If your loved one needs senior rehab in a skilled nursing facility (SNF), it is crucial to know what Original Medicare covers and what costs must be paid for out of pocket.
Does Medicare Cover Long-Term Care?
Medicare is the federal health insurance program for people age 65 and over, some younger individuals with disabilities, and some individuals with end-stage renal disease. Like other health insurance plans, Medicare does not cover long-term care services.
Medicare only covers short-term stays in Medicare-certified skilled nursing facilities for senior rehab. These temporary stays are typically required for beneficiaries who have been hospitalized and are discharged to a rehab facility as part of their recovery from a serious illness, injury or operation. A few of the most common medical issues that require senior rehabilitation include pneumonia, stroke and injuries caused by serious falls.
A serious health setback that initially requires short-term care in a SNF often leads to the realization that long-term placement is in fact necessary. Since Medicare coverage is only offered for a limited time, families are often confused and frustrated when they receive notice that their loved ones must either pay for ongoing care privately, apply for Medicaid or be discharged.
Medicare Rehab Coverage Guidelines
Medicare Part A (hospital insurance) pays for skilled nursing care provided in SNFs under certain circumstances. The following sections thoroughly explain Medicare rules and requirements for coverage of senior rehab care in a skilled nursing facility.
How Medicare Measures Skilled Nursing Care Coverage
Medicare measures the use and coverage of skilled nursing care in “benefit periods.” This is a complicated concept that often trips up seniors and family caregivers. Each benefit period begins on the day that a Medicare beneficiary is admitted to the hospital on an inpatient basis. Time spent at the hospital on an outpatient or observation basis does not trigger the beginning of a benefit period. (You can find more detailed information about how Medicare distinguishes inpatient status from outpatient status and related costs at Medicare.gov.)
Once a benefit period begins, a beneficiary must then have a qualifying three-day inpatient hospital stay in order be eligible for any coverage of rehab care in a skilled nursing facility. A benefit period ends when the beneficiary has not received inpatient hospital or SNF care for 60 consecutive days. Once a benefit period ends, a new one can begin the next time the beneficiary is admitted to the hospital. There is no limit to the number of benefit periods a beneficiary can have.
Patient Criteria for Medicare Rehab Coverage
In addition to the benefit period rules above, a beneficiary must meet all the following requirements:
- The beneficiary has Medicare Part A (hospital insurance) and days left in their benefit period available to use.
- The beneficiary has a qualifying hospital stay. This means an inpatient hospital stay of three consecutive days or more, starting with the day the hospital admits them as an inpatient, but not including any outpatient or observation days or the day they leave the hospital.
- Following a qualifying hospital stay, a beneficiary must enter the skilled nursing facility within a short period of time (generally 30 days) of being discharged.
- The beneficiary’s doctor must order skilled nursing care, which requires the skills and oversight of professional personnel (e.g., registered nurses, licensed practical nurses, physical therapists, occupational therapists, speech-language pathologists or audiologists).
- The beneficiary requires skilled care on a daily basis and the specific services needed must be ones that can only be provided in a SNF on an inpatient basis. (If care in a SNF is needed for skilled rehabilitation services only, it is still considered daily care even if the therapy services are only offered 5 or 6 days a week.)
- The beneficiary must need skilled services for the medical condition that was treated during their qualifying three-day hospital stay or a related condition. (E.g., if you are admitted as an inpatient because you had a stroke and then break your hip while in the hospital, Medicare may cover senior rehab services for your hip even if they are no longer needed for stroke recovery.)
- The skilled services a doctor has prescribed must be reasonable and necessary for the diagnosis or treatment of the beneficiary’s eligible condition.
How Long Does Medicare Pay for Rehab in a SNF?
If a beneficiary meets all the requirements above, the amount Medicare covers depends on how long they need to stay in the SNF because coverage decreases over time. Keep in mind that those with Medigap policies or Medicare Advantage Plans may have additional coverage for senior rehab stays.
Costs Under the Medicare 100 Day Rule
- Days 1–20: Medicare pays the full cost for each benefit period.
- Days 21–100: Medicare pays all but a daily coinsurance. In 2020, the coinsurance is $176 per day.
- Days 101 and beyond: Medicare provides no rehab coverage after 100 days. Beneficiaries must pay for any additional days completely out of pocket, apply for Medicaid coverage, explore other payment options or risk discharge from the facility.
Breaks in Skilled Care
Sometimes beneficiaries take “breaks” from senior rehab that can change their eligibility for coverage. For example, if a beneficiary leaves the SNF for less than 30 days and then needs to return for the same medical condition (or a related one), they will not need another qualifying three-day hospital stay to be eligible for additional SNF coverage left in their benefit period.
If the break lasts for 60 consecutive days, then this triggers the end of a benefit period and the beneficiary’s SNF benefits are renewed only after they meet the above requirements again.
Debunking Medicare’s “Improvement Standard”
For many years, senior rehab facilities told their patients that Medicare would cease paying for skilled nursing care if their health stopped improving or had “plateaued” within their covered benefit period. However, Jimmo v. Sebelius, a 2013 federal court settlement, prompted the Centers for Medicare and Medicaid Services (CMS) to make an admission about this policy:
“Medicare has never supported the imposition of this ‘Improvement Standard’ rule-of-thumb in determining whether skilled care is required to prevent or slow deterioration in a patient’s condition. Thus, such coverage depends not on the beneficiary’s restoration potential, but on whether skilled care is required, along with the underlying reasonableness and necessity of the services themselves.”
The current Medicare Benefit Policy Manual has reflected these clarifications since 2014, but some senior rehab facilities haven’t adapted to help chronic patients get access to the coverage they are eligible for. Furthermore, many business offices rely on software programs to manage their billing, and it is possible that some of those programs haven’t caught up.
Ensuring Medicare Will Pay for Senior Rehab
There is so much room for interpretation (and reinterpretation) surrounding the rules for Medicare coverage that it is easy for families to become confused on how to pay for care in SNFs. The bottom line is that vigilance and advocacy are necessary to ensure that aging loved ones receive the skilled care they need and the coverage they are entitled to.
Family caregivers must make sure that the hospital staff and SNF staff give detailed orders and reasons for the skilled services that are needed to promote their loved ones’ health and safety. Carefully tracking the days within a benefit period can be confusing, but this is essential to prevent surprises regarding non-coverage.
Hiring a geriatric care manager (GCM) to track the nursing home chart and timeline and accompany you to care plan meetings may be a wise investment. GCMs (also known as Aging Life Care Professionals) have a great deal of experience with seniors, various types of elder care providers and Medicare. Even if your loved one has run out of Medicare coverage during their benefit period, a GCM can help you find and access other sources of financial assistance and alternative types of care.
Other Ways to Pay for Skilled Nursing Care
There are other sources of help available for covering skilled care and related costs. If a senior’s income and resources are limited, they may be eligible for their state’s Medicaid program. Medicaid provides assistance with paying for skilled and/or custodial care, medications, and other medical expenses. If they qualify for both Medicare and Medicaid, then they are considered a “dually eligible beneficiary” and most of their health care costs are typically covered.
A Note About Medicare Rehab Coverage During the COVID-19 Pandemic
Medicare has made some changes to their coverage requirements for senior rehabilitation services during the coronavirus pandemic. Medicare beneficiaries may be able to qualify for senior rehab in a skilled nursing facility without starting a new benefit period. Others who are unable to remain in their own homes or are otherwise affected by the pandemic may be able to get care in a SNF without first having a qualifying hospital stay.
Additional information about Medicare coverage during the coronavirus pandemic is available here.
Sources: Skilled Nursing Facility (SNF) Care Coverage (https://www.medicare.gov/coverage/skilled-nursing-facility-snf-care); Skilled Nursing Facility (SNF) Situations (https://www.medicare.gov/what-medicare-covers/skilled-nursing-facility-snf-situations); Jimmo v. Sebelius Settlement Agreement Fact Sheet (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Jimmo-FactSheet.pdf); Jimmo v. Sebelius Settlement Agreement Program Manual Clarifications Fact Sheet (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/jimmo_fact_sheet2_022014_final.pdf)