'3-day stay' rule may be on its way out

Before the pandemic, you may have been caught unawares by this 58-year-old Medicare rule: You have to have been admitted as an inpatient in a hospital for at least three days before Medicare will pay for up to 100 days of skilled nursing care afterward.

Those three days do not count the day of discharge or any pre-admission time you may have spent in an emergency room or under outpatient "observation."

Those who are admitted "under observation" are classified as outpatient, which is covered under Medicare Part B. Medicare Part B will not cover any portion of a skilled nursing facility stay. Only Part A does that.

Over the years, I've had a lot of clients admitted for "observation," and they find out - too late - that their hospital stay, though it involved all the tests and treatments of an inpatient - didn't qualify them for skilled nursing care upon discharge.

When that happens, the patient is on the hook for the entire nursing home bill, until their long-term care insurance (if they have it) kicks in, usually 90 days.

The Centers for Medicare and Medicaid Services (CMS) waived the rule under the Public Health Emergency brought about by the COVID-19 pandemic, so it hasn't been applied since 2020.

But now the Public Health Emergency is expiring in a matter of weeks, and many health care advocates and the long-term care industry are lobbying for it to be permanently waived, calling it wasteful and superfluous.

I'm one of those who would like to see the "three-day stay" rule permanently discarded. For me, it's not about nursing homes losing out on business. As a patient care advocate, I encourage as many of my clients as possible to choose home-based care over skilled nursing facilities, which have struggled with providing quality care because of staffing shortages.

Medical care has seen a lot of changes since 1965 when the rule first went into effect. Conditions that required extensive hospitalization 58 years ago may be treated quite differently today, and we don't do patients any favors by keeping them in the hospital longer than necessary, due to the risks of hospital-acquired infections and other possible negative factors.

It's also confusing, particularly for older patients or those with cognitive limitations, who may forget to ask about whether they are being admitted as inpatients or for observation, or don't understand the difference, until it's too late.

Then there's the matter of a patient getting the proper care. In 2022, a federal court upheld a lower court decision that patients should be able to appeal their "observation status" because lack of post-acute care has led to "emotional and psychological costs, beyond the financial costs, for a patient who is denied Medicare Part A coverage." The court agreed with a lower federal court that found patients erroneously denied coverage after hospitalizations might be forced to choose lower-quality medical care "or even forgo it altogether."

The Center for Medicare Advocacy, a national nonprofit that works to advance access to comprehensive Medicare coverage, notes that private Medicare Advantage plans are permitted to waive the three-day hospital requirement, and statistics, such as hospital readmissions, don't support it.

Unless the secretary of Health and Human Services extends the Public Health Emergency, the three-day stay rule will go back into effect on May 11. Congress is being urged to change the law so that all time spent in the hospital counts toward the three-day stay, but previous legislative efforts have not been successful.

I don't know what the outcome will be, but if you are admitted to a hospital under Medicare after May 11, be sure to ask whether your status is "inpatient" or "for observation." It might matter, or it might not - but it's better to know upfront than when it's too late.

• Teri Dreher is a board-certified patient advocate. A critical care nurse for 30+ years, she is founder of NShore Patient Advocates (www.NorthShoreRN.com). Her new book, "How to Be a Healthcare Advocate for Yourself & Your Loved Ones," is now available on Amazon. She is offering a free phone consultation to Daily Herald readers; call her at (847) 612-6684.