Society Joins Others Urging Regulatory Fixes to 3-Day Stay Rule

June 23, 2017

The Society joined with 25 organizations in sending a letter to the Centers for Medicare & Medicaid Services (CMS) request for information within the Skilled Nursing Facility Prospective Payment System Proposed Rule.

In Section VIII of the proposed rule, titled Request for Information on CMS Flexibilities and Efficiencies, CMS solicited ideas for regulatory, subregulatory, policy, practice, and procedural changes to eliminate unnecessary burdens for providers and patients. The letter offered CMS a clear pathway to resolve the SNF 3-day rule problem through the issuance of subregulatory guidance, an approach that would not require the promulgation of new regulations.

The letter stated that, “CMS already allows certain hospital stays to count in qualifying a patient for Part A-covered care in a SNF, even when the hospital stay itself is not a Part A-covered hospital stay. We provide two examples:

  1. In the context of hospice services, CMS has recognized that “general inpatient care” in a hospital, although “not equivalent to a hospital level of care under the Medicare hospital benefit,” nevertheless qualifies a hospice beneficiary for Part A-covered SNF services; and
  2. A three-day stay in a foreign hospital may qualify a beneficiary for Part A SNF coverage if the foreign hospital is qualified as an “emergency hospital.”

    The argument for counting days spent as an outpatient under observation for purposes of satisfying the SNF 3-day rule is far stronger than either of the above examples, since CMS acknowledges that care in the hospital is indistinguishable whether the patient is formally admitted as an inpatient or called an outpatient.”

The letter also stated that in a 2008 decision of the Second Circuit Court of Appeals it was confirmed that the Secretary of Health and Human Services (HHS) has authority under the Medicare statute to count the time a patient spends in the hospital, regardless of inpatient or outpatient classification, toward satisfying the SNF 3-day rule for Medicare coverage of the SNF stay.

The organizations urged CMS to “issue subregulatory guidance in the form of an update to the Medicare Benefit Policy Manual, clarifying that any time a patient spends in the hospital, regardless of whether the stay is administratively classified as inpatient, outpatient, or outpatient observation counts toward satisfying the SNF 3-day rule for purposes of ensuring Medicare coverage of a subsequent, medically necessary SNF stay.”

The Society supports the Improving Access to Medicare Coverage Act which would count outpatient observation services in a hospital toward satisfying the 3-day inpatient hospital requirement for coverage of skilled nursing facility services under Medicare. Click here to send a letter asking your elected officials to support the bill.