Department of Health and Human Services

OFFICE OF 

INSPECTOR GENERAL 

M B
EDICARE  ENEFICIARY 

A S N
CCESS TO  KILLED  URSING 

F :  2004 

ACILITIES
Daniel R. Levinson

Inspector General 

July  2006 

OEI-02-04-00270
 Office of Inspector General 

http://oig.hhs.gov 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, 
as amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs.  This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides all auditing services for HHS, either by 
conducting audits with its own audit resources or by overseeing audit work done by others. 
Audits examine the performance of HHS programs and/or its grantees and contractors 
in carrying out their respective responsibilities and are intended to provide independent 
assessments of HHS programs and operations.  These assessments help reduce waste, 
abuse, and mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on 
significant issues.  Specifically, these evaluations focus on preventing fraud, waste, or 
abuse and promoting economy, efficiency, and effectiveness in departmental programs.  
To promote impact, the reports also present practical recommendations for improving 
program operations. 
Office of Investigations 
The OIG's Office of Investigations (OI) conducts criminal, civil, and administrative 
investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries 
and of unjust enrichment by providers.  The investigative efforts of OI lead to criminal 
convictions, administrative sanctions, or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support in OIG's internal operations. OCIG imposes program exclusions and civil 
monetary penalties on health care providers and litigates those actions within HHS. 
OCIG also represents OIG in the global settlement of cases arising under the Civil False 
Claims Act, develops and monitors corporate integrity agreements, develops compliance 
program guidances, renders advisory opinions on OIG sanctions to the health care 
community, and issues fraud alerts and other industry guidance.  I N T R O D U C T I O N
  E X E C U T I V E   S U M M A R Y  

OBJECTIVE 
To assess Medicare beneficiaries access to skilled nursing facilities 
(SNFs) since the implementation of the prospective payment system. 
BACKGROUND 
This study is a followup to a series of earlier studies conducted by the 
Office of Inspector General (OIG) on access to skilled nursing for 
Medicare beneficiaries who are discharged from hospitals to SNFs.  In 
1997, the Centers for Medicare & Medicaid Services (CMS) began 
implementing a prospective payment system for SNFs. In 1999, CMS 
asked OIG to identify any early effects the new payment system may be 
having on Medicare beneficiaries access to SNFs.  This series is part of 
OIGs ongoing commitment to monitor beneficiaries access to SNF care. 
The Balanced Budget Act of 1997 required payments for skilled nursing 
care to be made on a prospective basis.  The prospective payments rates 
are determined by Resource Utilization Groups (RUGs).  SNFs are 
required to classify each beneficiary into 1 of 44 RUGs based on their 
care and resource needs.  Each RUG represents a different Medicare 
payment rate. 
This inspection is based on data from two sources:  structured 
interviews with 256 hospital discharge planners who have firsthand 
experience placing Medicare beneficiaries in SNFs, and an analysis of   
5 years of Medicare data on beneficiaries who were discharged from a 
hospital to a SNF. 
FINDINGS 
Most Medicare beneficiaries have access to skilled nursing facilities.  
Eighty-four percent of discharge planners report that they are able to 
place all of their Medicare beneficiaries who need care in a SNF in a 
typical month. This is a statistically significant increase from our 2001 
study, in which 73 percent of discharge planners reported being able to 
place all of their Medicare beneficiaries who need care in a SNF.  
Further, Medicare data show no large changes that may indicate a 
decline in access for beneficiaries with certain medical conditions who 
were discharged from a hospital to a SNF in the past 5 years.  We define 
a large change to be 1 percentage point or greater or 1 day or longer. A 
decrease in the proportion of Medicare beneficiaries with certain 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  i    E X E C U T I V E   S U M M A R Y  
medical conditions being placed in SNFs might indicate that 
beneficiaries are experiencing a decline in access to SNF care.  We found 
no large decreases in the proportion of Medicare beneficiaries with 9 of 
the 10 most common Diagnosis Related Groups (DRG) and 8 of the 10 
most common RUGs over the past 5 years.  Similarly, an increase in the 
average length of stay in the hospital or an increase in the average 
length of time between hospital discharge and the start of SNF care 
might indicate a decline in access.  We found no large increases in either 
of these measures for any of the 10 most common DRGs or for any of the 
10 most common RUGs since the implementation of the prospective 
payment system.  
However, beneficiaries with certain medical conditions or service 
needs may experience delays. Thirty-five percent of discharge 
planners report having Medicare beneficiaries who experience delays at 
least sometimes before being placed in a SNF.  Discharge planners 
report that Medicare beneficiaries needing intravenous (IV) antibiotics 
and/or expensive drugs, wound care, a ventilator, or dialysis, as well as 
beneficiaries with behavior problems, are most often delayed before 
being placed in a SNF. Discharge planners who report delays placing 
Medicare beneficiaries in SNFs commonly explain that the cost of 
providing these services or Medicare reimbursement is the reason for 
placement delays. 
Differences in placement rates and length of stay between 
beneficiaries in urban and rural areas and beneficiaries placed in 
nonprofit and for-profit facilities were detected. We analyzed the 
proportion of Medicare beneficiaries with certain medical conditions in 
SNFs in urban and rural areas to see if there were any large 
differences, compared to the proportion of all Medicare beneficiaries in 
SNFs in urban and rural areas. We found that beneficiaries with 
certain medical conditions are placed more frequently in SNFs in urban 
or rural areas as compared to the overall population.  Specifically, for 3 
of the 10 most common RUGs, a greater proportion of beneficiaries were 
in SNFs in urban areas.  Conversely, for another 2 of the 10 RUGs, a 
greater proportion of beneficiaries were in SNFs in rural areas.  
Additionally, Medicare data show that beneficiaries with certain 
medical conditions in urban areas have longer average lengths of stay in 
the hospital than beneficiaries with the same conditions in rural areas. 
We also found that beneficiaries with certain medical conditions are 
more frequently placed in nonprofit or for-profit SNFs as compared to 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  ii  E X E C U T I V E   S U M M A R Y  
the overall population.  Specifically, for 2 of the 10 most common RUGs, 
a greater proportion of beneficiaries were in nonprofit facilities. For 
another 3 of the 10 RUGs, a greater proportion of beneficiaries were in 
for-profit facilities. 
CONCLUSION 
We continue to find that Medicare beneficiaries discharged from 
hospitals have access to SNFs, as evidenced by a significant increase in 
the proportion of discharge planners who report that they are able to 
place all their beneficiaries in SNFs. Additionally, we find that 
Medicare data show no large changes that may indicate a decline in 
access to care for beneficiaries with the most common medical 
conditions and/or service needs discharged to SNFs in the past 5 years. 
At the same time, we find that discharge planners report that 
beneficiaries with certain medical conditions or service needs may 
experience placement delays.   
These findings are similar to the findings in our prior three reports, 
suggesting that, overall, the prospective payment system has not 
resulted in reduced access to care.  We encourage CMS to continue to 
monitor access to SNF care.  In particular, CMS might closely monitor 
beneficiaries who experience delays in accessing care, including those 
who need IV antibiotics and/or expensive drugs, complex wound care, a 
ventilator, or dialysis, and those who have behavior problems. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  iii    T A B L E   O F   C O N T E N T S  

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  i

I N T RO DUC T IO N  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

F I N D IN G S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

Most Medicare beneficiaries have access to 

skilled nursing facilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8  

Beneficiaries with certain medical conditions may   

experience delays  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

Differences in access exist betweenurban and rural areas  

and between nonprofit and for-profit facilities . . . . . . . . . . . . . . .  14

CONC LUSION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

A:  RUG Classification System. . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

B:  Confidence Intervalsfor Key Findings. . . . . . . . . . . . . . . . . . .  18

C:  Department of AgriculturesUrban Influence Codes. . . . . . . .  19

D:  Analysis of Most Common DRGs and RUGs  . . . . . . . . . . . . . .  20

A C K NO WL E D G M E N T S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36
   I N T R O D U C T I O N  

OBJECTIVE 
To assess Medicare beneficiaries access to skilled nursing facilities 
(SNFs) since the implementation of the prospective payment system. 
BACKGROUND 
This study is a followup to a series of earlier studies conducted by the 
Office of Inspector General (OIG).  In 1997, the Centers for Medicare & 
Medicaid Services (CMS) began implementing a prospective payment 
system for SNFs. In 1999, CMS asked OIG to identify any early effects 
the new payment system might be having on Medicare beneficiaries 
access to SNFs.   
In response, OIG conducted a series of studies on access to SNFs for 
Medicare beneficiaries who are discharged from hospitals.  This series is 
part of OIGs ongoing commitment to monitor beneficiaries access to 
SNFs.  The Medicare Payment Advisory Commission has also 
emphasized the importance of these reports and of continuing to 
monitor access to care for Medicare beneficiaries following 
hospitalization.1 
Medicare Skilled Nursing Facilities 
A SNF provides skilled nursing care and related services to residents 
who require medical or nursing care, or to injured, disabled, or sick 
persons who require rehabilitation services.2  Care includes services of 
skilled medical personnel, such as registered nurses and professional 
therapists. This care is available 24 hours a day, is ordered by a doctor, 
and requires a treatment plan. A SNF may be freestanding or it may be 
a distinct part of a hospital. 
Medicare Part A covers SNF care under certain conditions.  These 
conditions include a requirement of daily skilled nursing or 
rehabilitation services, a prior 3-consecutive-day stay in a hospital, 
which is determined to have been medically necessary, admission to the 
SNF within a 30-day period after leaving the hospital, and treatment 
for the same condition that was treated in the hospital.  SNF care 
provided under Medicare is limited to a benefit period of 100 days, with 
1 Medicare Payment Advisory Commission (MedPAC), Report to Congress:  Medicare 

Payment Policy March 2004, 2004.  

2 42 U.S.C.  1395i-3(a). 

  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  1  I N T R O D U C T I O N  
a copayment required for days 21 through 100.3  After the Medicare 
100-day SNF Part A benefit runs out, the Medicare Part B benefit 
continues to pay for Part B-covered services furnished by a SNF. 
SNF Prospective Payment System 
The Balanced Budget Act of 1997 (BBA) requires payments for skilled 
nursing care to be made on a prospective basis.  Accordingly, SNFs are 
now paid through prospective, case-mix adjusted per diem payments 
that cover routine, ancillary, and capital-related costs, including most 
items and services for which payment was previously made under 
Medicare Part B.   
Under the prospective payment system, SNFs are required to classify 
residents into 1 of 44 Resource Utilization Groups (RUGs), which 
determine payment rates.  The RUGs are divided into seven major 
categories:  special rehabilitation, extensive services, special care, 
clinically complex, impaired cognition, behavior problems, and reduced 
physical function.4  Appendix A provides a more detailed description of 
the RUGs.  
Changes in the SNF Prospective Payment System 
Congress has made several temporary adjustments to the prospective 
payment system since its inception. In accordance with the Balanced 
Budget and Refinement Act5 and the Benefits Improvement and 
Protection Act,6 the following payment changes were applied to 
selected RUGs and remained in effect until January 1, 2006:  
o 	 an increase of 20 percent in the payment rate for 15 RUGs, 
including those for extensive services, special care, clinically 
complex care, as well as 3 RUGs in the special rehabilitation 
category; and 
3 A benefit period is a period of time for measuring the use of insurance benefits.  It is a period

of consecutive days during which covered services furnished to a patient may be paid for by

the hospital insurance plan.  The term benefit period is synonymous with spell of illness.

4 To determine the RUG to which a resident belongs, SNFs must complete the Minimum Data 

Set 2.0 assessment, which includes a standardized set of clinical and functioning status

measures. SNFs complete this assessment for all patients at scheduled intervals during their 

stay. 

5 Medicare, Medicaid, and SCHIP Balanced Budget and Refinement Act of 1999, Pub. L.        

No. 106-113, 113 Stat. 1501.  

6 Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, Pub. L. 

No. 106-554, 114 Stat. 2763. 

  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004	 2  I N T R O D U C T I O N  
o 	 an increase of 6.7 percent in the payment rate for 
14 rehabilitation RUGs. The other RUGs increased in the BBA 
maintained the 20-percent increase. 
Both increases expired when CMS adopted the RUG-53 classification 
system on January 1, 2006.7 
In accordance with the Balanced Budget and Refinement Act and the 
Benefits Improvement and Protection Act, the following two changes 
applied to all Medicare SNF beneficiaries and remained in effect until 
October 1, 2002: 
o 	 an increase of 4 percent in the per diem payment rate for all 
RUGs for fiscal years 2001 and 2002, and 
o 	 an increase of 16.66 percent in the nursing home component of the 
payment rate for all RUGs for April 2001 through September 
2002. 
Recent Trends in SNF Care 
Between fiscal years 1992 and 2002, expenditures for Medicare SNF 
payments increased at an average rate of 15 percent annually, with a 
substantial dip in spending occurring in fiscal years 1999 and 2000.  See 
Chart 1 below. Total Medicare spending for SNFs in fiscal year 2004 
was estimated at $15.7 billion.8 
16 
CHART 1  14 
Medicare Spending for  12 
Skilled Nursing 
10 
Facilities 19922004  ess) 
nditurbillion 68  
pen 
Exs i 4 
ual ollar 2 
nd
n( 0 
A
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 
Fiscal Year 
  Source: CMS Statistics Publications, Office of Research, Development and Information. 
7 70 FR 45026, 45031 (August 4, 2005). 
8 CMS.  Office of Financial Management, Office of the Actuary. Available online at  
www.cms.hhs.gov. Accessed December 28, 2005.   
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004	 3  I N T R O D U C T I O N  
Medicare data further show large increases in the total number of 
Medicare SNF beds since 2000.  In 2000, there were a total of 939,356 
Medicare SNF beds, which increased by 53 percent to 1,437,400 in 2004.  
See Table 1 below. 
Table 1:  Number of SNF Beds, 2000 2004 
Percentage 
2000  2001  2002  2003  2004  change 
Medicare 
939,356  1,105,503  1,260,685  1,372,010  1,437,400  53.0% 
Beds 
Total 
1,658,032  1,653,997  1,666,051  1,672,034  1,677,614  1.2% 
Beds* 
*Includes both certified and noncertified. 
Source:  Health Care Information System. 
Finally, Medicare data show that more than 1,763,000 beneficiaries 
received SNF care in 2004a 20-percent increase from 2000, when 
more than 1,468,000 beneficiaries received SNF care. 
Discharge Planners 
Federal regulations require all hospitals to offer discharge planning 
services.9  These services are developed by, or under the supervision of, 
a registered professional nurse, social worker, or other appropriately 
qualified personnel.  In most hospitals, the social work, case 
management, or utilization review department has primary 
responsibility for discharge planning.  Discharge planners conduct a 
patient assessment and meet with utilization review staff, the patients 
nurses and physicians, and other relevant interdisciplinary team 
members to identify patients who are likely to suffer adverse health 
consequences in the absence of adequate discharge planning.  Discharge 
planners then evaluate these patients likely need for posthospital 
services and the availability of these services. 
9 42 CFR  482.43. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  4  I N T R O D U C T I O N  
Prior Work on Access to Skilled Nursing Facilities 
OIG released three reports from 1999 to 2001 on access to SNFs for 
Medicare beneficiaries who were discharged from hospitals.10  The most 
recent report found that most Medicare beneficiaries generally did not 
have problems obtaining SNF care.  However, discharge planners 
commonly reported that beneficiaries requiring intravenous (IV) 
antibiotics and/or expensive drugs and those with medically complex 
conditions experienced delays being placed in a SNF. These findings 
were consistent with those from the earlier studies.  
SCOPE AND METHODOLOGY 
We based this study on data from two sources:  structured interviews 
with hospital discharge planners who have firsthand experience placing 
Medicare beneficiaries in SNFs, and an analysis of Medicare data for 
beneficiaries who were discharged from the hospital to a SNF.  
Structured Interviews 
We selected a random sample of 300 acute care hospitals with 30 or 
more beds from the 50 States and the District of Columbia.  We found 
that 15 of these hospitals were in fact not acute care hospitals; were 
pediatric, psychiatric, or cancer care centers; or hospitals that were 
bankrupt or no longer qualified to meet the minimum bed standard.   
Of the remaining 285 hospitals, we received responses from 256, a    
90-percent response rate.  We conducted structured interviews with the 
discharge planner or his or her designee from each hospital.  We asked 
discharge planners about their experiences with placing Medicare 
beneficiaries in SNFs and about the medical conditions and/or service 
needs of beneficiaries they are unable to place or who experience delays. 
We conducted these interviews between December 2004 and March 
2005. Note that this is the same sample of hospitals used in the OIG 
study Medicare Beneficiary Access to Home Health Agencies:  2004 
(OEI-02-04-00260).  Appendix B provides confidence intervals for key 
findings. 
For relevant questions, we determined whether there were any 
statistical differences between responses to our current interviews and 
10 OIG. Early Effects of the Prospective Payment System on Access to SNFs,                        
OEI-02-99-00400, August 1999; Medicare Beneficiary Access to SNF:  2000, 
OEI-02-00-00330, September 2000; and Medicare Beneficiary Access to SNF:  2001, 
OEI-02-01-00160, July 2001. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  5  I N T R O D U C T I O N  
responses to similar questions from our 2001 study.  Additionally, we 
compared key characteristics of the hospitals in our current sample with 
those in our 2001 sample.  Specifically, we compared the number and 
type of beds, facility ownership, and whether the hospital was in an 
urban or rural area.  The differences between the samples are within 
statistical sampling variation. 
Analysis of Medicare Data 
We used the most up-to-date Medicare data from CMSs National 
Claims History File that were available at the start of the study.  We 
identified all beneficiaries who:  (1) had a paid SNF claim between April 
1, 2003, and March 31, 2004; and (2) had a hospital discharge within   
30 days prior to their SNF claim.11 We identified all beneficiaries who 
met these criteria for each year starting with April 1, 1999. 
Based on these data, we analyzed several measures to determine 
whether there have been any large changes in beneficiaries access to 
SNFs since the implementation of the prospective payment system.  We 
define a large change to be 1 percentage point or greater or 1 day or 
longer in these analyses.  We analyzed the following measures for the  
5-year period: 
1. 	 the proportion of Medicare beneficiaries who were discharged from 
a hospital to a SNF for the 10 most common Diagnosis Related 
Groups (DRG)12 and the 10 most common RUGs to assess whether 
beneficiaries with certain medical conditions are being placed in 
SNFs since the implementation of the prospective payment 
system,13 
2. 	 beneficiaries average length of stay in the hospital for the 10 most 
common DRGs and the 10 most common RUGs to assess whether 
certain beneficiaries are experiencing longer delays before being 
11 Note that we refer to this year of data as 2004 and that each year starts with April 1 of the 
prior year and ends with March 31 of that year. The timeframe used in this study (April 1 to 
March 31) differs from the timeframe used in previous OIG studies on access to SNFs.  These 
studies were based on data from the first quarter of each year, whereas this study is based on 
an entire year of data. 
12 Most hospitals are paid a fixed amount for each beneficiary depending upon the DRG to 
which the beneficiary is assigned.  A DRG is assigned based on a beneficiarys diagnosis, 
surgery, age, discharge destination, and sex. Each DRG has a weight that reflects the relative 
cost, across all hospitals, of treating cases classified in that DRG. 
13 We found little change in the 10 most common DRGs and RUGs in each year.  The 10 most 
common DRGs represent approximately 35 percent of all beneficiaries each year and the       
10 most common RUGs represent approximately 84 percent of all beneficiaries each year. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004	 6  I N T R O D U C T I O N  
discharged to a SNF since the implementation of the prospective 
payment system, and 
3. 	 beneficiaries average length of time in days between hospital 
discharge and the start of SNF care for the 10 most common DRGs 
and the 10 most common RUGs to assess whether certain 
beneficiaries are experiencing longer average times between 
discharge from a hospital and being placed in a SNF since the 
implementation of the prospective payment system. 
We then analyzed these measures to determine whether there are large 
differences between beneficiaries in urban and rural areas and between 
beneficiaries who were placed in nonprofit and for-profit SNFs.  Using 
the Urban Influence Codes developed by the U.S. Department of 
Agriculture, we divided the facilities, based on their addresses, into 
urban and rural areas. Appendix C provides a more detailed description 
of the Urban Influence Codes.  Using data from CMSs Online Survey 
Certification and Reporting system, we determined which beneficiaries 
were placed in nonprofit and for-profit SNFs. 
Specifically, we analyzed the proportion of Medicare beneficiaries with 
certain medical conditions receiving SNF care in urban and rural areas 
to see if there were any large differences compared to the proportion of 
all Medicare beneficiaries in SNFs in urban and rural areas. If the 
proportion of beneficiaries with a certain DRG or RUG differed from the 
proportion of all beneficiaries in urban and rural areas by 5 or more 
percentage points, we considered it to be a large difference. We 
conducted a similar analysis of the proportion of Medicare beneficiaries 
who were placed in nonprofit and for-profit SNFs.  We conducted these 
analyses for 2004.     
Standards 
Our review was conducted in accordance with the Quality Standards 
for Inspections issued by the Presidents Council on Integrity and 
Efficiency and the Executive Council on Integrity and Efficiency. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004	 7    F I N D I N G S  
Most Medicare beneficiaries have access to  Eighty-four percent of discharge 
skilled nursing facilities  planners report that all beneficiaries 
can be placed 
As shown in Chart 2, 84 percent of discharge planners report that they 
are able to place all of their Medicare beneficiaries who need care in a 
SNF in a typical month. This is a statistically significant increase from 
our 2001 study, in which 73 percent of discharge planners reported 
being able to place all of their Medicare beneficiaries who needed care in 
a SNF.14 
Additionally, 10 percent of discharge planners report not being able to 
place up to 5 percent of their Medicare beneficiaries, while another   
5 percent report not being able to place more than 5 percent of their 
Medicare beneficiaries in a typical month.  In total, discharge planners 
in our sample are not able to place about 0.5 percent of all their 
Medicare beneficiaries (108 of 21,323) who need skilled care in a typical 
month. Discharge planners most commonly explain that these 
beneficiaries typically stay in the hospital, go home, or enter home 
health or hospice care. 
CHART 2: 
Proportion of 
 84% Can Place All
Discharge  84%
Planners Placing 
Medicare   10% Cannot Place 15 
Beneficiaries in  Percent
SNFs 
 5% Cannot Place More 
Than 5 Percent
 2% Don't Know 
2% 
n=256 
5% 
10% 
Note: Total does not equal 100 percent due to rounding. 
Source:  OIG analysis of discharge planner interviews, 2005. 
14 In a 2-tailed t-test, this difference was significant at the 95-percent confidence level.   
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  8  F I N D I N G S  
Discharge planners also generally report that the supply of SNF beds in 
their area is adequate.  Specifically, 73 percent of discharge planners 
report that there are enough SNF beds (including hospital swing beds) 
in their area for Medicare beneficiaries.  Twenty-three percent of 
discharge planners report that, on average, they have to contact    
1 facility to place a Medicare beneficiary in a SNF.  An additional  
35 percent report they have to contact an average of 2 facilities,  
19 percent report they have to contact 3 facilities, and 23 percent report 
they have to contact 4 or more facilities. 
Medicare data show no large changes that may indicate a decline in access  
Medicare data show no large changes that may indicate a decline in access  
for beneficiaries with certain medical conditions who were discharged to 
SNF care in the past 5 years.  Again, we define a large change in these 
analyses to be 1 percentage point or greater or 1 day or longer. 
Diagnosis Related Groups.  A decrease in the proportion of Medicare 
beneficiaries with a specific DRG who are discharged from the hospital 
to SNF care might indicate that beneficiaries with certain medical 
conditions are experiencing a decline in access to SNF care. However, 
we found no large decreases in the proportion of Medicare beneficiaries 
who were discharged from the hospital to a SNF for 9 of the 10 most 
common DRGs over the past 5 years.  See Table 2 on the following page. 
One exception was DRG 014 (intracranial hemorrhage or cerebral 
infarction), which has decreased by more than 1 percentage point since 
2000. This decrease may be explained by a change in the definition of 
DRG 014, or possible miscoding of this particular DRG.15 
15 DRG 014 was designated a postacute transfer DRG in 2001.  The purpose of the transfer 
policy is to avoid providing an incentive for a hospital to transfer a beneficiary to another 
hospital early in the beneficiarys stay in order to minimize costs while still receiving the full 
DRG payment.  A recent OIG audit report (A-04-04-03000) found that hospitals did not always 
comply with Medicares postacute transfer policy and improperly coded transfers to postacute 
care as discharges to home.  Additionally, DRG 014 was redefined in October 2000, when the 
diagnosis for transient ischemia was removed from the DRG. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  9  F I N D I N G S  

Table 2: Proportion of Medicare Beneficiaries Discharged to SNFs for the 10 Most Common 
DRGs (20002004)* 
Difference 
Initial Hospital DRG  2000  2001  2002  2003  2004  20002004 
DRG 209Major Joint and Limb  8.6%  8.6%  8.4%  8.3%  8.1%  -0.5 
Reattachment Procedures of Lower Extremity 
DRG 089Simple Pneumonia and Pleurisy  5.6 % 5.0%  5.5%  5.1%  5.6%  0.0 
DRG 127Heart Failure and Shock  4.6%  4.7%  4.5%  4.6%  4.6%  0.0 
DRG 210Hip and Femur Procedures Except  4.8%  4.7%  4.4%  4.3%  4.2%  -0.6 
Major Joint Procedures 
DRG 014Intracranial Hemorrhage or  5.9%  5.6%  5.2%  4.3%  3.4%  -2.5 
Cerebral Infarction 
DRG 320Kidney and Urinary Tract  2.3%  2.4%  2.5%  2.5%  2.8%  0.5 
Infections 
DRG 296Nutrition and Miscellaneous  2.8%  2.9%  3.1%  3.1%  2.7%  -0.1 
Metabolic Disorders 
DRG 462Rehabilitation  2.4%  2.5%  2.4%  2.4%  2.4%  0.0 
DRG 416Septicemia  2.2%  2.1%  2.1%  2.2%  2.4%  0.2 
DRG 088Chronic Obstructive Pulmonary  2.4%  2.3%  2.3%  2.2%  2.3%  -0.1 
Disease 
*Note that the year starts with April1 of the prior year and ends with March 31 of that year. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
Resource Utilization Groupings. Similar to our analysis of DRGs, a 
decrease in the proportion of Medicare beneficiaries in a RUG might 
indicate that beneficiaries with certain service needs are experiencing a 
decline in access to SNF care.  Again, we found no substantial decreases 
in the proportion of Medicare beneficiaries who were discharged from a 
hospital to a SNF for 8 of the 10 most common RUGs over the past    
5 years.  Two exceptions were RHB (Special Rehab, High 812) and 
RMB (Special Rehab, Medium 814), which decreased by 1.2 and    
1.7 percentage points, respectively. See Table 3 on the following page.  
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Table 3: Proportion of Medicare Beneficiaries Discharged to SNFs for the 10 Most Common 
RUGs (20002004)* 
Difference  
RUG  2000  2001  2002  2003  2004  20002004 
RHC (Special Rehab, High 1318)  16.0%  17.4%  18.5%  18.8%  19.1%  3.1 
RHB (Special Rehab, High 812)  17.9% 18.5% 18.2% 17.7% 16.7% -1.2 
RVB (Special Rehab, Very High 915)  9.6%  7.7%  8.9%  9.8%  11.3% 1.7 
SE2 (Extensive Care 23)  6.6%  6.4%  7.2%  7.4%  7.0% 0.4 
RMB (Special Rehab, Medium 814)  8.4%  9.0%  8.4%  7.4%  6.7% -1.7 
SE3 (Extensive Care 45)  5.1%  4.9%  5.5%  6.1%  6.3% 1.2 
RHA (Special Rehab, High 47)  6.6%  7.2%  6.3%  6.1%  5.7% -0.9 
RMC (Special Rehab, Medium 518)  4.8%  4.8%  4.9%  4.6%  4.3% -0.5 
RUB (Special Rehab, Ultra High 915)  3.1%  2.7%  2.5%  2.9%  3.8% 0.7 
RVA (Special Rehab, Very High 48)  3.6%  3.3%  3.0%  3.1%  3.4% -0.2 
*Note that the year starts with April1 of the prior year and ends with March 31 of that year. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
Average length of stay in the hospital. An increase in the average length of 
stay in the hospital might indicate that beneficiaries with certain 
medical conditions or service needs are experiencing a decline in access 
to SNF care.  However, we found no large increases in average length of 
stay in the hospital for any of the 10 most common DRGs or for any of 
the 10 most common RUGs.  In fact, the average length of stay for all 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  11  F I N D I N G
 S  
but 2 of the 10 most common DRGs and all of the 10 most common 
RUGs either decreased or stayed the same since the implementation of 
the prospective payment system.  See Appendix D, Tables 7 and 8.16 
Average length of time between hospital discharge and the start of SNF care. 
Similarly, an increase in the average length of time between hospital 
discharge and the start of SNF care might indicate that beneficiaries 
with certain medical conditions or service needs are experiencing a 
decline in access. Again, we found no large increases in the average 
length of time between hospital discharge and the start of SNF care for 
any of the 10 most common DRGs or for any of the 10 most common 
RUGs.  The average length of time between hospital discharge and the 
start of SNF care for all DRGs and all but two RUGs either decreased or 
stayed the same since the implementation of the prospective payment 
system. See Appendix D, Tables 9 and 10. 
Discharge planners report delays 
However, beneficiaries with certain medical 
placing certain beneficiaries 
conditions or service needs may experience 
Thirty-five percent of discharge 
delays 
planners report having Medicare 
beneficiaries who experience delays at least sometimes before being 
placed in a SNF.  This is not a statistically significant decrease from the 
2001 estimate, when 36 percent of discharge planners reported having 
Medicare beneficiaries who experienced delays at least sometimes. 
Ninety-one percent (234 of 256) of discharge planners report ever 
having Medicare beneficiaries who experience delays.  Of those, most 
(160 of 234) say that delays are associated with certain medical 
conditions or service needs.  See Table  4 on the following page. 
Specifically, discharge planners report that Medicare beneficiaries 
needing IV antibiotics and/or expensive drugs, wound care, a ventilator, 
or dialysis, as well as beneficiaries with behavior problems, are most 
often delayed before being placed in a SNF.  These medical conditions 
and service needs are similar to the ones that discharge planners report 
are associated with Medicare beneficiaries they can never place  
in a SNF. 
16 Not all tables in the appendixes are referenced in the report; some are provided for 
informational purposes only. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  12  F I N D I N G S  

Table 4: Medical Conditions/Service Needs Associated With 
Placement Delays 
Medical Condition/Service Need  n=160 
IV Antibiotics/Infusion/Drug Needs  67 
Wound Care/Decubitus Ulcer  50 
Behavior Problems   47 
Ventilator  46 
Renal Failure/Dialysis  43 
Methicillin-Resistant Staphylococcus Aureus  36 
(MRSA)/Vancomycin-Resistant Enterococcus 
(VRE)/Tuberculosis 
Note: Responses are not mutually exclusive. 
Source:  OIG analysis of discharge planner interviews, 2005. 
Discharge planners who report delays placing Medicare beneficiaries in 
SNFs commonly explain that the cost of providing these services or 
Medicare reimbursement is the reason for placement delays (73 of 160).  
Specifically, they report that costs exceed reimbursements for 
treatments such as IV antibiotics and/or expensive drugs or dialysis, 
and that having too many patients who need high levels of care strains 
the facility. Discharge planners also explain that special equipment 
needs, such as specialty beds or prostheses (63 of 160), and shortage of 
qualified staff (36 of 160), such as registered nurses or nurses trained to 
work with psychiatric patients, may cause delays placing beneficiaries.  
They explain that it may be more difficult to find a SNF that can 
provide the appropriate level and/or type of care. 
The medical conditions and service needs that discharge planners 
associate with beneficiaries whose placement is delayed, as well as the 
reasons for delays, are similar to the ones that discharge planners 
reported in previous studies.  In 2001, discharge planners reported that 
Medicare beneficiaries who needed IV antibiotics and/or expensive 
drugs, required a ventilator, required dialysis, had behavior problems, 
and/or had wound care needs most often experienced placement delays. 
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Differences in placement rates and length of  Beneficiaries with certain 
medical conditions are placed 
stay between beneficiaries in urban and rural 
more frequently in SNFs in urban 
areas and between beneficiaries in nonprofit and 
or rural areas 
for-profit facilities were detected 
We analyzed the proportion of 
Medicare beneficiaries with certain medical conditions in urban and 
rural areas to see if there were any large differences (i.e., 5 or more 
percentage points), compared to the proportion of all Medicare 
beneficiaries in SNFs in urban and rural areas. In 2004, 75 percent of 
all beneficiaries in SNFs were in urban areas and 25 percent were in 
rural areas. 
We found that beneficiaries with certain medical conditions are placed 
more frequently in SNFs in urban or rural areas.  Specifically, for 3 of 
the 10 most common RUGs, the proportion of beneficiaries in SNFs in 
urban areas was greater compared to all beneficiaries in SNFs in urban 
areas. Conversely, for another 2 of the 10 RUGs, the proportion of 
beneficiaries in SNFs in rural areas was greater compared to all 
beneficiaries in rural areas.17  See Appendix D, Table 12.  
Additionally, Medicare data show that beneficiaries with certain 
medical conditions in urban areas have longer average lengths of stay in 
the hospital than beneficiaries with the same conditions in rural areas. 
In 2004, beneficiaries in urban areas with 6 of the 10 most common 
DRGs and those with 7 of the 10 most common RUGs had an average 
length of stay in the hospital that was greater by at least 1 day than 
beneficiaries with these same conditions in rural areas.  See Appendix 
D, Tables 13 and 14. 
In our interviews, 54 percent of discharge planners report no difference 
between placing Medicare beneficiaries in urban and rural areas, 
whereas 30 percent of discharge planners report some differences.18 
Those who say that placing Medicare beneficiaries in urban areas is 
easier commonly explain that the capacity is greater in urban areas 
there are more facilities, more beds, more qualified staff, and easier 
access to equipment.  Those who report that placing Medicare 
17 In addition, the proportion of beneficiaries in urban areas with DRG 462 was at least          
5 percentage points greater than all beneficiaries in urban areas, whereas the proportion of 
beneficiaries in rural areas with DRG 089 was at least 5 percentage points greater than all 
beneficiaries in rural areas.  See Appendix D, Table 11. 
18 The remaining 16 percent of discharge planners report having no experience placing 
Medicare beneficiaries in both urban and rural areas or report that they dont know. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004 14  F I N D I N G S  
beneficiaries in rural areas is easier say that they often have better 
relationships with rural facilities. 
Beneficiaries with certain medical conditions are more frequently placed in 
nonprofit or for-profit SNFs 
We conducted a similar analysis of Medicare beneficiaries with certain 
medical conditions who are in nonprofit and for-profit SNFs to see if 
there were any large differences (i.e., 5 or more percentage points) 
compared to the proportion of all Medicare beneficiaries in nonprofit 
and for-profit SNFs.  In 2004, 33 percent of all Medicare beneficiaries 
were in nonprofit facilities and 63 percent were in for-profit facilities.19 
We found that beneficiaries with certain RUGs are placed more 
frequently in nonprofit or for-profit facilities, compared to all 
beneficiaries. Specifically, for 2 of the 10 most common RUGs, the 
proportion of beneficiaries in nonprofit facilities was greater compared 
to all beneficiaries in nonprofit facilities.  For another 3 of the 10 RUGs, 
the proportion of beneficiaries in for-profit facilities was greater 
compared to all beneficiaries in for-profit facilities.20  See Appendix D, 
Table 18. In addition, beneficiaries with 3 of the 10 most common RUGs 
in for-profit facilities have average lengths of stay in the hospital that 
were longer by at least 1 day than beneficiaries with these same 
conditions in nonprofit facilities.  See Appendix D, Table 20. 
19 The remaining 4 percent of beneficiaries were placed in Government facilities. 
20 In addition, the proportion of beneficiaries with DRG 209 in nonprofit facilities was at least 
5 percentage points greater than all beneficiaries in nonprofit facilities, whereas the 
proportion of beneficiaries with DRG 320 and DRG 462 in for-profit facilities was at least        
5 percentage points greater than all beneficiaries in for-profit facilities.  See Appendix D, 
Table 17. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  15    C O N C L U S I O N  

We continue to find that Medicare beneficiaries discharged from 
hospitals have access to SNFs, as evidenced by a significant increase in 
the proportion of discharge planners who report that they are able to 
place all their beneficiaries in SNFs. Additionally, we find that 
Medicare data show no large changes that may indicate a decline in 
access to care for beneficiaries with the most common medical 
conditions and/or service needs discharged to SNFs in the past 5 years. 
At the same time, we find that discharge planners report that 
beneficiaries with certain medical conditions or service needs may 
experience placement delays.   
These findings are similar to the findings in our prior three reports, 
suggesting that, overall, the prospective payment system has not 
resulted in reduced access to SNF care.  We encourage CMS to 
continue to monitor access to care. In particular, CMS might closely 
monitor beneficiaries who continue to experience delays in accessing 
care, including those who need IV antibiotics and/or expensive drugs, 
complex wound care, a ventilator, or dialysis, and those who have 
behavior problems.  
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  16    A P P E N D I X ~ A  
Resource Utilization Group Classification System 
SNFs are required to classify residents into 1 of 44 Resource Utilization Groups (RUGs), which 
determine payment rates.  The RUGs are divided into seven major categories.  To determine 
each residents RUG, SNFs must complete the Minimum Data Set 2.0 assessment, which 
includes a standardized set of clinical and functioning status measures. SNFs complete this 
assessment for every patient at scheduled intervals during his or her stay. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  17    A P P E N D I X   ~   B  
Confidence Intervals for Key Findings 
Table 5: Point Estimates and Confidence Intervals for Key Findings 
Key Findings  n  Point Estimate  Confidence Interval* 
Eighty-four percent of discharge planners report that they are  256  84%  +/-4.49 
able to place all of their Medicare beneficiaries who need care 
in a SNF in a typical month. 
Seventy-three percent of discharge planners report that there  256  73%  +/- 5.44 
are enough SNF beds (including hospital swing beds) in their 
area for Medicare beneficiaries. 
Twenty-three percent of discharge planners report that, on  256  23%  +/-5.16 
average, they have to contact one facility to place a Medicare 
beneficiary in a SNF. 
Thirty-five percent of discharge planners report having  256  35%  +/- 6.10 
Medicare beneficiaries who experience delays at least 
sometimes before being placed in a SNF. 
Most of the discharge planners who report ever having  234  68%  +/-5.98 
Medicare beneficiaries who experience delays (160 of 234)** 
say that delays are associated with certain medical conditions 
or service needs. 
Fifty-four percent of discharge planners report no difference  256  54%  +/-6.11 
between placing Medicare beneficiaries in urban and rural 
areas. 
*95 Percent confidence interval. 

** The denominator (i.e., 234) includes discharge planners who report having Medicare beneficiaries who experience delays at least sometimes and

discharge planners who report rarely having Medicare beneficiaries who experience delays.  H
 aving Medicare beneficiaries who experience delay
are  
Source:  OIG analysis of discharge planner interviews, 2005.

  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  18    AA PP PP EE NN DD II XX    ~~    DC   
Department of Agricultures Urban Influence Codes 
The Urban Influence Codes were developed by the Department of Agriculture Economic 
Research Service to take into account the geographic relationship of rural areas to larger urban 
economies. The Urban Influence Codes divide U.S. counties, county equivalents, and 
independent cities into 12 categories as described in the table below.  In our analysis, we 
considered the first 2 categories as urban areas and the remaining 10 categories as rural areas. 
This is similar to the method used by the Medicare Payment Advisory Commission in its June 
2001 Report to Congress:  Medicare in Rural America. 
Table 6: Urban Influence Codes 
Code  2003 Description  Designation 
1  In large metro area of 1+ million residents  Urban 
2  In small metro area of less than 1 million residents  Urban 
3  Micropolitan adjacent to large metro  Rural 
4  Noncore adjacent to large metro  Rural 
5  Micropolitan adjacent to small metro  Rural 
6  Noncore adjacent to small metro with own town  Rural 
7  Noncore adjacent to small metro no own town  Rural 
8  Micropolitan not adjacent to a metro area  Rural 
9  Noncore adjacent to micro with own town  Rural 
10  Noncore adjacent to micro with no own town  Rural 
11  Noncore not adjacent to metro or micro with own town  Rural 
12  Noncore not adjacent to metro or micro with no own town  Rural 
Source:  Economic Research Service, U.S. Department of Agriculture. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  19    A P P E N D I X   ~   D  
AA PP PP EE NN DD II XX ~  DD   
Analyses of Most Common DRGs and RUGs 
Table 7: Average Length of Hospital Stay in Days for the 10 Most Common DRGs      
(20002004)* 
Difference 
DRG  2000  2001  2002  2003  2004 
20002004 
DRG 209Major Joint and Limb  5.4  5.4  5.4  5.3  5.2  -0.2 
Reattachment Procedures of Lower 
Extremity 
DRG 089Simple Pneumonia and  7.6  7.4  7.4  7.2  7.2  -0.4 
Pleurisy, Age Greater Than 17, With 
Complications and Comorbidities 
DRG 127Heart Failure and Shock  8.0  7.9  7.8  7.7  7.5  -0.5 
DRG 210Hip and Femur Procedures  6.8  6.9  6.9  6.9  6.8  0 
Except Major Joint Procedures, Age 
Greater Than 17, With Complications and 
Comorbidities  
DRG 014Intracranial Hemorrhage or  8.1  8.1  8.1  8.5  8.4  0.3 
Cerebral Infarction 
DRG 320Kidney and Urinary Tract  6.7  6.6  6.6  6.4  6.3  -0.4 
Infections, Age Greater Than 17, With 
Complications and Comorbidities 
DRG 296Nutrition and Miscellaneous  7.1  7.1  7.0  6.8  6.6  -0.5 
Metabolic Disorders, Age Greater Than 17, 
With Complications and Comorbidities 
DRG 462Rehabilitation  16.5  16.1  16.0  16.5  16.5  0 
DRG 416Septicemia, Age Greater        9.5  9.5  9.5  9.5  9.6  0.1 
Than 17 
DRG 088Chronic Obstructive Pulmonary  7.3  7.3  7.2  7.2  7.2  -0.1 
Disease 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  20 
 A P P E N D I X ~ D  

Table 8: Average Length of Hospital Stay in Days for the 10 Most Common RUGs      
(20002004)* 
Difference 
RUG  2000  2001  2002  2003  2004 
20002004 
RHC (Special Rehab, High 1318)  10.0  10.1  9.9  9.9  9.9  -0.1 
RHB (Special Rehab, High 812)  8.5  8.5  8.5  8.4  8.3  -0.2 
RVB (Special Rehab, Very High 915)  8.6  8.5  8.6  8.6  8.6  0 
SE2 (Extensive Care 23)  9.3  9.3  9.1  8.8  8.7  -0.6 
RMB (Special Rehab, Medium 814)  9.0  8.9  8.9  8.8  8.6  -0.4 
SE3 (Extensive Care 45)  10.3  10.3  10.1  9.9  9.8  -0.5 
RHA (Special Rehab, High 47)  8.2  8.2  8.2  8.1  8.0  -0.2 
RMC (Special Rehab, Medium 1518)  10.7  10.7  10.6  10.5  10.4  -0.3 
RUB (Special Rehab, Ultra High 915)  9.2  9.3  9.1  9.2  9.2  0 
RVA (Special Rehab, Very High 48)  8.1  8.1  8.1  8.1  8.1  0 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  21 
 A P P E N D I X ~ D  

Table 9: Average Length of Time Between Hospital Discharge and the Start of SNF Care 
in Days, for the 10 Most Common DRGs (20002004)* 
Difference 
DRG  2000  2001  2002  2003  2004  20002004 
DRG 209Major Joint and Limb  0.1  0.1  0.1  0.1  0.1  0 
Reattachment Procedures of Lower 
Extremity 
DRG 089Simple Pneumonia and  0.4  0.4  0.4  0.4  0.3  -0.1 
Pleurisy, Age Greater Than 17, With 
Complications and Comorbidities 
DRG 127Heart Failure and Shock  0.6  0.6  0.6  0.6  0.6  0 
DRG 210Hip and Femur  0.2  0.2  0.2  0.1  0.2  0 
Procedures Except Major Joint 
Procedures, Age Greater Than 17, 
With Complications and 
Comorbidities  
DRG 014Intracranial Hemorrhage  0.4  0.4  0.4  0.4  0.4  0 
or Cerebral Infarction 
DRG 320Kidney and Urinary  0.4  0.4  0.4  0.4  0.3  -0.1 
Tract Infections, Age Greater Than 
17, With Complications and 
Comorbidities 
DRG 296Nutrition and  0.5  0.5  0.4  0.4  0.4  -0.1 
Miscellaneous Metabolic Disorders, 
Age Greater Than 17, With 
Complications and Comorbidities 
DRG 462Rehabilitation  0.8  0.9  0.8  0.8  0.8  0 
DRG 416Septicemia, Age Greater     0.3  0.3  0.3  0.3  0.3  0 
Than 17 
DRG 088Chronic Obstructive  0.6  0.7  0.7  0.7  0.6  0 
Pulmonary Disease 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  22 
 A P P E N D I X ~ D  

Table 10:  Average Length of Time Between Hospital Discharge and the Start of SNF Care 
in Days, for the 10 Most Common RUGs (20002004)* 
Difference 
RUG  2000  2001  2002  2003  2004  20002004 
RHC (Special Rehab, High 1318)  0.4  0.4  0.4  0.4  0.4  0 
RHB (Special Rehab, High 812)  0.4  0.4  0.4  0.4  0.4  0 
RVB (Special Rehab, Very High 915)  0.4  0.5  0.4  0.4  0.4  0 
SE2 (Extensive Care 23)  0.3  0.3  0.3  0.3  0.3  0 
RMB (Special Rehab, Medium 814)  0.4  0.5  0.4  0.4  0.4  0 
SE3 (Extensive Care 45)  0.3  0.3  0.3  0.2  0.2  -0.1 
RHA (Special Rehab, High 47)  0.5  0.5  0.5  0.5  0.6  0.1 
RMC (Special Rehab, Medium 1518)  0.4  0.4  0.4  0.4  0.4  0 
RUB (Special Rehab, Ultra High 915)  0.5  0.5  0.5  0.5  0.5  0 
RVA (Special Rehab, Very High 48)  0.5  0.5  0.5  0.6  0.6  0.1 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
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 A P P E N D I X ~ D  

Table 11:  Beneficiaries in Urban and Rural Areas for the 10 Most Common DRGs, 
Compared to All Beneficiaries, 2004* 
DRG  Urban  Rural 
DRG 209Major Joint and Limb Reattachment Procedures of Lower  71.9%  28.2% 
Extremity 
DRG 089Simple Pneumonia and Pleurisy, Age Greater Than 17, With  68.4%  31.6% 
Complications and Comorbidities 
DRG 127Heart Failure and Shock  73.7%  26.3% 
DRG 210Hip and Femur Procedures Except Major Joint Procedures,  74.7%  25.3% 
Age Greater Than 17, With Complications and Comorbidities  
DRG 014Intracranial Hemorrhage or Cerebral Infarction  75.2%  24.8% 
DRG 320Kidney and Urinary Tract Infections, Age Greater Than 17,  76.3%  23.7% 
With Complications and Comorbidities 
DRG 296Nutrition and Miscellaneous Metabolic Disorders, Age Greater  74.0%  26.0% 
Than 17, With Complications and Comorbidities 
DRG 462Rehabilitation  80.0%  20.1% 
DRG 416Septicemia, Age Greater Than 17  75.6%  24.4% 
DRG 088Chronic Obstructive Pulmonary Disease  70.2%  29.8% 
All Beneficiaries**  75.0%  25.1%
 *Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
**Total does not equal 100 percent due to rounding. 
The proportion of beneficiaries with this DRG differed from the proportion of all beneficiaries by at least 5 percentage points, which 
we considered to be a large difference. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  24  A P P E N D I X ~ D  

Table 12:  Beneficiaries in Urban and Rural Areas for the 10 Most Common RUGs, 
Compared to All Beneficiaries, 2004* 
RUG  Urban  Rural 
RHC (Special Rehab, High 1318)  77.7%  22.3% 
RHB (Special Rehab, High 812)  77.1%  22.9% 
RVB (Special Rehab, Very High 915)  86.4%  13.6% 
SE2 (Extensive Care 23)  69.5%  30.5% 
RMB (Special Rehab, Medium 814)  70.0%  30.0% 
SE3 (Extensive Care 45)  72.5%  27.5% 
RHA (Special Rehab, High 47)  75.8%  24.2% 
RMC (Special Rehab, Medium 1518)  68.4%  31.6% 
RUB (Special Rehab, Ultra High 915)  86.6%  13.4% 
RVA (Special Rehab, Very High 48)  82.8%  17.3% 
All Beneficiaries**  75.0%  25.1% 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
**Total does not equal 100 percent due to rounding. 
The proportion of beneficiaries with this DRG differed from the proportion of all beneficiaries by at least 5 percentage points, 
which we considered to be a large difference. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  25  A P P E N D I X ~ D  

Table 13:  Urban and Rural Differences in the Average Length of Hospital Stay in 
Days for the 10 Most Common DRGs, 2004* 
DRG  Urban  Rural 
DRG 209Major Joint and Limb Reattachment Procedures of Lower  5.3  5.1 
Extremity 
DRG 089Simple Pneumonia and Pleurisy, Age Greater Than 17,  7.6  6.4 
With Complications and Comorbidities 
DRG 127Heart Failure and Shock  7.9  6.5 
DRG 210Hip and Femur Procedures Except Major Joint  6.9  6.6 
Procedures, Age Greater Than 17, With Complications and 
Comorbidities  
DRG 014Intracranial Hemorrhage or Cerebral Infarction  8.8  7.4 
DRG 320Kidney and Urinary Tract Infections, Age Greater Than  6.5  5.7 
17, With Complications and Comorbidities 
DRG 296Nutrition and Miscellaneous Metabolic Disorders, Age  6.8  5.8 
Greater Than 17, With Complications and Comorbidities 
DRG 462Rehabilitation  16.6  16.5 
DRG 416Septicemia, Age Greater Than 17  10.0  8.1 
DRG 088Chronic Obstructive Pulmonary Disease  7.6  6.1 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
Note that these DRGs differed by 1 day or more. 

Source:  OIG analysis of CMSs National Claims History File, 2005.

  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  26  A P P E N D I X ~ D  

Table 14:  Urban and Rural Differences in the Average Length of Hospital Stay 
in Days for the 10 Most Common RUGs, 2004* 
RUG  Urban  Rural 
RHC (Special Rehab, High 1318)  10.2  8.9 
RHB (Special Rehab, High 812)  8.6  7.5 
RVB (Special Rehab, Very High 915)  8.7  8.0 
SE2 (Extensive Care 23)  9.3  7.2 
RMB (Special Rehab, Medium 814)  9.0  7.6 
SE3 (Extensive Care 45)  10.5  8.1 
RHA (Special Rehab, High 47)  8.2  7.2 
RMC (Special Rehab, Medium 1518)  11.1  8.8 
RUB (Special Rehab, Ultra High 915)  9.2  8.7 
RVA (Special Rehab, Very High 48)  8.2  7.5 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
Note that these DRGs differed by 1 day or more. 

Source:  OIG analysis of CMSs National Claims History File, 2005.

  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  27  A P P E N D I X ~ D  

Note that this table is for informational purposes only.  It is not referenced in the report. 
Table 15:  Urban and Rural Differences in the Average Length of Time Between 
Hospital Discharge and the Start of SNF Care in Days, for the 10 Most Common 
DRGs, 2004* 
DRG  Urban  Rural
DRG 209Major Joint and Limb Reattachment Procedures of  0.1  0.1 
Lower Extremity 
DRG 089Simple Pneumonia and Pleurisy, Age Greater Than  0.3  0.4 
17, With Complications and Comorbidities 
DRG 127Heart Failure and Shock  0.5  0.7 
DRG 210Hip and Femur Procedures Except Major Joint  0.2  0.2 
Procedures, Age Greater Than 17, With Complications and 
Comorbidities  
DRG 014Intracranial Hemorrhage or Cerebral Infarction  0.4  0.4 
DRG 320Kidney and Urinary Tract Infections, Age Greater  0.3  0.4 
Than 17, With Complications and Comorbidities 
DRG 296Nutrition and Miscellaneous Metabolic Disorders,  0.4  0.5 
Age Greater Than 17, With Complications and Comorbidities 
DRG 462Rehabilitation  0.8  1.0 
DRG 416Septicemia, Age Greater Than 17  0.3  0.3 
DRG 088Chronic Obstructive Pulmonary Disease  0.6  0.6 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  28  A P P E N D I X ~ D  

Note that this table is for informational purposes only.  It is not referenced in the report. 
Table 16:  Urban and Rural Differences in the Average Length of Time Between 
Hospital Discharge and the Start of SNF Care in Days, for the 10 Most Common 
RUGs, 2004* 
RUG  Urban  Rural 
RHC (Special Rehab, High 1318)  0.4  0.4 
RHB (Special Rehab, High 812)  0.4  0.5 
RVB (Special Rehab, Very High 915)  0.4  0.5 
SE2 (Extensive Care 23)  0.2  0.3 
RMB (Special Rehab, Medium 814)  0.4  0.5 
SE3 (Extensive Care 45)  0.2  0.2 
RHA (Special Rehab, High 47)  0.5  0.7 
RMC (Special Rehab, Medium 1518)  0.4  0.4 
RUB (Special Rehab, Ultra High 915)  0.4  0.6 
RVA (Special Rehab, Very High 48)  0.5  0.7 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  29  A P P E N D I X ~ D  

Table 17:  Beneficiaries in Nonprofit and For-Profit SNFs for the 10 Most 
Common DRGs, Compared to All Beneficiaries, 2004* 
DRG  Nonprofit  For-Profit 
DRG 209Major Joint and Limb Reattachment Procedures of  44.7%  50.3% 
Lower Extremity 
DRG 089Simple Pneumonia and Pleurisy, Age Greater Than  31.3%  64.0% 
17, With Complications and Comorbidities 
DRG 127Heart Failure and Shock  33.2%  62.5% 
DRG 210Hip and Femur Procedures Except Major Joint  35.0%  60.4% 
Procedures, Age Greater Than 17, With Complications and 
Comorbidities  
DRG 014Intracranial Hemorrhage or Cerebral Infarction  32.7%  62.8% 
DRG 320Kidney and Urinary Tract Infections, Age Greater  26.7%  69.2% 
Than 17, With Complications and Comorbidities 
DRG 296Nutrition and Miscellaneous Metabolic Disorders,  29.3%  66.6% 
Age Greater Than 17, With Complications and Comorbidities 
DRG 462Rehabilitation  28.9%  68.7% 
DRG 416Septicemia, Age Greater Than 17  30.3%  65.9% 
DRG 088Chronic Obstructive Pulmonary Disease  32.7%  62.9% 
All Beneficiaries**  33.1%  62.7% 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
**Note that 4.2 percent of beneficiaries were placed in government SNFs. 
The proportion of beneficiaries with this DRG differed from the proportion of all beneficiaries by at least 5 percentage 
points, which we considered to be a large difference. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  30  A P P E N D I X ~ D  

Table 18:  Beneficiaries in Nonprofit and For-Profit SNFs for the 10 Most 
Common RUGs, Compared to All Beneficiaries, 2004* 
RUG  Nonprofit  For-Profit 
RHC (Special Rehab, High 1318)  32.5%  63.7% 
RHB (Special Rehab, High 812)  39.5%  56.4% 
RVB (Special Rehab, Very High 915)  25.1%  73.0% 
SE2 (Extensive Care 23)  32.3%  61.8% 
RMB (Special Rehab, Medium 814)  43.8%  49.4% 
SE3 (Extensive Care 45)  33.0%  62.0% 
RHA (Special Rehab, High 47)  36.7%  58.9% 
RMC (Special Rehab, Medium 1518)  35.8%  58.1% 
RUB (Special Rehab, Ultra High 915)  20.2%  78.6% 
RVA (Special Rehab, Very High 48)  27.1%  70.0% 
All Beneficiaries**  33.1%  62.7% 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
**Note that 4.2 percent of beneficiaries were placed in government SNFs. 
The proportion of beneficiaries with this RUG differed from the proportion of all beneficiaries by at least 5 percentage 
points, which we considered to be a large difference. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  31  A P P E N D I X ~ D  

Note that this table is for informational purposes only.  It is not referenced in the report. 
Table 19:  Nonprofit and For-Profit Differences in the Average Length of 
Hospital Stay in Days for the 10 Most Common DRGs, 2004* 
DRG  Nonprofit  For-Profit 
DRG 209Major Joint and Limb Reattachment Procedures of  5.0  5.6 
Lower Extremity 
DRG 089Simple Pneumonia and Pleurisy, Age Greater  7.3  7.6 
Than 17, With Complications and Comorbidities 
DRG 127Heart Failure and Shock  7.6  7.8 
DRG 210Hip and Femur Procedures Except Major Joint  6.7  6.9 
Procedures, Age Greater Than 17, With Complications and 
Comorbidities  
DRG 014Intracranial Hemorrhage or Cerebral Infarction  8.0  8.9 
DRG 320Kidney and Urinary Tract Infections, Age Greater  6.3  6.4 
Than 17, With Complications and Comorbidities 
DRG 296Nutrition and Miscellaneous Metabolic Disorders,  6.6  6.7 
Age Greater Than 17, With Complications and Comorbidities 
DRG 462Rehabilitation  16.2  16.7 
DRG 416Septicemia, Age Greater Than 17  9.3  10.0 
DRG 088Chronic Obstructive Pulmonary Disease  7.4  7.5 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  32  A P P E N D I X ~ D  

Table 20:  Nonprofit and For-Profit Differences in the Average Length of 
Hospital Stay in Days for the 10 Most Common RUGs, 2004* 
RUG  Nonprofit  For-Profit 
RHC (Special Rehab, High 1318)  9.4  10.3 
RHB (Special Rehab, High 812)  8.0  8.7 
RVB (Special Rehab, Very High 915)  7.6  8.9 
SE2 (Extensive Care 23)  8.7  9.0 
RMB (Special Rehab, Medium 814)  8.6  8.9 
SE3 (Extensive Care 45)  9.6  10.6 
RHA (Special Rehab, High 47)  7.6  8.3 
RMC (Special Rehab, Medium 1518)  10.4  10.8 
RUB (Special Rehab, Ultra High 915)  8.3  9.5 
RVA (Special Rehab, Very High 48)  7.5  8.3 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
Note that these DRGs differed by one day or more. 

Source:  OIG analysis of CMSs National Claims History File, 2005.

  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  33  A P P E N D I X ~ D  

Note that this table is for informational purposes only.  It is not referenced in the report. 
Table 21:  Nonprofit and For-Profit Differences in the Average Length of Time 
Between Hospital Discharge and the Start of SNF Care in Days, for the 10 Most 
Common DRGs, 2004* 
DRG  Nonprofit  For-Profit 
DRG 209Major Joint and Limb Reattachment Procedures of  0.1  0.1 
Lower Extremity 
DRG 089Simple Pneumonia and Pleurisy, Age Greater  0.3  0.4 
Than 17, With Complications and Comorbidities 
DRG 127Heart Failure and Shock  0.5  0.6 
DRG 210Hip and Femur Procedures Except Major Joint  0.1  0.2 
Procedures, Age Greater Than 17, With Complications and 
Comorbidities  
DRG 014Intracranial Hemorrhage or Cerebral Infarction  0.4  0.5 
DRG 320Kidney and Urinary Tract Infections, Age Greater  0.3  0.4 
Than 17, With Complications and Comorbidities 
DRG 296Nutrition and Miscellaneous Metabolic Disorders,  0.4  0.4 
Age Greater Than 17, With Complications and Comorbidities 
DRG 462Rehabilitation  0.7  0.8 
DRG 416Septicemia, Age Greater Than 17  0.3  0.4 
DRG 088Chronic Obstructive Pulmonary Disease  0.6  0.7 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  34  A P P E N D I X ~ D  

Note that this table is for informational purposes only.  It is not referenced in the report. 
Table 22:  Nonprofit and For-Profit Differences in the Average Length of Time 
Between Hospital Discharge and the Start of SNF Care in Days, for the 10 Most 
Common RUGs, 2004* 
RUG  Nonprofit  For-Profit 
RHC (Special Rehab, High 1318)  0.3  0.4 
RHB (Special Rehab, High 812)  0.3  0.5 
RVB (Special Rehab, Very High 915)  0.3  0.5 
SE2 (Extensive Care 23)  0.2  0.3 
RMB (Special Rehab, Medium 814)  0.3  0.5 
SE3 (Extensive Care 45)  0.2  0.3 
RHA (Special Rehab, High 47)  0.4  0.7 
RMC (Special Rehab, Medium 1518)  0.3  0.4 
RUB (Special Rehab, Ultra High 915)  0.4  0.5 
RVA (Special Rehab, Very High 48)  0.4  0.6 
*Note that the year starts with April 1 of the prior year and ends with March 31 of that year. 
Source:  OIG analysis of CMSs National Claims History File, 2005. 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  35    A C K N O W L E D G M E N T S  

This report was prepared under the direction of Jodi Nudelman, 
Regional Inspector General for Evaluation and Inspections in the New 
York regional office.  Other principal Office of Evaluation and 
Inspections staff who contributed include: 
Vincent Greiber, Team Leader 
Natasha Besch-Turner, Program Analyst 
Sonjeya Fitzgerald, Program Analyst 
Nicole Gillette, Program Analyst 
Tricia Davis, Director, Medicare and Medicaid Branch 
Sandy Khoury, Program Specialist 
Technical Assistance  
Barbara Tedesco, Mathematical Statistician 
Scott Horning, Program Analyst 
  OEI-02-04-00270  MEDICARE BENEFICIARY ACCESS TO SKILLED NURSING FACILITIES:  2004  36