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New Rhode Island Skilled Nursing Medicare Rates and Ruling on Hospital Observation Days

September 13, 2013

Medicare Rate – October 1, 2013Click on this link to receive your Rhode Island Medicare rates effective October 1, 2013.  We derived these rates using the Final Rule as published by the Federal Register for the Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2014.  For your convenience and planning purposes, we have calculated the portion of your Medicare rate that represents the therapy component from the total Medicare rate by RUG category.  In addition to the gross Medicare rates by RUG category, we have also provided the Medicare rates net of the sequestration reduction for Medicare days 1 through 20 and the Medicare rate net of the sequestration reduction for Medicare days 21 through 100.

CMS Issues Two Midnight Rules for Hospital Admissions – Direct Impact on Observation Days

In August, CMS published a final rule on hospital inpatient admissions (among other items), providing clarity on how payments will be provided for inpatient status.  This final rule addresses hospital admission procedures but has a direct impact on the required three-day hospital stay as a qualifying event for Medicare payment at a skilled nursing facility. It has been brought to light that many potential Medicare beneficiaries had been spending time under “observation stay” status as opposed to “inpatient” status, which does not count as part of the three-day threshold required to have skilled nursing services covered. These changes will be applicable to hospital discharges that occur on or after October 1, 2013.

The final rule specifies that the timeframe used in determining the expectation of a stay exceeding two midnights begins when the beneficiary starts receiving services in the hospital. This includes outpatient observation services or services in an emergency department, operating room or other treatment area. Effective October 1, 2013, observation days have been limited, and if the physician expects service to cross two midnights, then Medicare Part A coverage is appropriate.  As a result, these two days would count towards the three-day minimum hospital stay required for Medicare Part A payment for the skilled nursing facility resident admitted from the hospital and requiring skilled services.

If you have questions, please contact Monica Motta at or (401) 272-5600 x114.


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