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Support H.R. 4468, the Nursing Home Workforce Quality Act

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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.

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 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.

Congressional Letter to Heads of CMS and HHS on 3-Day Stay Requirement and Observation Stays Issue
Dana Halvorson

Last week, U.S. House of Representative Members, Joe Courtney (D-CT) and Glenn ‘GT’ Thompson (R-PA), wrote to the Secretary of Health and Human Services (HHS), the Honorable Alex Azar, and to the Administrator of the Centers for Medicare and Medicaid Services (CMS), the Honorable Seema Verma, on the three-day stay requirement and observation stays issue.  In the letter, Reps. Courtney and Thompson specifically noted to the agency heads, “This year, we ask if you intend to use your authority to once and for all remove this inequitable, longstanding, and bureaucratic barrier to care.”

Under current law, a Medicare beneficiary must spend at least three days as a hospital inpatient for Medicare to cover a subsequent stay in a skilled nursing center (known as the “Skilled Nursing Facility 3-day rule”).  Each year numerous beneficiaries are unable to access their skilled nursing benefit because of the administrative classification of their hospital stay, even if the stay is deemed medically necessary, and even if the stay spans three days or more.  AHCA/NCAL has also urged CMS to take action and eliminate this confusing policy barrier by recognizing observation stays as qualifying stays for the purposes of the three-day stay requirement.  For more information about this issue, be sure to visit the AHCA/NCAL website.

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.