After recent advocacy efforts, Congress recently introduced the Improving Access to Medicare Coverage Act of 2021, which is legislation designed to fix a Medicare policy that excludes coverage of skilled nursing care for certain patients, resulting in unexpected out-of-pocket costs. Under Medicare law, patients must have an inpatient stay in a short-term acute care hospital spanning at least three consecutive days (not counting the day of discharge) in order for Medicare to pay for a subsequent stay in a SNF. However, acute care hospitals are increasingly identifying patients as in “observation,” an outpatient designation, rather than admitting them as inpatients.
Outpatients may stay for multiple days and nights in hospital beds and receive medical and nursing care, diagnostic tests, treatments, medications, and food, just as inpatients do. However, although the care received by patients in observation status can often be indistinguishable from the medically necessary care received by inpatients, outpatients who need follow-up care do not qualify for Medicare coverage in a SNF. As a result, the Medicare beneficiary ends up being responsible for paying for the SNF stay, which places an unfair burden on the beneficiary through no fault of the beneficiary. Counting observation days toward the Medicare benefit is a common-sense policy that does not affect hospital care but does protect the ability of beneficiaries to receive needed post-acute nursing home care. For these reasons, we support passage of the Improving Access to Medicare Coverage Act.