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3-day hospital stays, hospice surveys under scrutiny

September 11, 2013
by Bob Gatty
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The issue of Medicare coverage for nursing home care after patients leave the hospital continues to draw attention in Washington as former Centers for Medicare & Medicaid Services (CMS) administrator Donald Berwick has urged elimination of the three-day hospital stay requirement for beneficiaries seeking access to skilled nursing care.

Berwick, who served as CMS administrator from July 2010 through December 2011 and is now a Democratic candidate for governor of Massachusetts, told the Boston Globe in late August that he sought an end to the three-day requirement while he was leading the agency, but “There was concern in the administration that it would lead to abuse of the system.” Berwick, however, said it would be possible to establish safeguards to prevent such abuse, such as requiring a doctor to verify a patient’s condition.

Critics have said the three-day requirement often surprises patients who are then required to pay for nursing home care after they are released from observation status. Industry organizations have been lobbying for change, and Rep. Joe Courtney (D-CT) has sponsored legislation that would eliminate the distinction between inpatient and observation status.

Under Courtney’s bill, which now has 93 cosponsors, patients who spend at least three days in the hospital, regardless of their classification, would qualify for Medicare coverage. A similar bill has 16 bipartisan cosponsors in the Senate.

Berwick said the current system is unfair. “The patient ends up holding the bag, and that’s not fair or appropriate,” he told The Globe.

The American Health Care Association/National Center for Assisted Living (AHCA/NCAL) has urged elimination of the three-day minimum inpatient hospital requirement. In a news release following The Globe’s story, the organization said the issue is particularly challenging in light of the increasing use of “observation” status in hospitals, given that this time is considered outpatient and does not count toward the three-day stay requirement.


Berwick’s call for CMS to take direct action follows the CMS FY2014 inpatient payment final rule, which provided doctors and hospitals guidance on conferring inpatient status for stays that cross at least two midnights and thereby allow for coverage under the Medicare Hospital Inpatient Part A benefit.

CMS believes this change will help reduce the use of observation stays, AHCA/NCAL observed, adding that the organization will watch closely to see whether the objective is accomplished and beneficiary access to post-acute care is improved.

“AHCA/NCAL urges CMS to use its authority to permanently address the observation stay issue and supports elimination of the three-day stay altogether,” the organization said. “The Association also continues to advocate for [Courtney’s] legislation.”


On another subject, involving hospices, the Department of Health and Human Services Office of Inspector General (OIG) issued a memorandum August 29 urging improvement in the rate of hospice recertification surveys.

OIG said its investigation revealed that as of February 28, 17 percent of state-surveyed hospices had not been recertified within the preceding six years, with some experiencing even longer intervals. In 12 states, more than 25 percent of hospices had not been recertified within the past six years.

The findings, said the IOG, raise concerns about whether CMS and contracted state survey agencies can ensure that hospices comply with Medicare quality-of-care requirements for hospices.

“Therefore, we reiterate the recommendation that CMS set specific time frames for the frequency of hospice recertification surveys,” the OIG memorandum stated.

According to the report, between 2005 and 2011, Medicare payments to hospices increased from $8.l2 billion to $13.8 billion and the number of hospices certified for Medicare increased by 43 percent, from 2,537 to 3,632, during the same period. The number of Medicare beneficiaries receiving hospice services increased from 871,249 to more than 1.2 million.

LeadingAge pointed out that congressional committees have been discussing ways to decrease Medicare fraud. LeadingAge said it has recommended that Congress address the need for more frequent surveys for hospice providers.

Bob Gatty has covered governmental developments for the trade and business press for more than 30 years. He is founder and president of G-Net Strategic Communications, Sykesville, Md.