs, the OIG report draws data points suggesting patients are similar in some respects, but omits data points that suggest patients may be different.

Suggested citation. Reiter K and Holmes M. A Critique of the Office of the Inspector General’s Report on Swing Beds in Critical Access Hospitals. NC Rural Health Research Program. UNC Sheps Center, Chapel Hill, NC. March 2015. Findings Brief 122.

Calculating the Medicare Cost of Swing Beds (March 2015). This short video explains how to correctly calculate the Medicare cost of swing beds.

Suggested Citation: Holmes, M. Calculating the Medicare Cost of Swing Beds. NC Rural Health Research Program. UNC Sheps Center, Chapel Hill, NC. March 2015.

Discharge to Swing Bed or Skilled Nursing Facility: Who Goes Where?  (February 2014)

Swing beds are one option for post-acute skilled care in rural communities, and they are more likely to be the only option in the most rural areas. These transitional care beds allow a patient to be discharged from an acute hospital stay but remain in the hospital for skilled after care. Skilled nursing facilities (SNFs) are another option for post-acute care when facility-based (rather than home-based) care is needed. Swing beds in small rural hospitals were authorized to allow flexibility in providing post-acute care, particularly in areas where hospital volume is low and options for post-acute care are limited. The North Carolina Rural Health Research Center has undertaken a series of studies to better understand swing bed utilization and cost. Earlier briefs included interviews with hospital administrators about their use of swing beds, analysis of trends in swing bed use following reimbursement changes in the Medicare Modernization Act of 2003,1 and examination of the cost of providing swing bed care in Critical Access Hospitals (CAHs).

In this fourth and final study, we explore the health conditions of patients discharged to facility-based, post-acute care. We used the Nationwide Inpatient Sample, Healthcare Cost and Utilization Project (HCUP), Agency for Healthcare Research and Quality from 2007 to 2010 to characterize discharges for four groups of patients – patients discharged from 1) CAHs and 2) rural Prospective Payment System (PPS) hospitals to two different types of facility-based post acute care: a) swing beds and b) skilled nursing facilities.

KEY FINDINGS

• Discharge Destinations from Rural Hospitals Patients discharged to post-acute, facility-based care from rural hospitals represent only 11.7% of all rural hospital discharges (Table 1).
• For CAHs, 14.1% of patients are discharged to post-acute care with slightly more going to SNFs than to swing beds (8.5% vs 5.6%).
• For rural PPS hospitals, however, the vast majority of post-acute care discharges are sent to SNFs rather than swing beds (10.4% vs 0.6%).

Suggested citation. Freeman V, Randolph R, Holmes GM. Discharge to Swing Bed or Skilled Nursing Facility: Who Goes Where? February 2014. NC Rural Health Research Program. UNC Sheps Center, Chapel Hill, NC. Findings Brief 11.

Medicare, swing beds, and Critical Access Hospitals (Medical Care Research and Review 2013)

This analysis estimates the average net cost to Medicare of a SNF swing day by simulating the elimination of all Medicare SNF swing bed days in CAHs in 2009.

Suggested citation. Reiter KL, Holmes GM, Broyles I.  Medicare, swing beds, and Critical Access Hospitals. Medical Care Research and Review 2013;70(2):206-17.

Why Use Swing Beds? Conversations with Hospital Administrators and Staff (April 2012)

In this study, we identified hospitals with swing beds, and interviewed the CEO or his/her designee (often the swing bed coordinator) in 23 randomly selected hospitals (52% response). Swing beds are one option for post-acute skilled care in rural communities; they are more likely to be the only option in the most rural areas. How are they being used? What do they mean for the hospital and the community? We explored these issues with hospital staff to inform our analytic studies on swing bed trends, costs, and clinical uses.

Suggested citation. Freeman V, Radford A. Why Use Swing Beds? Conversations with Hospital Administrators and Staff . NC Rural Health Research Program. UNC Sheps Center, Chapel Hill, NC. April 2012. Findings Brief 105.

Effect of Swing Bed Use on Medicare Average Daily Cost and Reimbursement in Critical Access Hospitals (December 2011)

This analysis estimates the average net cost to Medicare of a SNF swing day by simulating the elimination of all Medicare SNF swing bed days in CAHs in 2009.

KEY FINDINGS

• Of the 1,228 CAHs included in our study sample, 99 hospitals (8.1%) in 2009 had no SNF-type swing bed days and would be unaffected by any changes to Medicare reimbursement for swing   bed days.
• Medicare reimbursement for SNF-type swing bed days represented 3.6% of total inpatient revenue reported by the 1,228 CAHs in 2009.
• For CAHs with any SNF-type swing bed days in 2009, the inpatient operating cost per diem used to calculate Medicare reimbursement would increase by an estimated 42.7% on average if   Medicare swing bed days were eliminated. The median increase was estimated to be 25.3% and   the range of increase was estimated to be between 0.7% (approximately $7 per day) and 785%   (approximately $4,769 per day).
• Net Medicare expenditures on swing bed days in 2009 were estimated to be $483.3 million for 829,104 days, or about $582.91 per day on average.
  • Medicare’s average expenditure on SNF swing bed days per CAH in 2009 was estimated to be $393,558.
  • The estimated expenditure per swing bed day varied widely across CAHs from $274 to $4,587.
• The cost to Medicare of alternative treatment strategies for these patients – such as stays in Skilled Nursing Facilities – is unknown and may be more or less than this amount.

Suggested citation. Reiter K, Holmes GM, Pink GH, Freeman V. Effect of Swing Bed Use on Medicare Average Daily Cost and Reimbursement in Critical Access Hospitals.NC Rural Health Research Program. UNC Sheps Center, Chapel Hill, NC. December 2011. Findings Brief 103.

Trends in Skilled Nursing Facility and Swing Bed Use in Rural Areas Following the Medicare Modernization Act of 2003 (August 2011)

To answer questions about trends in SNF and swing bed use in rural areas, we used hospital and skilled nursing facility (SNF) Medicare Cost Reports linked with county demographic information to analyze changes in post-acute skilled care availability and use over the period 2003 to 2008. Results are presented for different levels of rurality and, in the case of hospital-based care, for the two predominant types of hospitals in rural areas, i.e., hospitals paid under the prospective payment system (PPS) and Critical Access Hospitals (CAHs).KEY FINDINGS

• Access to post-acute skilled care in rural areas has improved since 2003; however, choice and availability remain limited in some counties. Community-based freestanding skilled nursing facilities are the predominant source of skilled care for rural residents
• Access to any hospital-based post-acute skilled care has changed little since 2003; however, the type of skilled care available is changing. The swing bed program is growing, largely due to the conversion of PPS hospitals to CAH status.

Suggested citation. Reiter, K., Freeman, V. Trends in Skilled Nursing Facility and Swing Bed Use in Rural Areas Following the Medicare Modernization Act of 2003. NC Rural Health Research Program. UNC Sheps Center, Chapel Hill, NC. August, 2011. Final Report 101.

Trends over Time in the Provision of Skilled Nursing Care in Critical Access Hospitals (February 2006)

This study examines trends in the delivery of skilled nursing facility (SNF) services in both hospital-based units and swing beds during a period of dramatic change in Medicare payments for post-acute care, focusing on critical access hospitals (CAHs). In Prospective Payment System (PPS) hospitals swing bed skilled nursing care is now reimbursed under SNF-PPS, but CAHs continue to receive cost-based reimbursement. CAHs do not receive cost-based reimbursement for SNF services delivered in a dedicated hospital-based SNF unit; these are paid under the SNF-PPS rules for PPS and CAH facilities alike. However, the financial incentives for operating a SNF unit are very different for CAHs than they are for PPS hospitals because of the potential impact on overhead allocations.

We examined whether CAHs differed from other hospitals with respect to long- term care participation between 1997 and 2004.

KEY FINDINGS

• The number of hospital-based facilities declined, but the largest absolute and proportional reductions were found in urban rather than rural areas. When comparing rural hospitals that had converted to CAH status by June 2004 to those that remained under PPS, CAHs were less likely to have divested themselves of hospital-based SNF units.
• An increasing number of rural hospitals used swing beds. Most of the increase came from CAHs: Swing bed participation in this group rose from 83% in 1996 to 95% by 2003, while it remained around 40% for all other eligible facilities. 1
• From 1997 through 2003 the trend in intensity of use of swing beds in CAHs, as measured by average daily swing bed census, was similar to that in other hospitals.  Total Medicare SNF days grew by about 2.5% per year over this period, despite the decline in the number of hospital-based facilities. While the total number of swing bed days also increased, swing bed care declined as a share of all hospital-related SNF days. Increases in total Medicare days appear to have been absorbed by the freestanding facilities.

Suggested citation. Dalton K, Park J, Slifkin R, Howard HA. Trends over Time in the Provision of Skilled Nursing Care in Critical Access Hospitals. NC Rural Health Research Program. UNC Sheps Center, Chapel Hill, NC. February, 2006. Findings Brief 81.

Trends in Skilled Nursing and Swing-bed Use in Rural Areas, 1996-2003 (December 2005)

This study examines trends in the delivery of skilled nursing facility (SNF) services in rural areas during a period of dramatic change in Medicare payments. We focus on the role of rural hospitals in providing SNF services, as a number of regulatory changes occurred between 1998 and 2002 that could potentially influence hospital provision of skilled nursing care; most important is the transition from cost-based reimbursement to a per-diem based prospective payment system (PPS). Although initially exempted from SNF PPS, in July of 2002 Medicare SNF services provided in swing beds within PPS hospitals also began to come under the SNF PPS rules.

Suggested citation. Dalton K, Park J, Howard A, Slifkin RT. Trends in Skilled Nursing and Swing-bed Use in Rural Areas, 1996-2003. NC Rural Health Research Program. UNC Sheps Center, Chapel Hill, NC. December 2005. Working Paper 83.