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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.

Vermont ACO Tests 1-Night Hospital-Stay Waiver
Dana Halvorson

According to an August 22, 2018, article from McKnight’s, “OneCare Vermont — a statewide ACO coordinating care for more than 112,000 beneficiaries — just launched a new pilot program with three local skilled nursing facilities. The three SNFs will now be able to accept Vermont Medicare patients after just one day in the hospital, according to the Sentinel. Typically, under Medicare rules, patients need to be at a hospital for at least three consecutive days before Medicare covers their treatment at a SNF. The OneCare Vermont ACO is granting two local hospitals and its SNF partners a waiver to drop the requirement to one day under a new pilot program. The change will affect some 5,000 patients.” The full McKnight’s article can be found here.

AHCA/NCAL supports eliminating the three-day stay requirement and solving the related issue of observation stays. AHCA/NCAL also continues to advocate for the Improving Access to Medicare Coverage Act of 2017 (S. 568/H.R. 1421) that was introduced on March 8, 2017, by Congressmen Joe Courtney (D-CT) and Glenn “GT” Thompson (R-PA), and Senators Sherrod Brown (D-OH), Susan Collins (R-ME), Bill Nelson (D-FL) and Shelley Moore Capito (R-WV). This legislation 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. 

For more information about observation stays and the three-day stay requirement, please visit the AHCA/NCAL website.


NPR Article on the Observation Stays Issue
Dana Halvorson


On April 20, 2018, NPR published an article written by Alison Kodjak entitled, “How Medicare's Conflicting Hospitalization Rules Cost Me Thousands Of Dollars”,on the observation stays matter.  The article focuses in on the author’s mother that was impacted by the issue, and how the use of observation status has increased significantly over the past decade.  

AHCA/NCAL continues to focus on the observation stays issue.  Increasingly, patients have no idea what their status is in a hospital, or the importance of it, which can lead to thousands of dollars in out-of-pocket medical expenses should they need skilled nursing center care following their hospital stay.  In addition to placing a financial burden on seniors and their families, this anomaly in Medicare rules can cause unnecessary spend-down, accelerating the time frame in which seniors will have to turn to programs such as Medicaid to pay for their care.  For more information about the observation stays issue, please visit the AHCA/NCAL website.



AHCA/NCAL Supports Legislation to Waive Three-Day Stay Requirement

Congressman Jim Renacci (R-OH) recently (December 20, 2017) re-introduced the Creating Access to Rehabilitation for Every Senior (CARES) Act of 2017 (H.R. 4701), which eases seniors’ access to care by permitting centers that meet specific quality measures and ratings to waive the three-day inpatient stay currently required by the Medicare program.  

The CARES Act of 2017 eliminates the three-day inpatient stay required for Medicare coverage of Part A skilled nursing care benefits by allowing centers that meet particular criteria to automatically qualify to waive the prior hospitalization requirement. The criteria are based on the Centers for Medicare and Medicaid Services (CMS) Nursing Home Compare program.

AHCA/NCAL supports eliminating the three-day stay requirement and solving the related issue of observation stays. AHCA/NCAL also continues to advocate for the Improving Access to Medicare Coverage Act of 2017 (S. 568/H.R. 1421) that was introduced on March 8, 2017, by Congressmen Joe Courtney (D-CT) and Glenn “GT” Thompson (R-PA), and Senators Sherrod Brown (D-OH), Susan Collins (R-ME), Bill Nelson (D-FL) and Shelley Moore Capito (R-WV).

This legislation 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.

For more information about observation stays and the three-day stay requirement, please visit the AHCA/NCAL website.


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