Medicare’s Nursing Home Coverage

Medicare Part A covers institutional care in hospitals and
skilled nursing facilities, as well as certain care given by home health
agencies and care provided in hospices.

Any person who has reached age 65 and who is entitled
to Social Security benefits is eligible for Medicare Part A without charge.
That is, there are no premiums for this part of the Medicare program.

Medicare Part A covers up to 100 days of "skilled
nursing" care per spell of illness. However, the conditions for obtaining
Medicare coverage of a nursing home stay are quite stringent. Here are the main
requirements:

  • The
    Medicare recipient must enter the nursing home no more than 30 days after
    a hospital stay (meaning admission as an inpatient; "observation
    status" does not count) that itself lasted for at least three days
    (not counting the day of discharge).
  • The
    care provided in the nursing home must be for the same condition that
    caused the hospitalization (or a condition medically related to it).
  • The
    patient must receive a "skilled" level of care in the nursing facility
    that cannot be provided at home or on an outpatient basis. In order to be
    considered "skilled," nursing care must be ordered by a
    physician and delivered by, or under the supervision of, a professional
    such as a physical therapist, registered nurse or licensed practical
    nurse. Moreover, such care must be delivered on a daily basis. (Few
    nursing home residents receive this level of care.)

As soon as the nursing facility determines that a patient is
no longer receiving a skilled level of care, the Medicare coverage ends. And,
beginning on day 21 of the nursing home stay, there is a significant copayment
equal to one-eighth of the initial hospital deductible ($148 a day in 2013).
This copayment will usually be covered by a Medigap insurance policy, provided
the patient has one.

A new spell of illness can begin if the patient has not
received skilled care, either in a skilled nursing facility (SNF) or in a
hospital, for a period of 60 consecutive days. The patient can remain in the
SNF and still qualify as long as he or she does not receive a skilled level of
care during that 60 days.

Nursing homes often terminate Medicare coverage for SNF care
before they should. Two misunderstandings most often result in inappropriate
denial of Medicare coverage to SNF patients. First, many nursing homes assume
in error that if a patient has stopped making progress towards recovery then
Medicare coverage should end. In fact, if the patient needs continued skilled
care simply to maintain his or her status (or to slow deterioration) then the
care should be provided and is covered by Medicare.

Second, nursing homes may wrongly believe that care requiring
only supervision (rather than direct administration) by a skilled nurse is
excluded from Medicare's SNF benefit. In fact, patients often receive an array
of treatments that don't need to be carried out by a skilled nurse but that
may, in combination, require skilled supervision. In these instances, if the
potential for adverse interactions among multiple treatments requires that a
skilled nurse monitor the patient's care and status, then Medicare will
continue to provide coverage.

When a patient leaves a hospital and moves to a nursing home
that provides Medicare coverage, the nursing home must give the patient written
notice of whether the nursing home believes that the patient requires a skilled
level of care and thus merits Medicare coverage. Even in cases where the SNF
initially treats the patient as a Medicare recipient, after two or more weeks,
often, the SNF will determine that the patient no longer needs a skilled level
of care and will issue a "Notice of Non-Coverage" terminating the
Medicare coverage.

Whether the non-coverage determination is made on entering
the SNF or after a period of treatment, the notice asks whether the patient
would like the nursing home bill to be submitted to Medicare despite the
nursing home's assessment of his or her care needs. The patient (or his or her
representative) should always ask for the bill to be submitted. This requires
the nursing home to submit the patient's medical records for review to the
fiscal intermediary, an insurance company hired by Medicare, which reviews the
facilities determination.

The review costs the patient nothing and may result in more
Medicare coverage. While the review is being conducted, the patient is not
obligated to pay the nursing home. However, if the appeal is denied, the
patient will owe the facility retroactively for the period under review. If the
fiscal intermediary agrees with the nursing home that the patient no longer
requires a skilled level of care, the next level of appeal is to an
Administrative Law Judge. This appeal can take a year and involves hiring a
lawyer. It should be pursued only if, after reviewing the patient's medical
records, the lawyer believes that the patient was receiving a skilled level of
care that should have been covered by Medicare. If you are turned down at this
appeal level, there are subsequent appeals to the Appeals Council in
Washington, and then to federal court.

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