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Counting Midnights: Medicare and Skilled Nursing Facility Benefits

Medicare and Medicaid were established during the presidency of Lyndon B. Johnson, who signed HR 6675 into law in 1965. The stipulation governing extended care benefits was established shortly thereafter. It mandates that discharge to a skilled nursing facility (SNF) can be covered for Medicare beneficiaries after a qualifying stay of 3 or more consecutive inpatient midnights—a rule that continues to this day. 

Much has changed in hospital medicine and policies since 1965. Notably, the average length of hospital stay in 1965 was 14.2 days; today, it is only 5.2 days. The increasingly routine classification of inpatient hospitalization as “observation” status is also relatively unique to current healthcare practices. In an editorial for the Journal of Hospital Medicine, Ann Sheehy, MD, MS, associate professor and head, Hospital Medicine co-authored an article with Representative Joe Courtney of Connecticut to discuss data, societal considerations, fiscal implications, and policy aspects in support of modernizing the requirement such that any midnight spent in the hospital could count toward the 3-midnight stay requirement, not just consecutive midnights. 

The editorial commented on a new chart review study from researchers in Delaware. Researchers found that fewer than 1 in 5 previously community-dwelling hospitalist patients followed recommendations for post-acute SNF stays after observation hospitalization, with more than 40 percent citing financial concerns as the reason for declining. (In 2012, the Office of Inspector General had reported a $10,503 beneficiary out-of-pocket cost per uncovered SNF stay following an observation hospitalization). The Delaware study also found that patients that had been recommended for SNF were more likely to be rehospitalized within 30 days. 

From a fiscal standpoint, Dr. Sheehy and Rep. Courtney noted that a 2006-2010 Medicare Advantage program that waived the 3-midnight requirement resulted in decreased hospital lengths without increased SNF utilization or stay lengths. Cost savings from bundled payment scenarios and avoidance of hospital readmissions deserve consideration, they assert. “We believe that these correlations strongly support rescinding the 3-midnight requirement, or at least amending it to allow nights spent under observation to count as ‘inpatient’ for the purposes of SNF benefit coverage,” wrote Dr. Sheehy and Rep. Courtney. 

Rep. Courtney has sponsored a bill to count any midnight spent in hospital toward the 3-midnight requirement. The bill was re-introduced on March 8, 2017 as H.R. 1421.

by Robyn M. Perrin, PhD - 3/9/2017
Note: a previous version of this article incorrectly stated Rep. Courtney's state. Congressman Joe Courtney represents the 2nd district of Connecticut.