Dumb Policy: 3-Night Hospital Requirement for Medicare SNF

by: Alex Smith @AlexSmithMD

The patient was elderly and was hospitalized for a COPD exacerbation.  Fortunately, her breathing problems were easily treated, and came under rapid control after one night of hospitalization.  She was ready to return to the nursing home the next day. I informed our discharge planner that she was ready to be discharged, and was shocked to hear her respond that, “Her primary care physician said she needs to stay for 3 nights in order to quality for the Medicare skilled nursing facility benefit before the nursing home will take her back.” 

This seemed nuts – dumb even – she “needs” to stay in the hospital, exposing her to all the risks of hospitalization, to qualify for the Medicare Skilled Nursing Faciliity (SNF) benefit?  Her skilled needs would be the increased frequency of nebulizer treatments – fair enough.  At that point, she had not experienced any loss of function that would warrant skilled rehabilitation care above the usual custodial care.  However, an additional 2 days in the hospital certainly put her at dramatically increased risk for the hospital disability syndrome.  And when she returns to the nursing home on the Medicare SNF benefit, the nursing home will be paid a considerably higher rate than the traditional rate Medicaid pays for long term care. What was best for the patient was at dramatic odds with what was best for the (financial) bottom line of the nursing home.

Why does the US have this dumb 3-night hospital stay requirement for postacute nursing care?  In a very thoughful and carefully written article (free online in JAMA), Dr. Lew Lipsitz of Hebrew Senior Life explains in clear langauge the history and complex issues surrounding this seemingly innane policy.  He starts with two case scenarios that, like my patient, also make you scratch your head:

• An 80 year old man who fell at home and needs rehabilitation must be hospitalized for 3 days before receiving rehab
• A 90 year old nursing home resident with pneumonia that requires IV fluids must be hospitalized for treatment (cost of hospitalization $12,000)

It turns out the 3-night requirement is not as cut-and-dried senseless as it may seem.  Eliminating the 3-night stay in demonstration projects failed to demonstrate dramatic cost savings. 

In the end, however, Lew Lipsitz concludes this policy has to be eliminated, either by:

• Establishing strict criteria for SNF stay without hospitalization, such as mobility decline or delirium
• Move to a shared saving model of care like the new accountable care organizations, where the system as a whole bears greater responsibility for the costs.

I’m a big fan of both policy changes, particularly the shared savings and accountability models.  In our current system we have one nursing home, one physician, and one hospital each making money off of one patient, with little connection between. 

Dumb policy.