Medicare will only cover care in a skilled nursing facility (SNF) after a qualifying hospital stay—an inpatient hospital stay of at least 3 days in a row. Most Medicare Advantage plans waive this requirement, but it remains a barrier to SNF coverage for those enrolled in traditional Medicare.
Determining whether someone’s hospital stay is “qualifying” can be a point of confusion. It is not as simple as counting the days given the possibility of time spent on observation status. If the hospital bills a day to Medicare as outpatient, i.e., observation, it does not count toward a qualifying hospital stay. Beneficiaries at hospitals should always inquire about their status for this reason.
However, even if beneficiaries inquire about their status, they may be provided with false information. For example, CMA recently assisted a beneficiary who was at a hospital from Wednesday to Saturday. Her team at the hospital told her she would qualify for SNF coverage based on the length of her stay. It turns out, the hospital billed the first day to Medicare as outpatient, resulting in a lack of a qualifying hospital stay.
Generally, when a beneficiary arrives at a SNF from a hospital without a qualifying hospital stay, Medicare “strongly encourage[s]” the SNF to issue an Advance Beneficiary Notice of Non-Coverage (ABN). Medicare Claims Processing Manual, Chapter 30, § 50.2.1. An ABN is a standard notice designed to inform beneficiaries they are about to receive an uncovered service. Here, no ABN was issued to the beneficiary.
Sometimes Medicare will waive a beneficiary’s liability for a service or item if a provider fails to issue an ABN. This remedy is not available to beneficiaries who receive SNF services without a qualifying hospital stay. Medicare Claims Processing Manual, Chapter 30, § 70.3. While Medicare “strongly encourage[s]” the issuance of an ABN in this circumstance, it does not require it. Despite this, beneficiaries should not necessarily accept liability for a stay they were told would be covered.
In the case of the beneficiary with the Wednesday to Saturday hospital stay, the SNF not only failed to issue an ABN, but they also told the beneficiary not to worry about the cost of her stay due to her insurance. In situations like this, when beneficiaries are overpromised coverage and induced into longer stays, consumer protection laws may apply. This beneficiary cited the Connecticut Unfair Trade Practices Act (CUTPA) in a letter to the SNF, which states generally: “No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Connecticut General Statutes § 42-110b(a). Consumers impacted by violations are entitled to bring an action in Superior Court seeking damages, including punitive damages and attorneys’ fees. The SNF agreed to waive the bill.
Remember: SNF residents are consumers. Medicare SNF coverage criteria can be confusing, but that is not reason for beneficiaries to be provided with false information, leading to surprise bills. SNF residents, like all consumers, should be provided with the information they need to make informed decisions on significant financial decisions. CMA encourages beneficiaries and their advocates to consider relevant consumer protection laws and to contact their state consumer protection offices with these types of issues.
As discussed in a previous alert, the Nursing Home Reform Act and general contract law may also be points of advocacy in addition to consumer protection laws.
May 14, 2026 – E. Krupa