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Medicare Payments for Nursing Home Care

Protecting Benefits and Coverage

twin hurdlesTwin Hurdles to Medicare covered Nursing Home Days
Medicare will pay for skilled nursing home care IF the elder has a "qualified" hospital stay of at least 3 days (not counting day of discharge) before being admitted to the skilled nursing facility. Admission to the nursing home must be within 30 days of the hospital discharge.
If you are a hospital patient: If you are a nursing home resident:
Patients put on Hospital Observation Statusmust pay out-of-pocket if they need nursing home care: Medicare coverage doesn't depend on beneficiary’s restoration potential; it's whether skilled care is required:

Fact Sheet: Are You a Hospital Inpatient or Outpatient? If You Have Medicare – Ask!

Self Help packet for hospital patients from Center for Medicare Advocacy .

Medicare Appeals

Medicare has issued revisions to its manual to explain this basic more clearly. PDF Transmittal 179.Read more: PDF Manual Updates to Clarify Skilled Nursing Facility (SNF), Inpatient Rehabilitation Facility (IRF), Home Health (HH), and Outpatient (OPT) Coverage Pursuant to Jimmo vs. Sebelius - Steps to take if you need to appeal a Medicare Coverage Denial.

agingcare.coHospital Observation Status can be financially devastating. Read More by Attorney John L. Roberts at:




Improvement Standard can't be used to cut off Medicare Nursing Home Days

PDF Summary. Medicare pays for skilled nursing services, but nursing homes may be reluctant to continue Medicare Coverage. Medicare laws and regulations have never supported the imposition of a rule of thumb “Improvement Standard" to determine whether skilled nursing home care is required.

Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities. The nursing home patient who needs these skilled services should still be covered by Medicare. For example, a terminal cancer patient may need skilled services. The concept of skilled therapy services can involve not only services that are restorative in nature (or “rehabilitative” therapy in the OPT setting) but, if certain standards are met, maintenance therapy as well.

You may be confronted by hospital or nursing home staff, who tell you that Medicare will not continue to pay for care. But there are many Medicare Regulations that protect your rights to continued coverage if you need skilled care. Medicare regulations say "the determination of whether skilled nursing care is reasonable and necessary must be based solely upon the beneficiary's unique condition and individual needs, without regard to whether the injury is acute, chronic, terminal, or expected to last a long time." Call us if you need to protect these important rights to health care services that Medicare does cover.

"Observation" Status

PDF Summary. Another potential problem for hospital patients who are discharged to a nursing home is Observation status in the hospital. Medicare is now directing hospitals to keep patients "under observation," to prevent eligibility for the 100 days of Skilled Nursing Facility benefits that would otherwise be available to those who enter a nursing home after a hospital stay of 3 or more days.

Second Circuit Court of Appeals rules on Barrows v. Burwell Outpatient Status case
The Appeals Court has ordered more discovery, to find out how hospitals are deciding to place patients on observation status. The Appeals Court decided that the hospital patients have made a viable claim (a question of fact rather than law) that the outpatient classification decision is not discretionary, but rather made through “rote application of commercially available screening tools” with increased pressure from the Centers for Medicare and Medicaid Services. If the decisions are not medical judgments being made by individual physicians, the patients may have a property interest in their Medicare benefits paying for their continuing care in nursing homes. This distinction is important, the court noted, because people have a right to due process when the distribution of Medicare benefits is required by "a defined administrative outcome.”
Connecticut Court opinion that had dismissed the case.

A Medicare fact sheet warns patients to ask about their status when they are in the hospital: "You’re an inpatient starting the day you’re formally admitted to the hospital with a doctor’s order. The day before you’re discharged is your last inpatient day."

CMA explains observation status as "the classification of hospital patients as "outpatients," even though, like inpatients, observation patients may stay for many days and nights in a hospital bed, receive medical and nursing care, diagnostic tests, treatments, supplies, medications, and food. The classification of a hospitalized patient as an outpatient can cause many problems for the patient. Medicare will not pay for a subsequent stay in a skilled nursing facility (nursing home). In other words, with bills often totaling many thousands of dollars."

If a patient has spent 3 days in the hospital, Medicare may pays for care in a Skilled Nursing Facility:
imageDays 1 – 20: $0 coinsurance for each benefit periodmedicare
Days 21 - 100: patient pays $157.50 coinsurance per day during 2015
image Days 101 and beyond: patient pays all costs

Do you know your rights to nursing home coverage under Medicare? Medicare Part A pays for inpatient hospital care, and then for care in a skilled nursing facility if the patient has been discharged to the facility from a hospital.


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