Swing Bed Services in Critical Access Hospitals

Denis Houle, Healthcare Consulting Senior Manager
April 2013

Rural America is older and is growing older faster than the rest of the country.  These trends raise concerns about access in rural areas to post-acute and long-term care (LTC) services.  Although rural hospitals and Critical Access Hospitals (CAHs) in particular, have historically played an important role in providing these services, there is some evidence that this is changing.

Declines in the financial performance of rural hospitals and the shift from cost-based payment to a prospective payment system (PPS) reimbursement in Medicare for Skilled Nursing Facility (SNF) and Home Health Services pursuant to the Balanced Budget Act of 1997 (BBA 97) have changed the financial landscape for rural hospitals.  For some CAHs, this change in financial incentives has discouraged the continued operation of distinct part skilled nursing units and home health care.

The subsequent exemption of CAH-based swing bed services from the SNF PPS in July 2002 created financial incentives for CAHs to close their SNF units in favor of providing skilled level of care using swing beds (AHA, 2012).  As a result, CAHs are significantly more likely to offer swing bed services at 90% than other rural hospitals at 39% (2008 AHA annual survey).

The Flex Monitoring Team SNF Study (policy brief # 31, dated November 2012) noted financial performance as the primary reason for the closure of SNF units as well as the ability to substitute cost-based swing beds for PPS-based SNF beds.  CAHs reported few difficulties accessing SNF and other LTC services following closure due to the availability of alternative local services, including swing beds.  Respondents reported little negative responses from the community regarding the decision to close their units.  The study concludes that the closure of hospital-based SNF units does not seem to have had a significant negative impact on access to needed SNF and LTC services as swing beds and alternative community service providers appear to have filled the gap.

Is your hospital maximizing the benefits of Medicare cost-based swing bed services?

If you would like to learn more, please contact Denis Houle.

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