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Here’s an example of such a case-one that should raise a red flag for hospitals, because it likely will for RACs.

An 82-year-old male with multiple co-morbid conditions presents to the emergency department (ED) reporting several weeks of increasing shortness of breath and nausea, but no emesis for several days. Vital signs are stable, lab work results are normal, and diagnostic findings are unremarkable. The patient’s wife is fragile and in poor health, but she is his caretaker and is seeking assistance; she says that because her husband is not ambulating safely, she is ready to place him in a nursing home.

Social Admissions

The scenario of progressive functional decline with increasing weakness and poor mobility does not support medical necessity for an acute-care admission. The predicament is that this couple clearly is struggling since they are both declining functionally and can no longer stay independent in their community. This would be considered a social admission if the husband was hospitalized. Some, then, would assume that a three-day hospital stay would qualify him to access his SNF benefits under Medicare – or would they?

Social admissions or keeping a patient who does not meet medical necessity standards in the hospital for the purpose of meeting the three-day rule may be considered fraudulent, and is a serious matter. Acute-care settings are intended to provide acute-care services and are not to be used to help declining individuals meet criteria to qualify for extended-care benefits.

Providers need to identify trends that are placing them at risk with the regulatory requirement of SNF three-day hospitalization.


Know the Policies

The medical staff and utilization review (UR), case management and discharge planning staff members need to be fully informed of the regulatory policy and Medicare benefit for post-hospitalization SNF placement. The three-day qualifying inpatient hospital stay, if not appropriately followed with documentation of medical necessity, will put a provider at risk for recoupment under the RACs.


The instructions in the Medicare Benefit Policy Manual, Chapter 8, Coverage of Extended Care (SNF) Services2, Section 20.1 covers the details, but in summary here is what you need to know:


The patient must have been an inpatient of a hospital for a medically necessary stay of at least three consecutive calendar days, not including date of discharge or any observation days. 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 qualifying three-day inpatient hospital stay.


  • The individual must have been transferred to a participating SNF within 30 days after discharge from the hospital, unless the exception in §20.2 applies (further explained below).


  • The consecutive calendar day stay requirement can be met by stays totaling at least three consecutive days in one or more hospitals.


  • To be covered, the extended-care services must have been rendered for the treatment of a condition for which the beneficiary was receiving inpatient hospital services (including services of an emergency hospital), or a condition that arose while in the SNF for treatment of a condition for which the beneficiary previously was hospitalized.


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


The predicament for the healthcare provider is this: how do you advocate on behalf of this elderly population in decline? Such patients present to the hospital with functional decline yet are not sick enough for acute-care services; they are searching for assistance to address their personal care. Physicians who are confronted with these social issues will need resources, and developing a front-end process will assist to keep a hospital in compliance.


Perform Front-End Review to Avoid Risk

To decrease your risk of noncompliance, MedLearn consultants recommend a front-end review of operations and processes, starting with the ED. Ask these questions:


  • What education have admitting physicians received about medical necessity, admission criteria and use of observation services?
  • Does the ED have access to a care coordinator or case manager to assist with obtaining home-care services or placement from the ED?
  • Has your social work or case management department developed community resources to assist the elderly population needing immediate assistance?

As a care provider, it is important to understand federal guidelines and develop strategies to provide services for this patient population while remaining compliant.

MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, charge-master, reimbursement management and RAC solutions.


About the Author

Barbara Vandegrift, RN, BSN, MA, is a senior healthcare consultant with Medical Learning, Inc. (MedLearn), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.


Contact the Author


1.The Medicare Recovery Audit Contractor Program: An Evaluation of the 3-Year Demonstration. 2008

2.For this resource, go to http://www.cms.hhs.gov/manuals/Downloads/bp102c08.pdf.


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