Possible Changes to Medicare's Three-Day Rule

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In early August, a class-action lawsuit got underway that could impact the three-day Medicare rule. This follows a bi-partisan bill filed in March that would change the rules for nursing home admissions. In order to understand the changes, you have to understand the current Medicare rules.

There are only two ways to be admitted to a nursing home: one is as a short-term rehab resident and the other is as a long-term care resident.

To be admitted to a nursing as a short-term rehab resident, a person must have a 3-day admission (not observation) in a hospital whereupon the doctor feels a sub-acute rehabilitation stay is needed in order to maintain or improve functioning. This rehab care must be related to the hospital diagnosis; and after all the requirements are met, Medicare Part A will pay for most of the rehab stay.

In order to be a candidate for short-term rehab in a nursing facility, you must have a three-day stay in a hospital.

The second way that individuals are admitted to a nursing home is from home or a long-term care community (like an assisted living community or personal care home). This method requires no hospital stay, but it is also not reimbursable by Medicare.

Of course, you can be admitted to a nursing home without a hospital stay—but Medicare will not pay for any of the costs.

Finding a nursing home that will accept an individual for long-term care (and not for sub-acute or short-term rehab) can be difficult. The reimbursement rates for long-term residents are much lower than for short-term rehab residents, and nursing homes try to limit their number of long-term care beds. Medicare does not pay for long-term care in a nursing home, and residents must use other funds (including Medicaid) to pay for their care.

Oftentimes, only patients needing short-term rehab can get access to a nursing home bed.

Over the last decade, advocates have been monitoring the impact that “observation” status has on nursing home admissions. Hospital patients can be in the hospital on an “inpatient” status or on an “observation” status. The services often seem identical. Patients and families often do not know if the status is inpatient or observation.

As things are now, observation status does not count towards the three-day hospitalization requirement for short-term rehab.

Many Medicare patients have been shocked to learn that their hospital stays were not counted as “inpatient” but as “observation.”  This big distinction means that any subsequent rehab stays in the nursing home are not paid for by Medicare. Nursing home bills totaling around ten thousand dollars have shocked many families.

There is a major push for “observation” status to be counted towards the three-day hospitalization requirement.

The lawsuit that recently got underway and the bill filed earlier this year both attempt to make “observation” status count towards the three-day rule.  This shows a hopeful sign that the Center for Medicare and Medicaid Services will be making changes to the rules for nursing home admissions.

Families can protect themselves by having an advocate.

Nursing home admissions continue to be confusing and overwhelming. Misunderstanding and mistakes can cost families thousands of dollars. Families can best protect themselves by having a knowledgeable, experienced ally as part of their support team. Hurley Elder Care Law provides each of its clients with a whole team of experts to navigate the challenges associated with our aging world. Our Certified Elder Law Attorneys, care coordinators, and public benefits specialists address legal, financial, and care concerns.

To learn more about our services, please contact Hurley Elder Care Law for a complimentary phone consultation by calling (404) 843-0121 or by sending us a message.

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