Does Medicare Cover Nursing Homes?
Medicare only covers a small portion of nursing home costs for a very limited amount of time, and only in limited circumstances. The main types of Medicare coverage are Part A and Part B. Medicare Part A pays for hospital, skilled nursing home, home health and services. Medicare Part B pays for medically necessary and preventative services, such as durable medical equipment, ambulance services, mental health hospitalizations, flu and pneumococcal shots and certain health care screenings.
A qualified hospitalization is a pre-requisite to Medicare Part A nursing home coverage.
Medicare coverage of a beneficiary’s nursing home expenses is dependent on the type and duration of a preceding hospitalization. Generally speaking, someone 65 or older with Medicare Part A coverage who has a qualifying 3-day hospital stay can receive Medicare coverage of some of their nursing home costs for a limited time. Coverage only applies if the beneficiary goes from the hospital to the nursing home within 30 days of their hospital discharge, and then only if they need and receive “skilled” nursing or rehabilitation services at the facility. Out of pocket co-pays kick in after the 20th day of Medicare Part A coverage, and in 2018, these co-pays will be $167.50 per day. Medicare Part A benefits for skilled nursing services in a nursing home are exhausted no later than the 100th day of coverage, and can end sooner if “skilled” services are terminated.
The first concern for whether or not Medicare will pay for initial nursing home expenses is whether or not the beneficiary had a qualifying 3-day hospital stay. Hospital admission status is key. Hospitals are permitted to classify patients as being “admitted” or merely as an outpatient on “observation status.” Two different patients, with identical symptoms, treatment, and testing spanning several days of hospitalization could be classified differently, in the same or different hospitals. It’s all up to the hospital doctor.
Medical expenses can mount quickly if the Medicare beneficiary is not formally admitted to the hospital for a qualifying stay. Although Medicare Part B could cover some of the services provided in the hospital, subject to a deductible, if the patient is not enrolled in Medicare Part B, the costs for their hospital stay, treatment and testing alone can be enormous. Implications extend beyond Medicare Part A non-coverage of a beneficiary’s hospital stay, to exclude Medicare Part A coverage for any subsequent nursing home stay.
Beneficiaries can fight to have their hospitalization classification changed so nursing home coverage is available to them after their hospital discharge.
Medicare beneficiaries have rights to be informed of their hospitalization status. Hospitals are required to provide federally-mandated information to any Medicare beneficiary that is kept on “observation status” for more than 24 hours, including a written notice acknowledged by the patient and an oral explanation of the reasons and implications of “observation status.” Federal guidelines caution that hospitals should be able to resolve whether or not to admit or discharge a patient that is being held on “observation status” in less than 48 hours with rare exception. In fact, the guidelines anticipate that the hospital physician should be able to decide whether to admit or discharge the Medicare beneficiary within 24 hours. But, they are not required to do so.
The Medicare beneficiary and their representative, in chorus with the beneficiary’s community physician, can lobby the hospital physician for the patient’s admission status to be changed—especially if the hospitalization lasted more than two midnights. Of course, these complex issues evolve quickly and while the patient is sick, so it is important for the patient to have an active family member or advocate. They can inform the Medicare beneficiary’s community physician early of the hospitalization and the patient’s need for Medicare Part A coverage. The community physician can also be very helpful in lobbying for additional medical services and coverage if the Medicare beneficiary goes into the nursing home.
Nursing home coverage under Medicare Part A is limited.
Once a Medicare beneficiary is admitted to the nursing home with Medicare Part A coverage for services there, they must be concerned about whether or not and for how long they are receiving “skilled” services. In order for Medicare Part A coverage to apply, the beneficiary must receive daily “skilled” nursing or rehabilitation services. Some examples of skilled services include: overall management and evaluation of care plan; observation and assessment of the patient’s changing condition; tube and gastrostomy feedings; ongoing assessment of rehabilitation needs and potential; therapeutic exercises or activities; gait evaluation and training.
Nursing homes decisions to terminate Medicare Part A coverage are appealable.
Under Medicare laws, if a Medicare beneficiary entered the nursing home with Medicare Part A coverage, the nursing home must advise them if it believes their Medicare Part A coverage is terminating. The nursing home decides this based on its own records concerning the beneficiary and their treatment. The beneficiary has appeal rights if they disagree with the decision. Unfortunately, the time between getting the first notice and the deadline for invoking appeal rights is expedited.
The nursing home provides Notice of Termination of Medicare Coverage only two days before the patient loses coverage. The beneficiary’s ability to appeal is contained within the notice itself and must be exercised by noon the next day. The nursing home is required to assist the beneficiary in filing their appeal.
While any appeal is pending, the Medicare beneficiary should insist on continued skilled nursing or rehabilitation treatment—even if they have to pay out of pocket. Medicare will only pay for services that have been provided. The continued provision of services is one factor that may be considered during the appeal.
Ensure providers are upholding the correct Medicare coverage standard by involving advocates.
Many providers confuse how long skilled services should continue with a benchmark of patient improvement. Improvement is not the standard. After a federal class action lawsuit, the government entered a settlement agreement acknowledging that a Medicare beneficiary’s need for skilled services to maintain or prevent a decline in their functional status is the benchmark for continued Medicare Part A coverage.
When appealing the termination of Medicare Part A coverage, the beneficiary and their representative should enlist the support of the beneficiary’s community physician. If the community physician believes that continued Medciare Part A services are needed to maintain the beneficiary’s condition or to prevent a decline in the beneficiary’s functional status, they can communicate their medical opinion directly to the facility doctor. The community physician can also write a letter of support to be presented to the Beneficiary Family-Centered Care Quality Improvement Organization (“BFC-QIO”) which decides the initial appeal.
The BFC-QIO is required to resolve the beneficiary’s appeal within seventy-two hours. During that window of time, the BFC-QIO is required to review the beneficiary’s medical records, confer with the nursing home about why it made the decision to terminate the beneficiary’s Medicare coverage, and consult with the beneficiary about why they are protesting the nursing home’s decision. If the patient continued their skilled services or rehabilitation after receiving the Notice of Termination of Medicare Coverage and obtained support from their community physician, they can use this evidence when they explain to the BFC-QIO why they believe the additional services were needed to maintain or prevent further decline in their functioning. If the BFC-QIO does not agree to continued coverage, additional appeals are available.
When Medicare ends, Medicaid can pay for nursing home expenses.
In the end, once Medicare coverage of a beneficiary’s nursing home stay ends, Medicaid becomes the primary—sometimes the only—benefit available to pay for continued care in the nursing home. If the Medicare beneficiary is not financially eligible for Medicaid, expenses can mount quickly. Planning with an elder law attorney can help protect Medicare beneficiaries from surprise long term care expenses. Contact Senior-Legal for a free initial consultation to start your planning now.