Print Friendly, PDF & Email
  1. Observation Status Deprives Medicare Beneficiaries of their Skilled Nursing Facility Benefit. Period.
  2. Nursing Home Requirements of Participation: Will the Administration Overturn 2016 Rules for Infection Control?
  3. New Fact Sheet Available – Medicare Inpatient Rehabilitation Hospital/Facility Coverage In Light of Jimmo v. Sebelius

Join Us!

6th Annual National Voices of Medicare Summit &
Sen. Jay Rockefeller Lecture

Rep. John Lewis will deliver this year’s Sen. Jay Rockefeller Lecture

Also joining us: Sen. Jay Rockefeller; Rep. Joe Courtney; Rep. Rosa DeLauro; Judy Feder of Georgetown University; Tricia Neuman, Senior VP, Kaiser Family Foundation; Henry Claypool, Technology Policy Consultant at AAPD and Former Director of the HHS Office on Disability; Cathy Hurwit, Former Chief of Staff for Rep. Jan Schakowsky; film writer Anna Reid-JhiradBen Belton, AARP Global Partner Engagement Director; and a direct-care worker from SEIU._______________


May 9, 2019
8:30 AM – 3:30 PM


Kaiser Family Foundation
1330 G. Street, NW
Washington, DC



Observation Status Deprives Medicare Beneficiaries of their Skilled Nursing Facility Benefit. Period.

The facts are in: The ever-increasing use of observation status deprives many Medicare beneficiaries of care and coverage in skilled nursing facilities (SNFs). 

In 2018, research by Avalere Health confirmed that the use of SNFs by beneficiaries in the traditional Medicare program declined each year between 2009 and 2016. Avalere identified the cause as “fewer hospital inpatient admissions and more frequent observation stays.”[1] In 2009, there were, per capita, 1,808 SNF days per 1,000 beneficiaries; in 2016, per capita SNF days declined to 1,539 days per 1,000 beneficiaries.[2] Avalere data showed that the 17% decline in per capita hospital discharges occurred while observation stays dramatically increased.[3]

Last month, the Medicare Payment Advisory Commission (MedPAC) confirmed these findings.  Its March 2019 Report to the Congress: Medicare Payment Policy documents, “From 2012 through 2017, the volume of observation care increased spending by 19.7 percent.”[4] Between 2007 and 2017, inpatient discharges declined by 20.4% while outpatient visits per beneficiary increased by 43.5%.[5]

These reports document that large and increasing numbers of beneficiaries in traditional Medicare are classified as outpatients in observation when they are receiving medically necessary care in the hospital. However, Medicare Part A does not cover beneficiaries’ stays in SNFs unless the beneficiaries have had a three-day qualifying inpatient hospital stay.[6] These reports by Avalere and MedPAC document that fewer beneficiaries are receiving post-hospital care in SNFs.

For many years, the Center for Medicare Advocacy has heard from beneficiaries across the country who were in the hospital for three or more midnights, but who did not qualify for Part A coverage of their SNF stays because some or all of their midnights in the hospital were classified as outpatient observation.

The Improving Access to Medicare Coverage Act, H.R. 1682/S. 735, which counts all the time in the hospital for purposes of satisfying the three-day inpatient requirement, would help many Medicare beneficiaries get Medicare Part A coverage for their SNF stays.

[1] Avalere Health, “Medicare Patients Are Using Fewer Skilled Nursing Services,” p.1 (Mar. 15, 2018),
[2] Id., Figure 1, “Per Capita SNF Days Have Decreased Every Year Since 2009.”
[3] Id. 2, Figure 2, “Frequency of Hospital Admissions Has Fallen, in Part Due to Increases in Observation Stays.”
[4] Medicare Payment Advisory Commission (MedPAC), Report to the Congress: Medicare Payment Policy, 74-75 (Mar. 2019).  During the six-year period, total spending for observation care under OPPS [outpatient prospective payment system] rose 263 percent, largely attributable to the inclusion, in 2016, of certain ancillary services in the payment rate for observation status. Id. 74.
[5] Id. 73, 72, Figure 3-2.
[6] 42 C.F.R. §409.30(a)(1).




Nursing Home Requirements of Participation: Will the Administration Overturn 2016 Rules for Infection Control?

The Trump Administration solicited ideas for cutting nursing home standards of care[1] and has announced plans to publish new Requirements of Participation in order to reduce the burden on nursing facilities.[2] In October 2016, the Obama Administration revised these Requirements, which establish the standards of care for nursing facilities that receive public reimbursement from the Medicare program, the Medicaid program, or both programs.[3] What’s up for cuts?

Many of the Obama Administration’s 2016 final rules restated verbatim standards of care that had been in effect for more than 25 years.[4] As a result of their continuation of long-standing standards, most of the Requirements went into effect in November 2016. Some of the rules incorporated new statutory requirements, such as compliance and ethics committees,[5] or updated and modernized federal standards of care, for example, using the term “behavioral health services.”[6] But some of the requirements were new, reflecting efforts to address serious care problems that the prior rules had not effectively prevented.

A key example is infection control. The preamble to the final 2016 rules reports that each year, 1.6 to 3.8 million health care associated infections occur in nursing facilities. These infections lead, each year, to an estimated 150,000 hospitalizations and 388,000 deaths, at a cost of $673 million to $2 billion.[7] Kaiser Health News reported in 2017 that its analysis of four years of federal survey data found that 74% of facilities nationwide received an infection control deficiency, but that most of these deficiencies were cited at a low level of severity,[8] making enforcement unlikely.

Clearly, infections have been causing great harm to residents and costing a lot of money. Long-standing federal Requirements addressing infection control[9] (and, as found by Kaiser Health News, the limited enforcement of these Requirements) have not prevented these poor outcomes.

Among other changes, the 2016 rules took a strong stand on infections. Citing the poor resident outcomes and high costs of infections described above, the Centers for Medicare & Medicaid Services (CMS) defended the need for detailed standards in the preamble to the Requirements and explicitly rejected public comment to allow facilities greater flexibility.[10] CMS created a new position called infection preventionist (IP),[11] a staff person who is assigned responsibility for a facility’s implementation of a broadly defined “infection prevention and control program” (IPCP).  The 2016 rules require that the staff person be qualified by education, training, experience, or certification[12] to implement IPCP and also have completed specialized training in infection prevention and control.[13]  CMS and the Centers for Disease Control and Prevention (CDC) recently made available a “Nursing Home Infection Preventionist Training Program,”[14] which they jointly developed, to enable IPs to get the specialized training they need to oversee their facilities’ IPCP.

Despite the history of serious infections in nursing homes, representatives of the nursing home industry continue to call for greater flexibility in the rules to address infections.[15]  

Will the Administration listen to the nursing home industry and dilute or eliminate new standards of care that, if effectively implemented and enforced, could reduce residents’ infections and hospitalizations, save residents’ lives, and save Medicare billions of dollars?  We’ll find out the answer when the Administration publishes the proposed rules.

  • For more information on the nursing home regulations and their impact on patient advocacy, see the recent Consumer Voice webinar Making it Real: Using the Revised Federal Nursing Home Regulations in Your Advocacy featuring the Center for Medicare Advocacy’s Senior Policy Attorney Toby Edelman and experts from Consumer Voice and Justice in Aging discussing how to address common problems and promote quality person-centered care and residents' rights by using the revised federal nursing home regulations. Topics covered include: admission; care planning, including baseline care plans; visitation; rehab services; transfer/discharge; return to the facility; and facility assessment.

[1] CMS, “Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2018, SNF Value-Based Purchasing Program, SNF Quality Reporting Program, Survey Team Composition, and Proposal to Correct the Performance Period for the NHSN HCP Influenza Vaccination Immunization Reporting Measure in the ESRD QIP for FY 2020,” 82 Fed. Reg. 21014, 21089 (May 4, 2017) (CMS wrote that it is “currently reviewing the LTC requirements to balance the need to maintain quality of care while reducing procedural burdens on facilities” and identified the grievance procedure, Quality Assurance and Performance Improvement, and discharge notices).
[2] Office of Information and Regulatory Affairs, Office of Management and Budget, “Requirements for Long-Term Care Facilities: Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction (CMS-3347-P), (anticipated date of publication of proposed rules was June 2018). 
[3] 81 Fed. Reg. 68688 (Oct. 4, 2016).
[4] 56 Fed. Reg. 48825 (Sep. 26, 1991).
[5] Affordable Care Act, §6102; 42 C.F.R. §483.85.
[6] 42 C.F.R. §483.40.
[7] 81 Fed. Reg. 68688, 68808 (Oct. 4, 2016).
[8] Jordan Rau, Kaiser Health News, ‘Infection lapses are rampant in nursing homes but punishment is rare,” Los Angeles Times (Dec. 21, 2017),
[9] The earlier requirement was for facilities to have an “infection control program,” formerly at 42 C.F.R. §483.65.
[10] 81 Fed. Reg. 68688, 68808-68809 (Oct. 4, 2016).
[11] 42 C.F.R. §483.80(b).
[12] 42 C.F.R. §483.80(b)(2).
[13] 42 C.F.R. §483.80(b)(4).
[14] CMS, “Specialized Infection Prevention and Control Training for Nursing Home Staff in the Long-Term Care Setting is Now Available,” QSO-19-10-NH (Mar. 11, 2019),
[15] See comment letter from LeadingAge, pp. 25-27 (Jun. 26, 2017) to the proposed rules cited in footnote 1, supra,




New Fact Sheet Available – Medicare Inpatient Rehabilitation Hospital/Facility Coverage In Light of Jimmo v. Sebelius

With support from the John A. Hartford Foundation, the Center for Medicare Advocacy has produced a new Fact Sheet to help Medicare beneficiaries and their families respond to unfair Medicare denials for care at inpatient rehabilitation hospitals/facilities (IRH/F). The Fact Sheet outlines the coverage criteria for IRH/Fs and emphasizes language from the Jimmo Settlement Agreement. Per the Settlement, the Centers for Medicare & Medicaid Services (CMS) revised the Medicare Benefit Policy Manual to clearly state that Medicare does not require an individual receiving IRH/F services to achieve complete independence in self-care or return to a prior level of functioning. Medicare is available to achieve improvement of practical value to the individual or to adapt to one's disability.


The Center for Medicare Advocacy is a non-profit organization.
Your contributions to the Center are essential to maintaining our ability to advance access
to comprehensive Medicare coverage and quality health care.

Comments are closed.