Medicare Snafu Continues to Cost Seniors

To compound the pain and suffering seniors endure during a hospitalization, financial heartache can make things worse, especially for those who may need skilled nursing care or rehabilitation after being discharged from the hospital. In order for Medicare A to potentially pay for up to 100 days of post-acute care in a skilled nursing facility, a patient must meet two Medicare criteria for coverage. First, they must have an inpatient hospital stay of three or more consecutive days, not counting the day of discharge. Secondly, they must have a condition that upon discharge requires skilled services such as physical therapy, IV antibiotics, or wound care. However, some Medicare beneficiaries are finding out that Medicare will not cover their post-acute skilled nursing stays because they technically did not have the necessary three-day stay in the hospital despite being there three days or even longer!

How’s this possible? This is where the snafu or technicality plays a role. Once in the hospital their status may remain as an “observation” patient rather than an actual inpatient admission. The observation period is meant to be used for testing and performing diagnostics to determine their illness or injury and whether full hospitalization is necessary. However, observation periods are stretching well beyond 24 hours and can go for several days and they do not count towards the required three-day stay. Some of these patients are then transferred to nursing facilities for further care or rehabilitation without any insurance coverage due to not meeting the first criteria for coverage. Plus, in some cases with communication breakdown, the individual may not find out they have to pay out-of-pocket until they receive the bill from the nursing facility a few weeks later. This all leads back to what they thought was a qualifying stay in the hospital. At a range of nearly $200 to $300 a day for skilled nursing care, that non-qualifying technicality becomes a very costly surprise.

This issue affects many seniors as well as younger disabled Medicare beneficiaries who need skilled nursing care. They run the risk of substantial out-of-pocket costs for post-acute care. Worse yet they may settle on going back home despite the physician’s recommendation or could be admitted to a lesser level of care that could jeopardize their health or safety, simply because they don’t want to pay out-of-pocket for a nursing facility.

Back in 2012, the Improving Access to Medicare Coverage (Act S. 818 in the U.S. Senate) and (H.R. 1543 in the U.S. House of Representatives) was introduced to help resolve this issue. The bill would not change the three-day stay requirement, but rather it would stipulate that Medicare beneficiaries hospitalized for “observation” for more than 24 hours would be deemed an inpatient, thus making that 24-hour period count as an admission day toward the necessary three-day stay.

Unfortunately, the bill never passed, and this problem has not yet been resolved. In 2015, there is bipartisan support in Congress to alleviate this issue. Senator Sherrod Brown (D-OH), Senator Susan Collins (R-ME), Senator Bill Nelson (D-FL), Senator Shelley Moore Capito (R-WV) and Representative Joseph Courtney (D-CT) have initiated an updated version of the Improving Access to Medicare Coverage Act of 2015 (S. 843/H.R. 1571). Again, like in 2012, this bill would require that time spent in observation would be counted towards meeting the necessary three-day prior inpatient stay.

This is an expensive and potentially harmful snafu that seniors and those with disabilities should not be saddled with. To learn more about this topic and the legislation trying to change it, go to If you have questions about Medicare A coverage and eligibility for skilled nursing coverage, please contact the Messiah Lifeways Coaching Office at 717.591.7225 or email

Originally posted September 4, 2012
Revised June 8, 2015
by Matthew J. Gallardo
Matthew J. Gallardo

Matthew J. Gallardo

Matt is the Director of Community Engagement and Coaching at Messiah Lifeways. He brings nearly 20 years of experience in counseling, advocating, and guiding older adults and caregivers through many of life’s tough decisions. His diverse background of working in hospital and rehabilitation settings, community services, and senior housing gives him the breadth and depth of knowledge to provide unique solutions, opportunities, and help individuals proactively plan for the future. He serves as the Lifeways Coach and as a writer, blogger, podcaster, and speaker for Messiah Lifeways, located in Mechanicsburg, PA.

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