Picture this: you’re a healthcare provider who’s been out of the Medicare game for a while, maybe took a little break to recharge, and now you’re ready to dive back into the waters of reimbursement. Enter the Centers for Medicare & Medicaid Services (CMS), looking at you with the intense scrutiny of a lifeguard watching over a pool. Thanks to CMS’s newly updated 2025 Prospective Payment System (Final Rule), providers reactivating their Medicare billing privileges are now under the microscope like never before. Oh, and if you’re a rural hospital with “swing beds,” buckle up—you’re in for an extra round of scrutiny too.
Let’s start with the basics. Under the new rules, CMS has expanded its Provisional Period of Enhanced Oversight (PPEO) to include providers who are reactivating their Medicare billing privileges. Previously, PPEOs were reserved for newly enrolling providers, those undergoing a change of ownership, or people with a major ownership transformation (a.k.a. a “Medicare identity crisis”). But now, if you’re dusting off your billing privileges after a hiatus, get ready for some serious oversight. CMS will keep a sharp eye on your claims for anywhere from 30 days to a full year. It’s like being on the first day of school all over again, with CMS as your overly concerned teacher, making sure you’ve got your homework in order.
But wait—what does this have to do with “swing beds?” A “swing bed” is a bed in a critical access hospital (CAH) that “swings” between acute care and skilled nursing care, primarily in rural hospitals. But hold onto your hats, because “swing beds” have become the center of a whole other debate in the Medicare world. CMS reimburses these rural hospitals at rates that are much higher than those for standard skilled nursing facilities (SNFs)—five times higher, to be exact. The average daily reimbursement for skilled nursing in a “swing bed” is a jaw-dropping $1,845.69, while a regular SNF gets just $343.67. That’s like paying for a five-star resort while your neighbor stays at a budget motel. And for the government’s wallet, it adds up quickly, with the feds estimating a $7.7 billion overspend on swing beds.
The Health and Human Services Office of Inspector General (OIG) argues that Medicare could save billions if swing-bed care was reimbursed at the same rates as SNFs. But rural healthcare advocates push back, saying that “swing beds” are a lifeline for rural hospitals, allowing them to offer skilled care to patients who otherwise might have to travel far for treatment. Rural hospitals, serving older, poorer, and sicker populations, rely on swing beds to stay afloat. Without them, many of these hospitals might close, leaving rural America without access to critical care—a healthcare desert, if you will.
So, what’s the solution? Well, CMS is at the crossroads, grappling with how to balance the financial impact of these high reimbursements against the real need for swing beds. While the OIG’s audit suggests that cutting “swing bed” reimbursements could save Medicare billions, the loss of these beds could spell disaster for rural healthcare access. It’s like a high-stakes game of “how much oversight is too much?”
Back to our reactivating providers: if you’re in Arizona, California, Nevada, or Texas, and you’re one of those rural providers thinking of reactivating your Medicare billing privileges, be prepared. Your paperwork better be pristine, because CMS is likely to scrutinize everything you submit. And don’t think you’ll just skate by without a second glance—CMS keeps a list of compliant and non-compliant providers. It’s like the “Medicare honor roll” or, worse, the “Medicare detention list.” And while swing beds continue to swing between being a necessary service or an overpaid luxury, one thing is clear: whether you’re reactivating your billing privileges or running a rural hospital with “swing beds,” keeping up with CMS regulations is no easy feat.
In the end, the government has to figure out how to control costs while making sure rural residents aren’t left stranded without healthcare. For now, “swing beds” and reactivating Medicare providers remain in CMS’s crosshairs, with no easy answers in sight. So, if you’re in the rural healthcare business, you might want to consider wearing your best compliance hat—preferably one that’s sturdy enough to handle a little extra scrutiny.
And if you work with “swing beds,” know that your reimbursement rates are getting scrutinized.