Who pays for a skilled nursing stay, Medicare or you?

Summary

The article explains how Medicare Part A covers (or doesn’t cover) stays in a skilled nursing facility (SNF). To qualify for Medicare-covered SNF care, a beneficiary on original Medicare must have been formally admitted to hospital as an inpatient for at least three consecutive days (not counting observation or outpatient days) and then discharged to a skilled nursing facility for medically necessary care.

Many patients who think they were “in hospital” were actually classified as outpatients on observation status; those days usually don’t count toward the three-day inpatient requirement. The Medicare Outpatient Observation Notice (MOON) must be provided in writing (and with an oral explanation) within 36 hours of starting observation services for original Medicare enrollees. If you don’t meet the inpatient requirement, you may be liable for the full cost of the SNF stay.

Key Points

Medicare Part A covers skilled nursing care only if you had a qualifying three-day inpatient hospital stay followed by discharge to a SNF for skilled care.
Being in the hospital as an outpatient (including observation status) does not count toward the three inpatient days requirement.
The MOON (Medicare Outpatient Observation Notice) must be given in writing and explained orally within 36 hours for original Medicare — it does not apply to Medicare Advantage plans.
If you were never formally admitted as an inpatient for the required three days, you may have to pay 100% of the skilled nursing facility bill out of pocket.
Always ask hospital staff (doctor, social worker or patient advocate) whether you are an inpatient or outpatient — your admission status directly affects costs and SNF eligibility.
If there’s a dispute, beneficiaries can ask about retrospective inpatient status, appeal decisions, and consult the “Medicare & You” handbook for details (the rule is explained on Page 28 in the handbook referenced).

Why should I read this?

Short and blunt: if you or someone you care for is moving from hospital to rehab, this is vital. Admission status can mean the difference between Medicare covering rehab or you footing a hefty bill. It’s an easy thing to miss — ask the right questions now and save yourself a nasty surprise later.