Nursing Home Medicare Coverage – Skilled vs. Custodial

Obtaining reimbursement from Medicare or third party payor insurance companies has become increasingly complex, especially in today’s healthcare environment following changes in how health care providers and facilities bill for services. Hospitals now discharge patients at a faster rate, often referring them to nursing homes or long-term care and rehabilitation facilities for aftercare services.

Costs for skilled nursing facilities or nursing homes are covered only when skilled nursing rehabilitation or care occurs within 30 days of a three-day long or longer hospitalization and is deemed medically necessary. Medicare Part A does not cover skilled nursing facility care if the patient does not require such services and only requires custodial care.

What’s the difference between skilled rehabilitation and custodial care? Medicare does not cover or reimburse for custodial care when it’s the only kind of care required by a patient or resident. Custodial care is defined as care offered to a patient or resident that does not involve or require skilled nursing services. Help with bathing, dressing, toileting, and other activities of daily living that don’t require specific and licensed medical skills are classified as custodial care.

Skilled nursing care can involve medical treatments and procedures (catheter care, Nebulizer treatments, breathing apparatus, etc.), medication oversight, wound care, physical therapy and other services where a patient or resident requires continued medical care on an inpatient basis. Skilled rehabilitation is deemed medically necessary to provide maintenance or improvement of health to a patient or resident. Skilled rehabilitation services must be supervised or delivered by licensed professional or technical medical personnel in order to achieve a specific medical outcome.

When factoring in reimbursement, be aware that Medicare Part A generally kicks in during the first 20 days, with 100% of the amounts approved. The longer you stay in a skilled nursing facility, the less Medicare eventually pays out. For example, the 2015 figures for reimbursement claims specify that between days 21 and 100, a patient’s coinsurance will pay $157.50 per day for each benefit period. After day 100, the patient is responsible for all costs.