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May 26, 2020

The Continued Conundrum of Discharge to a Skilled Nursing Facility After a Medicare Observation Stay

Author Affiliations
  • 1The George Washington University School of Medicine, Washington, DC
  • 2Northwestern University, Evanston, Illinois
  • 3University of North Carolina Kenan-Flagler School of Business, Chapel Hill, North Carolina
JAMA Health Forum. 2020;1(5):e200577. doi:10.1001/jamahealthforum.2020.0577

Medicare observation status has remained controversial since its introduction as an administrative payment category dating back to at least 1983. Much of the debate revolves around beneficiary billing and the 3-day rule, which requires that beneficiaries spend 3 consecutive days as an inpatient in order to receive coverage for postacute skilled nursing facility (SNF) care. Evolving with our health care system and recent legal challenges, this policy challenge has only been magnified by the COVID-19 pandemic. We briefly review the history of Medicare observation stays, recent policy changes, and legal challenges and propose that Congress permanently amend the 3-day rule to include observation stays.

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