Creator: Patrick Connole
SNF Sector Backs ‘Observation Status’ Legislation
AHCA supports legislation to ensure that time spent under “observation status” in a hospital counts toward satisfying the three-day inpatient hospital requirement for coverage of skilled nursing care services under Medicare.
The nursing home sector has come out for a reintroduced piece of legislation to ensure that time spent under “observation status” in a hospital counts toward satisfying the three-day inpatient hospital requirement for coverage of skilled nursing care services under Medicare.
The American Health Care Association (AHCA) applauded Sens. Susan Collins (R-Maine) and Peter Welch (D-Vt.) for reintroducing the “Improving Access to Medicare Coverage Act” with AHCA President and CEO Clif Porter declaring, “Medicare beneficiaries deserve clear, fair access to post-acute care services.”
“For too long, observation stays have created confusion and barriers for seniors who require post-acute care following a hospital stay. We’re grateful to Senators Collins and Welch for reintroducing this important legislation and supporting the rights of seniors to access the care they need and deserve,” he said.
Policies Now
Under current Medicare policy, a beneficiary must have an inpatient hospital stay of at least three days before Medicare will cover post-hospitalization skilled nursing care. Patients who receive hospital care under “observation status” do not qualify for this benefit, even if their hospital stay lasts longer than three days.
Sen. Collins said specifically, the bill would change this policy by:
Amending Medicare law to count a beneficiary’s time spent in the hospital under “observation status” toward the three-day hospital stay requirement for skilled nursing care; and
Establishing a 90-day appeal period for individuals who had a qualifying hospital stay and were denied Medicare coverage for skilled nursing care before enactment but after Jan. 1, 2026.
AHCA Supports
AHCA said for years it has voiced concern over the three-day stay requirement and continues to support a full repeal of the requirement, noting that it is an arbitrary timeline established decades ago that no longer reflects modern care delivery.
A 2026 study study on observation stays demonstrated that the rule offers no improved health outcomes for patients, directly contradicting an original rationale for the requirement, AHCA said.
Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.
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