Medicare panel: Ease rules on rehab coverage for seniors after hospital 'observation' stays

Lifestyle and Budget Associated Press

A panel that advises Congress on Medicare policy says the government should make it easier for seniors to get covered for rehab after a short hospital stay.

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MedPAC said in a report Monday that Congress should revamp a rule that says to qualify for rehabilitation at a nursing facility, beneficiaries first must be hospitalized for three days as inpatients.

The panel recommended that Medicare count up to two hospital "observation days" toward the three-day requirement.

Hospitals routinely admit patients for observation, but that has Medicare billing implications. It can mean higher out of pocket costs for certain services.

Hospitals should be required to clearly explain the billing consequences to patients, MedPAC said. Another recommendation would reduce medication costs for patients on observation.

Medicare is reviewing its policy on observation stays.