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 Important Resources


 Residents and Families


​Has your loved one been impacted by observation stays?

Share your story with us. Please be sure to fill out the release form.


 AHCA/NCAL Members


​Have observation stays impacted your residents and patients?

Contact Us and help us close this observation stay loophole.

Please be sure to fill out the release form.



 Press Releases


Skilled nursing care centers serve our most vulnerable citizens – frail elders and those with disabilities who need complex medical, rehabilitative, and restorative care, 24 hours a day, 7 days a week. But under the current Medicare law, thousands are not receiving critical nursing care and getting stuck with high medical bills after leaving the hospital.  

Hospital patients must be classified as an inpatient for at least three consecutive days in order for Medicare to pay for rehabilitation care in a skilled nursing care center. However, hospitals are increasingly holding patients under “observation,” an outpatient designation, rather than admitting them as inpatients. As a result, outpatients who need follow-up care do not qualify for Medicare coverage in a nursing center, leaving those in need of critical care on their own or in debt with thousands in out-of-pocket costs.

The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) continues to keep the observation stays issue one of its top advocacy priorities and supports legislation that will fix this confusing policy.

Learn more about the observation issue here and the impact on Medicare beneficiaries here and here.

Forbes Article on Three-Day Stay Rule
Dana Halvorson

Forbes Senior Contributor, Howard Gleckman, released an article entitled, “Are We Nearing The End Of Medicare’s Three-Day Rule That Makes Patients Pay For Skilled Nursing Care?” Gleckman focused on the August 4th tweet from the Centers for Medicare & Medicaid Services (CMS) Administrator, Seema Verma, in which she noted, “#Medicare beneficiary who requires skilled care in a nursing home?  Better be admitted for at least three days in the hospital first if you want the nursing home paid for.  Gov’t doesn’t always make sense.  We’re listening to feedback.” For more information about observation stays and the three-day stay requirement, please visit the AHCA/NCAL website.

Class-Action Lawsuit and Observation Stays Issue
Dana Halvorson

Earlier this week, Kaiser Health News published an article entitled, Class-Action Lawsuit Seeks To Let Medicare Patients Appeal Gap in Nursing Home Coverage, by Susan Jaffe.  In the article, Susan noted, “Monday [August 12], a trial begins in federal court in Hartford, Conn., where patients who were denied Medicare’s nursing home benefit are hoping to force the government to eliminate that exception.  A victory would clear the way for appeals from hundreds of thousands of people.  The class-action lawsuit was filed in 2011 by seven Medicare observation patients and their families against the Department of Health and Human Services.  Seven more plaintiffs later joined the case.”  Susan goes on to include that, “If they win, people with traditional Medicare who received observation care services for three days or longer since Jan. 1, 2009, could file appeals seeking reimbursement for bills Medicare would have paid had they been admitted to the hospital.  More than 1.3 million observation claims meet these criteria for the 10-year period through 2017, according to the most recently available government data.”  More on AHCA/NCAL’s work around the observation stays issue in general can be found here.

Amid OIG Report Release, CMS Unveils New Fact Sheet on 3-Day Rule Billing
Dana Halvorson

A section of the recently released Office of Inspector General (OIG) report on suggested changes to Department of Health and Human Services programs, among other items, said of 25 “significant” unimplemented recommendations is one that calls for the Centers for Medicare & Medicaid Services (CMS) to analyze the potential impact of counting time spent as an outpatient toward the 3-night requirement for skilled nursing facility (SNF) services so that beneficiaries receiving similar hospital care have similar access to these services.  In relation to this issue, CMS has also issued a new fact sheet on the SNF 3-Day Rule Billing process and how it is currently intended to work.
AHCA/NCAL supports efforts and legislation that ensures that time spent under “observation status” in a hospital counts toward satisfying the three-day inpatient hospital requirement for coverage of skilled nursing care services under Medicare.  The observation stays issue is an outdated policy that continues to leave countless Medicare beneficiaries surprised by thousands of dollars in medical bills and hanging with uncertainty regarding their access to the Medicare coverage they deserve.  For more information about the observation stays issue, please visit the AHCA/NCAL website.