HR 3954119th CongressIn Committee

Improving Access to Medicare Coverage Act of 2025

Introduced: Jun 12, 2025

Healthcare

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Improving Access to Medicare Coverage Act of 2025 would change how Medicare counts days toward the requirement that a patient have a 3-day inpatient hospital stay to qualify for Medicare coverage of a skilled nursing facility (SNF) stay. Specifically, during any period when a patient is receiving outpatient observation services in a hospital, this bill would deem that period to be inpatient for purposes of meeting the 3-day inpatient stay rule. The end of the observation period would be treated as the hospital discharge date, unless the patient is admitted as an inpatient at the end of the observation period. The measure takes effect for observation beginning on or after January 1, 2026, with a transitional provision allowing limited retroactive application to certain post-hospital extended care services if an administrative appeal was filed within 90 days of enactment. The Department of Health and Human Services could implement the change through interim final regulations or other guidance. In short, the bill aims to make Medicare SNF coverage easier to obtain for patients who spend time in hospital observation status by counting those observation days as inpatient days toward the 3-day requirement.

Key Points

1Counts observation days as inpatient days: When a patient is in hospital outpatient observation, those days would be treated as inpatient days for the 3-day inpatient stay criterion needed to qualify for SNF coverage under Medicare.
2Discharge date defined: The end of the observation period is considered the hospital discharge date, unless the patient is admitted as an inpatient at the end of the observation period.
3Effective date and transitional rules: The counting change applies to observation starting on or after January 1, 2026. There is a transitional provision for pre-enactment post-hospital extended care services if an administrative appeal was filed within 90 days after enactment.
4Admin/Regulatory path: The Secretary of Health and Human Services may implement the amendment via interim final regulations, program instructions, or similar mechanisms.
5Scope and referrals: The bill is introduced in the House as H.R. 3954 and would amend title XVIII of the Social Security Act (Medicare) to effect this change.

Impact Areas

Primary group/area affected- Medicare beneficiaries who undergo hospital observation and may subsequently need skilled nursing facility care; particularly people who would otherwise be ineligible for SNF coverage due to not meeting the 3-day inpatient requirement.Secondary group/area affected- Hospitals and health systems that use observation status to manage patient flow, as this change could alter how observation days count toward Medicare coverage rules and potentially affect discharge planning and billing practices.Additional impacts- Medicare program administration: CMS would need to adjust claims processing rules and beneficiary eligibility determinations to recognize observation days as inpatient days for SNF coverage.- Financial implications: Could shift Medicare costs by increasing SNF coverage eligibility for some patients, while potentially affecting hospital revenue streams linked to observation status.- Patient financial protection: May reduce or eliminate out-of-pocket costs tied to SNF coverage gaps for individuals who previously failed the 3-day inpatient requirement due to exclusive reliance on observation status.

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