Study finds outdated Medicare rule delays nursing care, wastes hospital resources

(Press-News.org) PROVIDENCE, R.I. [Brown University] — A long-standing Medicare policy meant to manage rehabilitation services in nursing homes may keep older Americans in hospitals longer than necessary without improving patient health or saving Medicare money, new research finds.

Established in 1965, the rule was intended to manage the use of skilled nursing facilities, which provide short-term medical and rehabilitative care to Medicare beneficiaries. Known as the “three-day rule,” it requires patients to spend at least three consecutive days in the hospital before Medicare will cover care in a nursing facility. Skilled nursing facilities are used as a post-hospital benefit by one in five Medicare beneficiaries after hospitalization, and Medicare pays an average of about $15,000 for each stay.

“When the policy was created, typical hospital stays were close to two weeks, and requiring three inpatient days may have helped ensure appropriate use of post-acute care,” said study co-author Dr. Amal Trivedi, a professor of health services, policy and practice and of medicine at Brown University. “Today, hospital stays are far shorter, and hospitals can quickly assess patients’ need for skilled nursing care. In that context, it has been difficult to justify a rigid three-day threshold.”

From March 2020 to May 2023, the rule was suspended in response to the COVID-19 public health emergency. The pause gave researchers from Brown’s School of Public Health a rare opportunity to investigate the clinical and economic impacts of the policy.

The analysis published in JAMA Internal Medicine looked at more than 600,000 hospital stays involving traditional Medicare patients in 2023. The findings led the researchers to question whether it may be time to reconsider if the three-day requirement still makes sense in modern clinical practice.

“We found that the rule does not reduce skilled nursing care use among patients who are admitted to the hospital, as was its original purpose, but instead led to longer hospital stays to meet requirement for coverage,” said lead study author Zihan Chen, a Brown doctoral student in health services research.

As soon as the rule was reinstated, for instance, the proportion of hospital stays lasting at least three days among all traditional Medicare patients admitted to hospitals increased by more than 1%. For those who later went to nursing-home rehab, the increase was more than 5%. Within the first month alone, the reinstatement of the rule resulted in at least 2,000 additional hospital days, according to the study.

“Together, this strongly suggests that the policy itself — rather than changes in patient health or clinical need — drove the longer hospital stays,” Trivedi said.

The longer hospital stays didn’t lead to better health outcomes for patients, according to the study. In fact, extra days in the hospital often increase the risk of other complications, like infections or functional decline, and they keep hospital beds that could be used for other patients occupied, the researchers noted.

Death rates in the 30 days after discharge didn’t change after the rule was brought back; nor did a patients’ ability to avoid another hospital stay within that same time. And patients didn’t spend fewer days in nursing homes because of the increased hospital time, said Cyrus Kosar, a co-author on the study and assistant professor of health services, policy and practice at Brown.

“There were no changes to discharge rates or days of care, which indicates that the three-day rule does not generate observable savings for Medicare and instead passes costs to hospitals,” Kosar said.

The researchers noted that Congress has repeatedly sought to repeal the rule, but each attempt has stalled amid concerns it acts as a filter for the use of skilled nursing facilities and fears that removing it would significantly increase Medicare spending. Past efforts to remove or relax the rule indeed led to sharp increases in Medicare-covered skilled nursing use.

“These factors have made policymakers cautious about any reform,” Chen said.

They are also among the reasons the research team plans to continue examining the rule and exploring whether there are opportunities for change.

“Rigorous evaluation helps us understand what these long-standing policies are actually doing today — how they shape care delivery, patient experiences and system efficiency — so they can be updated to better serve patients while using public resources wisely,” Chen said.

 The study was funded by the National Institute on Aging (P01AG027296 and R01AG089051).

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