Medicare's three-day rule may lead to longer-than-needed hospital stays

Medicare's rule that says patients must stay in the hospital for three days before it will cover their care in a skilled nursing facility (SNF) may not be helping patients, a new study finds, and in fact may be costing Medicare plans money.

For the study, published in the August issue of Health Affairs, researchers set out to assess the effects of the requirement by comparing hospital and SNF utilization among Medicare Advantage (MA) enrollees whose plans either did or did not eliminate the requirement between 2006 and 2010. MA plans are unique in that they have the flexibility to either keep or waive the rule, the study notes.

Researchers found the average hospital length of stay decreased for patients whose plans eliminated the rule, while it increased for those that still applied the rule. The elimination of the rule was not associated with a greater rate of hospital or SNF admissions or with longer stays in a SNF.

"These trends raise the possibility that the three-day stay policy may both inappropriately lengthen acute hospital stays for patients who could be transferred to skilled nursing facilities earlier and, as a result, increase spending on avoidable hospital care and increase patients' exposure to iatrogenic (medical-treatment-related) complications," the study authors write.

Indeed, "there really aren't many benefits to staying (in the hospital) beyond medical necessity," David Grabowski, a health policy researcher at Harvard Medical School in Boston, told Reuters.

The rule has been in effect for nearly 50 years, the study notes, and it combined with Medicare's payment rules regarding observation status have been under mounting scrutiny. The two policies are intertwined because seniors who are transferred to an SNF before spending three days in the hospital won't qualify for Medicare reimbursement for their SNF stay because a hospital stay under observation doesn't count toward the three-day threshold, FierceHealthFinance has reported.

The Centers for Medicare & Medicaid Services has attempted to address the concerns through a final rule governing its Medicare Shared Savings Program accountable care organizations (ACOs). The rule allows Track 3 ACO participants to apply for a waiver for the three-day SNF rule.

The government should thus take the opportunity to evaluate "whether the elimination of the three-day stay policy in ACOs produces results similar to those observed among Medicare Advantage plans," the study's authors suggest.

To learn more:
- check out the study (subscription required)
- read the Reuters article

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