Medicare Patients Beware!

Question:  My mom was in the hospital for three days and then transferred to a skilled nursing facility for recovery.  Why is Medicare refusing to pay for her stay in the nursing facility?

Answer: For Medicare to cover the cost of a post-hospital skilled-nursing home, a beneficiary must first be a hospital inpatient for at least three consecutive days.   The first day of a physician-ordered hospitalization is counted as day 1 and the day before discharge is counted as the last day. If a patient is admitted on Monday
and discharged on Wednesday, Medicare counts the number of days as only two and would not cover a subsequent stay in a skilled nursing facility.

Another problem concerns Medicare beneficiaries status at admission and while in the hospital. Many physicians admit patients on an observation status. Patients may be in hospital beds and receiving medications, meals and tests, but they are considered outpatients if they are listed on physician-ordered-observation status.  Patients and their families may be unaware that they are not an inpatient.  Medicare Part B, rather than Part A, pays for their hospital stay. Then when they are  transferred to a skilled nursing facility for recovery, that cost is not covered by Medicare.

Medicare guidelines use observational services to determine whether patients should be  considered and treated as inpatient and may include shortterm treatment, testing and assessment. While the suggested time for observation status is 24 to 48  hours, many stays extend up to 14 days.

Beneficiaries or their families can avoid these costly surprises by asking the hospital staff or physicians the patients status.  This is especially important if follow-up care in a skilled-nursing home is anticipated.

Once beneficiaries or their families establish that their status is as an inpatient, then any effort to move the beneficiary out of the hospital before the three-day period should be questioned and challenged, if necessary.  Beneficiaries or their families may request a formal notice-of-status from the hospital utilization team. If notices specify that the beneficiaries have been admitted on an observation status, then an appeal can be filed to challenge that decision. If the hospital fails to provide notices, then the beneficiaries can appeal when they receive their Medicare Summary Notices.

To find out more on this subject or request publications, contact the Center for Medicare Advocacy at For appeal assistance, contact your local Health Insurance Counseling and Advocacy Program (HICAP). In California, HICAP can be reached at or at 800-434-0222.