Medicare Rehab: Two Tips and Traps

Here is the scenario: Mr. Smith, a widower, is taken by ambulance to the hospital due to a medical emergency. After he has been treated at the hospital for “a few” days he is not well enough to go home directly from the hospital. With the help of his family, he moves to his chosen rehabilitation facility or rehab unit of a skilled nursing facility (“SNF”). The family expects Mr. Smith’s Medicare benefits to pay 100% of his first 20 days and knows that Mr. Smith must pay a daily co-pay of $176 (2020) from day 21 up to 100 days for his rehab. The family assumes that Mr. Smith’s Medicare Part A will pay for his time in the hospital.

Tip/Trap #1: The admission versus observation trap. If Mr. Smith was not an admitted patient at the hospital for at least three midnights in a row Medicare will not pay for his rehab. And, for those days he was not admitted, but merely under observation, he will be billed under Part B, as an out-patient, which is much more expensive than Part A. How can you tell if Mr. Green was admitted or under observation? Only from reading the medical records. And, the actual time of admission must be noted. The clock has to strike midnight three times. Mr. Smith’s surroundings provide no clue as to whether or not he is an admitted patient or under observation. For example, he could be admitted while in the Emergency Department waiting for a room. Or, he could be in a semi-private room for two weeks “under observation” and not admitted (True story). If Mr. Smith is placed “under observation” or does not stay for three midnights “as admitted”, he can appeal this decision, but the hospital is not required to give notice of his right to appeal.

Tip/Trap #2: Don’t let Medicare-paid rehab end too soon. If Mr. Smith avoided the first trap, watch out for the second trap. Medicare rehab treatment and payments must continue up to the maximum of 100 days as long as Mr. Smith’s medical condition is improving, maintained, or even if his deterioration is slowed or prevented as a result of the rehab services.  If Medicare benefits are stopped too soon, Mr. Smith can appeal.

Summary: As an advocate, read the medical records to ensure the hospital patient was admitted at least three midnights in a row; and, advocate for rehab services to continue as long as possible up to the 100 days allowed.