Medicare ‘s 3-Day Hospital Stay Rule
The Medicare 3-day hospital stay rule is a screening mechanism so that Medicare only covers skilled nursing facility (SNF) care for patients with short-term rehabilitation needs. The 3-day rule provides that SNF care would be covered only if the Medicare beneficiary has a prior inpatient hospitalization of at least three consecutive days. Because of the 3-day rule, patients without a qualifying hospitalization may be discharged to less appropriate care settings or hospitals may extend inpatient stays unnecessarily to help patients meet eligibility requirements and avoid having them pay for SNF care out-of-pocket. The rule, however, may also may prevent some patients from being discharged prematurely because Medicare’s prospective payment system incentivizes hospitals to discharge patients as early as possible.
The 3-day hospital inpatient stay rule was waived for more than two years during the Covid-19 pandemic but was reinstated on May 12, 2023. A recent study evaluated changes in inpatient length of stay, SNF utilization, spending, and short-term health outcomes among traditional Medicare beneficiaries following the reinstatement of the 3-day hospital stay rule.
The study found: “Reinstatement of the 3-day rule was associated with a 1.13 percentage point increase (95% CI, 0.61-1.66 percentage points; p<0.001; relative change, 1.9%) in the likelihood of an inpatient stay lasting at least three days. Among patients discharged to SNFs, 3-day rule reinstatement increased the probability of an at least three-day hospitalization by 5.57 percentage points (95% CI, 4.91-6.24 percentage points; p<0.001; relative change, 6.4%). No significant changes were observed in the overall probability of SNF discharge, 30-day rehospitalization, 30-day mortality, Medicare spending or total SNF days. Subgroup analyses showed greater increases in at least three-day stays among patients hospitalized for hip fractures and patients with dementia.”
The study concluded: “This study provides rigorous empirical evidence that the 3-day rule may not serve its intended function of screening unnecessary post-acute SNF use and instead results in additional inpatient days that burden hospitals, clinical practice, and potentially patients. … Reinstating Medicare’s 3-day hospitalization requirement was associated with longer inpatient stays without decreases in SNF utilization or improvements in short-term health outcomes. These findings suggest that the policy imposes additional costs on hospitals while failing to lower Medicare spending on hospitalized patients. More generally, results raise questions regarding the value and continued relevance of a broadly applicable 3-day inpatient stay rule in the traditional Medicare program.”
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