CHA Advocates for Waiving 3-Day Inpatient Hospital Stay Requirement for Skilled Nursing Facility Coverage

Centers for Medicare & Medicaid Services
Department of Health and Human Services

Re:       File Code CMS-1455-P

Our organization, California Health Advocates, appreciates the opportunity to comment on the proposed rule for hospitals to bill Medicare Part B when a claim for an inpatient hospital stay has been denied because it was deemed not medically reasonable and necessary.

California Health Advocates (CHA) is an independent, non-profit organization whose mission is to provide quality Medicare and related healthcare coverage information, education and policy advocacy.  We provide technical assistance and training to local Health Insurance Counseling and Advocacy Programs (HICAP), which is California’s State Health Insurance Assistance Program (SHIP).

We support CMS’s attempt to resolve the problems that arise when hospitals keep Medicare beneficiaries under observation for longer than 48 hours1 and when an inpatient stay is later denied.

C.  Billing for Part B Outpatient Services in the Three-Day Payment Window

CMS maintains the 3-day payment window policy. This policy requires that payment for certain outpatient services provided on the day of admission or during the 3 days prior to admission be bundled with the payment for the beneficiary’s inpatient admission. Since payment for outpatient services is bundled, we argue that any day a beneficiary is kept as an outpatient should count toward the 3 consecutive days required for Medicare coverage of a skilled nursing facility stay.

E.  Beneficiary Liability Under Section 1879 of the Act

CMS recognizes that the proposed rule would create a unique liability issue for Medicare beneficiaries that did not previously exist. CMS raises the point of beneficiary knowledge, which is essential for beneficiaries to exercise their right to make informed decisions. Since beneficiaries do not have prior knowledge of non-coverage, and existing liability notices, such as the HINN and ABN, are not applicable, CMS proposes to conduct an educational campaign and issue materials to raise beneficiary awareness. We do not believe an educational campaign or issuing materials is adequate.

Will the educational campaign be a public campaign to raise awareness of all beneficiaries or will it specifically target beneficiaries admitted as inpatients? If a public campaign, information that certain denied Part A hospital inpatient services may be covered under Part B may be too technical for the average person to grasp, especially if they do not understand that Part A and Part B services have different cost-sharing. Such information may also be irrelevant for the average beneficiary who is not in the hospital and who will probably not remember such information if they get into the situation of having Part A hospital inpatient services denied.

If the campaign specifically targets beneficiaries admitted as inpatients, it is unrealistic to expect a beneficiary whose condition is serious enough for a doctor to admit him or her to understand any of the various aspects of this rulemaking. A person who is sick and needs to be taken care of is unlikely to be in a state of mind to grasp the implications of his or her inpatient hospital services being denied later. Even now, beneficiaries are expected to ask if they are an inpatient or outpatient.2 When a person’s condition lands them in a hospital, likely through the emergency room, he/she probably will not remember to ask if he/she is an outpatient or inpatient. When we inform beneficiaries about this during community education presentations, they invariably protest that this is an unreasonable onus to put on someone in a hospital, whether admitted or outpatient.

Even the “Important Message from Medicare” Form CMS-R-193, which informs a beneficiary that he/she is an inpatient and about his/her appeal rights, assuming he/she is alert enough to understand, is ineffectual if Part A inpatient services are later denied.

If a beneficiary is admitted, and the Part A inpatient services are later denied, usually after the beneficiary is discharged, the beneficiary has no say in the matter. Nothing in the proposed rule gives the beneficiary control over the situation; no educational campaign or materials to give beneficiaries information in advance will help them. The proposed rule may help hospitals get paid something rather than nothing if Part A inpatient services are later deemed not medically reasonable and necessary. But the proposed rule does not help beneficiaries who would be liable for additional Part B inpatient services, as CMS notes, even if they receive a refund for Part A inpatient services they paid. More importantly, what CMS fails to mention in the proposed rule is the beneficiary’s liability for a subsequent SNF stay, which can be tens of thousands of dollars. Beneficiaries who had a SNF stay after being discharged as a hospital inpatient, but whose Part A inpatient services are denied after the fact, are extremely distressed to find out that they are liable for the costs of the SNF stay. Unlike the Part B cost-sharing they may be a liable for, which may be covered by supplemental insurance, no supplemental insurance covers any cost of the SNF stay when Medicare does not cover the stay. Addressing this problem should be one of the highest priorities as CMS solves the many problems that arise when Part A inpatient services are later denied.

Respectfully submitted,

Elaine Wong Eakin
Executive Director

1. Medicare Benefit Policy Manual, chap. 6, §20.6
2. Are You a Hospital Inpatient or Outpatient? If You Have Medicare – Ask! CMS Product No. 11435, revised Feb 2011

Karen Joy Fletcher

Our blogger Karen Joy Fletcher is CHA’s Communications Director. With a Masters in Public Health from UC Berkeley, she is the online “public face” of the organization, provides technical expertise, writing and research on Medicare and other health care issues. She is responsible for digital content creation, management of CHA’s editorial calendar, and managing all aspects of CHA’s social media presence. She loves being a “communicator” and enjoys networking and collaborating with the passionate people and agencies in the health advocacy field. See her current articles.