A Medicare rule dating from 1965 requires people to be inpatients in a hospital for at least three days (three midnights) in order for Medicare to pay some of their expenses in a skilled nursing facility afterwards.  It used to take those three days to evaluate them to see what care they needed.  If they weren’t in the hospital that long, the logic seems to have been, they couldn’t have been sick enough to warrant having the federal government cover any part of a follow-on stay in a skilled nursing facility.

But today it takes only about a day for that initial evaluation, and hospital stays overall are much shorter.  For example, in 1970, hospitalized patients aged 65 or older stayed in the hospital for 12.6 days on average.  In 2010, it was 5.5 days, and people are sicker when they are discharged.  The 3-day rule looks increasingly problematic. 

In addition, Medicare patients are often held in “observation” (outpatient) status for 2 or more days in the hospital before being officially admitted – so patients can easily be in the hospital for 5 days but termed “inpatients” for fewer than 3 days, and thus Medicare won’t pay for any of their care in a skilled nursing facility afterwards.

How can you protect yourself?  

 The non-profit Center for Medicare Advocacy offers a self-help packet on its website, medicareadvocacy.org, to help you understand the rules for observation status and how to deal with them. Some of the steps are complex and time consuming, but a few can be handled right away and may save you a great deal of trouble and money.

First, each day that you or family members covered by Medicare are in the hospital, ask the doctor in charge of your care in the hospital whether you are formally an inpatient or not.  It’s important to keep asking throughout your stay, because your status can be changed retroactively without your hearing about it.

Second, if you are in observation status, ask your primary care doctor to talk to the hospital doctor on your behalf to see if your status can be changed.

Third, if your status cannot be changed and you seem to be headed for a stay in a skilled nursing facility that you cannot afford, talk with the hospital doctor (and your primary care doctor) to find out if it is medically justifiable for your discharge instructions to specify either a higher intensity of care (a stint in a rehabilitation hospital) or a lower intensity of care (from medical professionals who come to your home, if you will be homebound).  Given the right set of facts, your care in either case may qualify for Medicare coverage.