Understanding the Skilled Nursing Facility (SNF) 3-Day Rule for Medicare Billing

Navigating Medicare’s billing requirements can be complex, especially when it comes to the Skilled Nursing Facility (SNF) 3-Day Rule. This rule is critical for ensuring that Medicare covers SNF services, and understanding it can help prevent denied claims and unexpected costs for patients. Here’s what you need to know about the SNF 3-Day Rule and how it affects billing practices.

What is the SNF 3-Day Rule?

The SNF 3-Day Rule is a Medicare requirement that stipulates a patient must have a medically necessary inpatient hospital stay of at least three consecutive days to qualify for Medicare-covered SNF services. This inpatient stay must occur immediately before the patient is admitted to a SNF, and it does not include the discharge day or any pre-admission time spent in the emergency department or under outpatient observation.

This rule applies not only to traditional hospitals but also to Critical Access Hospitals (CAHs) that offer swing bed services, which allow them to provide SNF-level care following an acute care stay.

Why is the 3-Day Rule Important?

The 3-Day Rule is designed to ensure that only those who truly need intensive post-hospital care in a SNF receive it under Medicare coverage. Without meeting this requirement, patients may face out-of-pocket expenses if they seek SNF care. For example, if a patient is discharged from the hospital after only two days, they would not meet the 3-Day Rule, and Medicare would not cover their subsequent SNF stay.

Additionally, during the COVID-19 Public Health Emergency (PHE), CMS temporarily waived the 3-Day Rule to provide more flexibility in patient care. However, with the end of the PHE on May 11, 2023, the standard 3-Day Rule requirements are back in effect.

Applying the 3-Day Rule in Practice

• Inpatient Days: Only full inpatient hospital days count toward the 3-Day Rule. The day of discharge, time spent in the emergency department, or time under outpatient observation does not count.
• Swing Bed Services: Hospitals and CAHs offering swing bed services must also adhere to the 3-Day Rule for Medicare to cover the SNF services provided.

For a patient to qualify for SNF services under Medicare:

• The patient must have stayed in the hospital as an inpatient for at least three consecutive days (excluding the discharge day).
• The SNF admission must occur within 30 days of the qualifying hospital stay, unless it’s medically inappropriate to admit them sooner.

What Happens if the 3-Day Rule Isn’t Met?

If a patient does not meet the 3-Day Rule, Medicare will not cover the SNF services. This makes it essential for hospitals, CAHs, and SNFs to clearly communicate the number of inpatient days to patients and their representatives to prevent any misunderstandings regarding coverage.

For example, if a patient is admitted to the hospital on April 16 and discharged to a SNF on April 18, the hospital stay would not satisfy the 3-Day Rule, as the patient was only in the hospital for two days (April 16 and April 17). In this case, the SNF services would not be covered by Medicare, and the patient may need to pay out of pocket.

Communicating Coverage and Financial Responsibility

Hospitals and SNFs must work closely together to ensure accurate communication regarding a patient’s inpatient status and the implications for SNF coverage. Patients and their representatives should be made aware of their potential financial liability if the 3-Day Rule is not met.

In some cases, certain Medicare Shared Savings Program Accountable Care Organizations (ACOs) or CMS Innovation Center models offer waivers for the 3-Day Rule. For example, the Comprehensive Care for Joint Replacement Model and the Bundled Payments for Care Improvement Advanced Model allow eligible patients to bypass the 3-Day Rule under specific circumstances.

Additional Resources

For further details on the 3-Day Rule and SNF billing, you can refer to these resources:

• Medicare Benefit Policy Manual
• CMS SNF 3-Day Rule Waiver Guidance
• Medicare Claims Processing Manual

Understanding these rules and properly applying them in practice can help healthcare providers ensure compliance and prevent unnecessary financial burdens for patients.