CMS Pub. 100-02, ch. 8, § 20.1

In accordance with section 226(c)(1)(B) of the Social Security Act and the implementing

regulations at 42 CFR 409.30(a)(2), the hospital discharge must have occurred on or after

the first day of the month in which the individual attained age 65 or, effective July 1,

1973, became entitled to health insurance benefits under the disability or chronic renal

disease provisions of the law. The 3 consecutive calendar day stay requirement can be

met by stays totaling 3 consecutive days in one or more hospitals. In determining

whether the requirement has been met, the day of admission, but not the day of discharge,

is counted as a hospital inpatient day.

Time spent in observation or in the emergency room prior to (or in lieu of) an inpatient

admission to the hospital does not count toward the 3-day qualifying inpatient hospital

stay, as a person who appears at a hospital’s emergency room seeking examination or

treatment or is placed on observation has not been admitted to the hospital as an

inpatient; instead, the person receives outpatient services. For purposes of the SNF

benefit’s qualifying hospital stay requirement, inpatient status commences with the

calendar day of hospital admission. See 31 Fed. Reg. 10116, 10118-19 (July 27, 1966).

To be covered, the extended care services must have been for the treatment of a condition

for which the beneficiary was receiving inpatient hospital services (including services of

an emergency hospital) or a condition which arose while in the SNF for treatment of a

condition for which the beneficiary was previously hospitalized. In this context, the

applicable hospital condition need not have been the principal diagnosis that actually

precipitated the beneficiary’s admission to the hospital, but could be any one of the

conditions present during the qualifying hospital stay.

In addition, the qualifying hospital stay must have been medically necessary. Medical

necessity will generally be presumed to exist. When the facts that come to the A/B

MACs (A) attention during the course of its normal claims review process indicate that

the hospitalization may not have been medically necessary, it will fully develop the case,

checking with the attending physician and the hospital, as appropriate. The A/B MAC

will rule the stay unnecessary only when hospitalization for 3 days represents a

substantial departure from normal medical practice. However, in accordance with Pub.

100-04, Medicare Claims Processing Manual, Chapter 30, §130.2.A, when a beneficiary

qualifies for limitation on liability in connection with the hospital stay (or a portion

thereof), this conclusively establishes that the hospital stay (or portion thereof) was not

medically necessary.

Even if a beneficiary’s care during a qualifying hospital stay becomes less intensive

during the latter part of the stay, the date of hospital “discharge” in this context is still

considered to be the day that the beneficiary physically leaves the hospital, and the level

of care being furnished at that particular point is not a determining factor as long as some

portion of the stay included at least 3 consecutive days of medically necessary inpatient

hospital services. In addition, when a hospital inpatient’s care needs drop from acute- to

SNF-level but no SNF bed is available, the regulations at 42 CFR 424.13(c) permit a

physician to certify that the beneficiary’s continued inpatient stay in the hospital is, in

fact, medically necessary under this particular set of circumstances (see also Pub. 100-01,

Medicare General Information, Eligibility, and Entitlement Manual, Chapter 4, §10.6).

Accordingly, such additional, “alternate placement” days spent in the hospital can be

included in the 3-day count toward meeting the SNF benefit’s qualifying hospital stay

requirement.

The 3-day hospital stay need not be in a hospital with which the SNF has a transfer

agreement (see Pub. 100-01, Medicare General Information, Eligibility, and Entitlement

Manual, Chapter 5, §30.2 for a discussion of the SNF’s required transfer agreement with

a hospital). However, the hospital must be either a Medicare-participating hospital or an

institution that meets at least the conditions of participation for an emergency services

hospital (see Pub. 100-01, Medicare General Information, Eligibility, and Entitlement

Manual, Chapter 5, §20.2, for the definition of an emergency services hospital). A

nonparticipating psychiatric hospital need not meet the special requirements applicable to

psychiatric hospitals (see Pub. 100-01, Medicare General Information, Eligibility, and

Entitlement Manual, Chapter 5, §20.3). Stays in Religious Nonmedical Health Care

Institutions (see Pub. 100-01, Medicare General Information, Eligibility, and Entitlement

Manual, Chapter 5, §40, for definition of RNHCIs) are excluded for the purpose of

satisfying the 3-day period of hospitalization. See Pub. 100-02, Medicare Benefit Policy

Manual, Chapter 9, §40.1.5, regarding a qualifying stay that consists of “general inpatient

care” furnished in a hospital under the hospice benefit.

NOTE: While a 3-day stay in a psychiatric hospital satisfies the prior hospital stay

requirement, institutions that primarily provide psychiatric treatment cannot participate in

the program as SNFs. Therefore, a patient with only a psychiatric condition who is

transferred from a psychiatric hospital to a participating SNF is likely to receive only

non-covered care. In the SNF setting, the term “non-covered care” refers to any level of

care less intensive than the SNF level of care that is covered under the program. (See

§§30ff.).