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

The purpose of this study is to describe the effects of current Medicare payment standardization methods on the perceived cost of Critical Access Hospital (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 Centers for Medicare & Medicaid Services’ (CMS) CAH swing bed payment standardization method, and simulated standardized allowed amounts using the skilled nursing facilities (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/inpatient prospective payment system hospital swing beds exacerbate this differential and might not reflect the true resource utilization required to provide swing bed care.

Contact Information:

Kristin Reiter, PhD
North Carolina Rural Health Research and Policy Analysis Center
Phone: 919.843.8619