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Medicare 3 Day Rule Changes

What older adults should know about this controversial Medicare policy

Lewis Lipsitz, M.D.'s picture
Medicare 3 Day Rule Changes
Medicare 3 Day Rule Changes

Imagine this scenario: your 75-year-old mother falls and can no longer walk independently. You take her to the hospital emergency room. Although she doesn’t need hospitalization, she does need rehabilitation in a skilled nursing facility to regain her ability to walk.

The catch--she must be admitted to the hospital for three nights in order for Medicare to pay for rehabilitation. Without that stay, you or she must either pay for her care in a nursing facility or nursing home (about $300-$430 per day) or hire caregivers to support her at home ($20-$30 per hour).

This controversial “three-day rule” is out of date. It was created by Medicare in 1965, when it typically took three days to admit, evaluate, develop a care plan and discharge a patient from the hospital. Now, the process takes just a day or two. 

Eliminating the rule might be one way to reduce unnecessary hospitalizations and improve patient care without increasing costs to the patient or the federal government. But until that happens, here’s what you should know:

  • If you or a family member experiences a sudden decline in function, such as a fall followed by difficulty walking, the hospital might not be the right place to get the needed rehabilitation. The reason for the decline should be evaluated by a physician or nurse—go to the emergency room only if necessary. If you or your family member is admitted to a hospital, be sure to ask if it is for “observation,” which does not qualify for Medicare payments for rehabilitation, or whether there is an underlying condition that would warrant a three-day hospitalization and qualify for subsequent rehabilitation. 
  • If you have a loved one who lives in a nursing home, talk with the head nurse and physician about how to avoid sending her to the hospital. It’s not uncommon to transfer patients to the hospital to relieve overburdened staff; in addition, the nursing home receives more money from Medicare when a patient is discharged from the hospital, creating a financial incentive for hospitalization. Meet with the primary care team to develop an appropriate care plan if an acute medical problem should develop. Many patients with end-stage Alzheimer’s disease or other debilitating conditions prefer to be treated with comfort measures in the nursing home, rather than risk the possible adverse consequences of a hospitalization (resistant infections, pressure ulcers and confusion, to name a few).
  • Explore purchasing long-term care insurance, joining a managed care plan that provides rehabilitation, or moving to a continuing care retirement community that has rehabilitation and long-term care services available if needed.

I wholeheartedly support the drive to reduce excessive hospital use and provide appropriate care in less expensive venues; however, this national priority should also encourage the development of new payment models that provide rehabilitation services without the three-night stay requirement, so that seniors can regain their functional abilities and achieve as much independence as possible. 

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Vice President, Academic Medicine Director, Institute for Aging Research

Lewis Lipsitz, M.D., has spent most of his career in geriatric medicine at Hebrew SeniorLife (HSL), where he currently serves as vice president for academic medicine and director of the Institute for Aging Research. He also holds the Irving and Edyth S. Usen and Family Chair in Medical Research. In addition to his positions at HSL, he is a professor of medicine at Harvard Medical School and chief of the Division of Gerontology at Beth Israel Deaconess Medical Center.

Dr. Lipsitz's research interests include falls, fainting, blood pressure regulation, cognitive dysfunction, and...

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