Three Midnight Rule For Medicare SNF Explained: Will CMS Pay?

As a practicing hospitalist, I don't claim to know all the  specific details necessary to qualify for a skilled nursing facility (SNF), but I do know the big picture that is important for patients to understand.  Pronounced sniff, the SNF is a highly regulated status, often within nursing homes, in which Medicare will pay these facilities to provide defined therapies such as physical therapy, occupational therapy, speech therapy, wound care, intravenous medications and other interventions among the skilled nursing that defines the name.   The purpose of this benefit is to provide an arena  for Medicare beneficiaries to safely transition back to independent or assisted community living after a hospital stay.   This is an optional benefit.  No hospital anywhere in America can force you or your loved one to go to a nursing home or skilled nursing facility  if you or they don't want to, with some exceptions. 

How much of the SNF cost  is covered by Medicare per benefit period?
  • Days 1–20 :  Full Cost.
  • Days 21–100:  All but a daily co payment.
  • Days beyond 100:  Medicare covers nothing.
Not all hospitalized patients will qualify for this SNF benefit on discharge.  What are the big picture rules used to determine whether a patient can get their skilled nursing facility (nursing homes on low dose steroids) benefits paid for by Medicare?  Just remember three key words:  three inpatient midnights.

When a patient is admitted to the hospital, the hospitalist or any other physician has two basic options when they write an order to bring the patient into the hospital.  They can write an order for inpatient status or they can write an order for observation status.    Inpatient is what most folks believe they are when they get admitted to the hospital. They are being admitted into the hospital.    However, not all patients are admitted as inpatient.  Doctors have the option of observing the patient in the hospital to decide whether or not they will write an order to admit the patient into the hospital.  Observation is outpatient care and the rules for what is and what isn't paid for by Medicare change quite dramatically.  

How does a physician know which status is appropriate under the millions of potential variables in patient care?  They don't.  It's a giant guessing game on the part of us doctors.    No physician anywhere in the the universe of their residency training learns when to write an order for inpatient vs observation.  In fact, dozens of times a month, the physician gets it wrong (in both directions) and a whole lot of paper work must happen for a hospital to get paid for the doctor's mistake.  The only possible solution is to have a utilization review expert monitor all patients being admitted to the hospital to decide, in real time, what the appropriate status is.  For most hospitals, this option is simply not a viable or reasonable option.

Patient admissions for reasons such as  chest pain or abdominal pain or back pain or weakness do not guarantee that Medicare will pay for an inpatient status.  The rules are complex and they vary from Medicare carrier to Medicare carrier as well as from private insurance company to private insurance company.  And don't get me started with Medicaid.  Those folks don't want to pay for anything, even if the patient was on their death bed.  Unfortunately, ObamaCare promises to massively expand Medicaid in the states that will allow it. What a mistake that will be for the states that believe they will benefit from expansion of that failed program.  You can't expand a broken program and expect success to prevail.  

Why Medicare believes the physician should be in charge of deciding inpatient vs observation is beyond me.  This is a payment issue, not a medical issue.  I take care of patients the same whether they are inpatient or observation.  Not a day goes by where insurance companies are denying entire $20,000 hospital stays because the physician wrote an order for inpatient instead of observation, even though the rules for defining the correct status vary widely from insurance company to insurance company.  

Whether a physician writes the order for their patient to be inpatient or observation status has profound implications on what Medicare will and will not pay for.  How is the patient supposed to know if they are inpatient or observation?  Unless the patient asks, they will have know way of knowing except when they get a huge hospital bill after they get home for all of their hospital administered home medications that aren't covered under their Medicare Part A or Part B (and often not covered under their Part D coverage either).   Then they'll know and they are going to be furious.   Hospitals don't have to worry though. Patient satisfaction scores on observation patients don't count in the  Medicare reimbursement formulas. Double whammy for you Medicare observation patient.  Call your Congressman if you want to complain.  We are just playing by the rules.

Now that I've established just how irrational the whole inpatient vs observation process really is, what does it mean with regards to getting your paid nursing home benefits under the SNF benefit?  Remember what I wrote earlier.  The three magic words are three inpatient midnights.  This original Happy Hospitalist ecard helps sums it up.

"Oh man.  Not another ER admission for needsthreemidnightitis."

Oh man.  Not another ER admission for needsthreemidnightitis doctor ecard humor photo.


Medicare will pay a portion of these SNF costs (the rest of which are picked up by patient's supplemental policies) for a up to 100 days for every benefit period.   Once these days are used up,  the patient will be financially responsible for any other skilled nursing benefits until the next benefit period begins.  How does Medicare define a benefit period?   A benefit period ends when you have not been in a hospital or in a  SNF for 60 consecutive days.  Once a new benefit period begins you will need another three midnight stay to qualify for additional SNF days (up to 100 days every benefit period).  If Medicare won't pay for additional days, neither will the supplemental policy as these policies will usually only cover the portion of approved days that Medicare doesn't cover.

Most patients who use up 100 days of SNF benefits would never go another 60 days in a row without being admitted to the hospital.  They use up their 100 days for a reason. They cannot avoid living at home without avoiding frequent hospital level care.  Clinically, what I see is that most patients who have used up their 100 days in a benefit period will are palliative care candidates or require long term care in a nursing home.

The three inpatient midnight rule means Medicare will pay for SNF benefits if the patient has been in the hospital, as an inpatient status, for at least three consecutive midnights in the prior 30 days.  If a Medicare patient gets admitted as observation for the first midnight, but changes to inpatient status the following day, that first midnight will not count toward the three midnight rule.  However, I have heard some efforts to get that changed are in the works.  I know.  It's asinine.  Welcome to the world of third party insurance.  If you ask me, this is why most hip and knee surgery patients  will stay  in the hospital for three days past their operative date so they can qualify for their SNF benefits. I suspect if the rules changed to two days, these surgical patients would be gone a day earlier.  And many medical patients would not linger for that final midnight. 

Many patients who meet the criteria for inpatient linger aimlessly for an additional hospital day, just so they can qualify for their paid SNF benefits.  Don't think it happens in your hospital?   It does.  It happens everywhere.  Doctors, nurses, social workers,  patients and their families are all complacent in playing this  Medicare game so their patient can safely disposition out of the hospital to a nursing home for at least the next 30 days.  After 30 days, by all means, they are welcome back to the hospital anytime they want.   We aren't dinged with a readmission penalty. 

Patients all across America stay that extra midnight just so they can go to a nursing home and use up their 100 days of SNF benefits to keep them from being forced to sell their assets to qualify for Medicaid.   These are patients who haven't been in the upright position for three years, but somehow get classified as having rehabilitation potential. It's all legal because medical necessity is so broadly interpreted.  And medical necessity is the standard under the rules of the game.

What happens if patients use up their 100 days of SNF benefits  while at a SNF?  They will either pay for further SNF benefits out of pocket, discharge to home to fend for themselves or they will  transition into full time nursing home status.  Medicare does not pay for long term care in a nursing home. And unlike hospitals regulated under EMTALA rules, nursing homes are not required to take care of patients for free. If patients cannot afford a long term nursing home, and they need one, and family is unwilling or unable to step up,  these patients often  have to apply for Medicaid.   Interestingly enough, once a patient goes on Medicaid, the three midnight rule goes out the door.  Patients can go to a SNF or long term care facility at anytime, including from the ER, as long as there are still places that will be willing to accept Medicaid.  

So, if you are a family member of a Medicare patient and they are too weak to go home and they don't have long term care insurance and you're going on vacation for two weeks and you want to make sure mom or dad is safe in a nursing home while you're gone, you have to know how to play the game to make sure mom gets admitted to the hospital as an inpatient.  Here's what you do.  You take her to the hospital and tell the ER doctor you found mom on the floor with garbled speech, unable to move her right side.  Tell the ER doctor she's been complaining of horrible nausea and headache for three days, has taken some of your Zofran for nausea but simply can't keep anything down.  Tell the ER doctor that her symptoms have resolved on the ride to the ER.

What you've just described are stroke like symptoms.  Any reasonable ER doctor will call the hospitalist to admit your mom with a diagnosis of stroke symptoms.  Of course, that in and of itself won't get her qualified for inpatient.  In fact, TIA (transient ischemic stroke) is often only paid for under observation status.  The key here is to demand that the hospitalist write an order for the nurse to do "every 4 hour neuro checks".   That will qualify mom under the intensity of service requirement for inpatient status.  If mom has been nauseated for three days, she should also qualify for failure of outpatient therapy of nausea as the pill Zofran is simply not controlling her symptoms.  

While mom's entire work up may be negative (normal echo, carotids, MRI, lipid panel, telemetry), you make sure to tell mom to fake a constellation of symptoms over the next three days to qualify her for three midnights.  This can include persistent headache, chest pain, intermittent complaints of numbness or weakness, problems swallowing, visual changes, light headedness, dizziness.  Even faking hallucinations will get her a diagnosis of acute delirium and guarantee her inpatient status.

Just remember people, if you're going on vacation and you need to get mom or dad to a nursing home for a few weeks to be paid for by Medicare under their SNF benefits, follow my protocol above and you will have nothing to worry about.  Otherwise, you could be dealing with a doctor writing observation status and messing up your cruise to the Mediterranean.  And you definitely don't want that to happen.  Read here for more information from the Bible on Medicare SNF benefits.  

If you think I am offering medical advice, immediately call 911 and get yourself admitted into the hospital.  However, there is no guarantee you will qualify for inpatient.  In addition, some of this post is for entertainment purposes only and likely contains humor only understood by those in a healthcare profession. Read at your own risk.


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