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Skilled Nursing Facilities and the Three-Day Stay

Original story posted on: September 11, 2019

Expect more aggressive reviews of materials beyond the three-day criteria.

Today I want to talk about skilled nursing facility, or as we often call them, “SNF” stays.

For this, I’d like to start at the beginning. I’ll go all the way back to the Social Security Act. The reason to start there is that I’m often asked, why do SNFs require a three-day stay?”

The simplest answer is “it’s the law.” That’s also why this requirement is so hard to waive. Section 1861 of the Social Security Act gives us our usual interpretation that the patient must be an inpatient for three consecutive days, not counting the day of discharge.

This year, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) published a study of 99 paid SNF claims. On review, 65 of these claims failed to meet the three-day stay requirement. The estimated three-year overpayment averaged to about $30 million per year.

The three-day is a requirement is actually the lowest threshold for SNF coverage. Several federal regulations also govern eligibility. Citations for the statute and regulations are found in the resources tab. Section 409.30 reiterates the three-day requirement and offers an exemption if the beneficiary is covered under a Medicare Advantage plan. In those cases, the plan may waive the requirement.

The next section, 409.31, is more problematic for SNF providers. This specifies that the skilled nursing care is required on a daily basis, and must be furnished for a condition specifically in response to the reason for the original hospitalization (or a reasonably associated hospital condition).

The Centers for Medicare & Medicaid Services (CMS) also defines what might constitute “skilled services,” noting that “to be considered a skilled service, the service must be so inherently complex that it can be safely and effectively performed only by, or under the supervision of, professional or technical personnel.”

Fortunately, CMS provides additional definitions. Services that could qualify as skilled include:

  • Overall management and evaluation of a care plan;
  • Observation and assessment of the patient's changing condition; and
  • Patient education services.

The common theme for these potential “skilled services” is that the record must document a need for skilled services each day. Notably, CMS also has a list of excluded “personal care services.”

What does all this mean for acute hospital and SNF providers?

  • First, it probably portends more aggressive reviews of materials beyond the three-day criteria. Just using the three-day rule, the OIG estimated $30 million in average annual overpayments.
  • Next, the actual need for skilled services will be assessed by contractors, based on SNF and hospital documentation.
  • And finally, SNF benefit solely as a result of patient choice or convenience is coming to an end.

What should SNFs do?

  • Work with acute-care hospitals to ensure that hospital discharge documentation includes a clear definition of legitimate medical need for SNF services, rather than a personal choice or patient convenience.
  • Ensure that comprehensive SNF documentation indicates the need for SNF-level care every day.

As always, review the regulations. Understand the documentation requirements. It’s important to realize that SNF reviews jeopardize SNF payments.

John K. Hall, MD, JD, MBA, FCLM, FRCPC

John K. Hall, MD, JD, MBA, FCLM, FRCPC is a licensed physician in several jurisdictions and is admitted to the California bar. He is also the founder of The Aegis Firm, a healthcare consulting firm providing consultative and litigation support on a wide variety of criminal and civil matters related to healthcare. He lectures frequently on black-letter health law, mediation, medical staff relations, and medical ethics, as well as patient and physician rights.

Dr. Hall hopes to help explain complex problems at the intersection of medicine and law and prepare providers to manage those problems.

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