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Dumb Policy: 3-Night Hospital Requirement for Medicare SNF

by: Alex Smith @AlexSmithMD

The patient was elderly and was hospitalized for a COPD exacerbation.  Fortunately, her breathing problems were easily treated, and came under rapid control after one night of hospitalization.  She was ready to return to the nursing home the next day. I informed our discharge planner that she was ready to be discharged, and was shocked to hear her respond that, "Her primary care physician said she needs to stay for 3 nights in order to quality for the Medicare skilled nursing facility benefit before the nursing home will take her back." 

This seemed nuts - dumb even - she "needs" to stay in the hospital, exposing her to all the risks of hospitalization, to qualify for the Medicare Skilled Nursing Faciliity (SNF) benefit?  Her skilled needs would be the increased frequency of nebulizer treatments - fair enough.  At that point, she had not experienced any loss of function that would warrant skilled rehabilitation care above the usual custodial care.  However, an additional 2 days in the hospital certainly put her at dramatically increased risk for the hospital disability syndrome.  And when she returns to the nursing home on the Medicare SNF benefit, the nursing home will be paid a considerably higher rate than the traditional rate Medicaid pays for long term care. What was best for the patient was at dramatic odds with what was best for the (financial) bottom line of the nursing home.

Why does the US have this dumb 3-night hospital stay requirement for postacute nursing care?  In a very thoughful and carefully written article (free online in JAMA), Dr. Lew Lipsitz of Hebrew Senior Life explains in clear langauge the history and complex issues surrounding this seemingly innane policy.  He starts with two case scenarios that, like my patient, also make you scratch your head:
  • An 80 year old man who fell at home and needs rehabilitation must be hospitalized for 3 days before receiving rehab
  • A 90 year old nursing home resident with pneumonia that requires IV fluids must be hospitalized for treatment (cost of hospitalization $12,000)
It turns out the 3-night requirement is not as cut-and-dried senseless as it may seem.  Eliminating the 3-night stay in demonstration projects failed to demonstrate dramatic cost savings. 

In the end, however, Lew Lipsitz concludes this policy has to be eliminated, either by:
  • Establishing strict criteria for SNF stay without hospitalization, such as mobility decline or delirium
  • Move to a shared saving model of care like the new accountable care organizations, where the system as a whole bears greater responsibility for the costs.
I'm a big fan of both policy changes, particularly the shared savings and accountability models.  In our current system we have one nursing home, one physician, and one hospital each making money off of one patient, with little connection between. 

Dumb policy.

Comments

Anonymous said…
I think this is a nonsense policy too but I fear that having no policy could invite abuse by greedy nursing home administrators. Why treat an ICF resident in-house when you can send to the hospital, treat as an inpatient, and then the resident can come back for 100 skilled days and you get that Medicare skilled payment. That is my worry.
Anonymous said…
Some Medicare Advantage plans 'waive' the 3 night requirement - so long as the indiviudal meets the eligibility for needing SNF rehab.
Carol Levine said…
Even three midnights (or more) in a hospital if you are in observation status do not count toward Medicare coverage for SNF services. This is an added expense for patients (Part B applies with each service billed separately) as well as the high costs of SNF services if you have to pay privately. I worry that people who need rehab won't get it because of these arbitrary rules. See my commentary at http://www.uhfnyc.org/news/880927
HDuguay said…
The 3 night hospital requirement for Medicare is absolutely ridiculous. Many patients are sent in to the emergency department (ED) with high fevers and after a quick urinalysis are diagnosed with a urinary tract infection (UTI), something that can be treated quickly and effectively in the skilled nursing facility. But because of this 3 day rule, have to spend the following 3 days, not only more susceptible to infection but also more likely to become confused, even when dementia wasn’t a diagnosis previously.
Bureaucrats look at the bottom line, and if this is a cost saving maneuver, I applaud their money saving savvy. But patients are not clients or check boxes to be crossed off they are people that deserve the best that our medical expertise can give them some times that is not hospitalization.
I agree with you – dumb policy.
James Mittelberger MD said…
Why have any hospitalization requirement at all? Skilled services should be provided when needed. This is the standard with the Evercare program, and patients are most often skilled in place without any hospital or ED stay.

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