Medicare Coverage for Rehab or Nursing Home: Watch Out for the 3-Day Hospital Stay

It is commonly understood that if an individual is transferred from a hospital directly to a nursing home or rehabilitation center, s/he will be entitled to Medicare coverage for a certain period of time.  But be careful:  a new status category employed by hospitals may thwart those benefits.

When an individual has a 3-day hospital stay and then transfers to a skilled nursing facility or rehabilitation center, s/he will be entitled to a maximum of 100 days of Medicare coverage if all eligibility criteria are met and the individual is making progress and/or maintaining their skill level due to the therapy or rehabilitation services provided. The first 20 days will be paid for by Medicare in full and days 21-100 will be subject to a co-pay (currently $157.50/day), which can be covered by medi-gap or other private health insurance plans.  

Unfortunately, many people are currently being denied this Medicare coverage due to action at the hospital level.  Instead of admitting the patient, the hospital keeps the person on “observation.”  While a patient can be kept on “observation” for days at a time, it does not rise to the level of a hospital “admission.”  As such, when that patient is transferred to a nursing home or rehabilitation center, Medicare will not cover any of the costs of their care.  With nursing homes and rehabilitation centers costing on average $450 per day, this is a huge financial burden to the patient and their family.

What you can do 

When your loved one is in the hospital, ask a hospital staff member if s/he has been formally admitted to the hospital and has in-patient status.  If necessary, engage the help of your loved one’s primary care physician to ensure a formal hospital admission.  It is often the case that the patient has no idea of their “status” in the hospital until s/he is transferred to a nursing home or rehabilitation center and by then, it is too late to secure a formal admission and in-patient status. 

By knowing your rights, you can advocate for your loved one to make sure your loved one gets the benefits to which s/he is entitled.