MedPAC chairman: Three-day stay requirement is 'archaic'

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The government should pay for skilled nursing care without a preliminary three-day hospital stay, and the recovery auditor program should be reformed, Medicare Payment Advisory Commission members said at a meeting Friday.

MedPAC Chairman Glenn Hackbarth said the “three-day rule” for SNF coverage is “archaic,” according to Bloomberg BNA.* The rule states that a beneficiary only receives Medicare coverage for skilled nursing after spending three midnights as a hospital inpatient. Long-term care providers and other stakeholders have said the requirement is a holdover from Medicare's earliest days, and it does not account for the more sophisticated care now offered by skilled nursing facilities. Legislation to eliminate the rule is under consideration. Supporters of the rule say that it helps contain costs.

Hackbarth made his comments during a meeting on short hospital stays. Recovery Audit Contractors increasingly have challenged hospitals' inpatient classifications, saying that short-stay patients should have been classified as outpatients and reimbursed at a lower level. As a result, a huge Medicare appeals backlog has developed. Hospitals also have been placing a growing number of patients in observation status rather than admitting them as inpatients. These people often do not qualify for subsequent SNF care under the current three-day rule.

In addition to changing that rule, the RAC program should be reformed so that audits are “better targeted,” Hackbarth said.

Saying there are “misperceptions” about the RAC program, the association representing auditors issued a statement regarding the commissioners' comments.

“RACs review no more than 2% of Medicare claims from any given provider, yet have returned nearly $9 billion in provider over billings to the Medicare Trust Fund,” said Kristin Walter, spokeswoman for the American Coalition for Healthcare Claims Integrity.

Prior to the meeting, Hackbarth announced he will leave MedPAC in 2015. He joined the Congressional advisory group in 2000 and became chairman the next year.

*Editor's Note: A previous version of this article referred to this news source as the Bureau of National Affairs. It has not gone by this name since 2011.