The Centers for Medicare & Medicaid Services should seek legislation to reduce swing-bed reimbursement rates for critical access hospitals from 101% of reasonable costs to the daily rates paid under the skilled nursing facility prospective payment system, the Department of Health and Human Services’ Office of Inspector General recommended today. The OIG report estimates that Medicare could have saved $4.1 billion between 2005 and 2010 if CAHs were paid for swing-bed services using SNF PPS rates. In comments included in the report, CMS disagreed with the recommendation, saying the OIG finding “overestimates savings by failing to incorporate important factors such as the level of care needed by swing-bed patients, transportation fees to alternative facilities, and the use of point-to-point mileage distances instead of road miles.” The agency also expressed concerns with the methodology used to determine the findings on availability of skilled nursing services at nearby alternative facilities and the calculation of cost savings. Priya Bathija, AHA senior associate director of policy, said the report “demonstrates an unfortunate lack of understanding of how health care is delivered in rural communities. It inappropriately focuses on potential savings Medicare could realize, rather than the needs of individuals living in rural America. The AHA continues to strongly advocate for maintaining the CAH program as it is currently structured in order to help ensure that all patients in rural communities have access to health care.”

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