Confused About Billing and the 3-Day Rule? CMS Has a Resource for You

Mary Madison, RN, RAC-CT, CDP
Clinical Consultant – Briggs Healthcare

CMS updated the MLN Fact Sheet: Skilled Nursing Facility 3-Day Rule Billing to help providers and billers navigate the 3-day rule.  The 8-page document was updated in July 2019.  This resource has a lot of information that you need to be aware of so be sure to share it with all involved in your facility.

“To qualify for Skilled Nursing Facility (SNF) extended care services coverage, Medicare beneficiaries must meet the “3-day rule” before SNF admission. The 3-day rule requires the beneficiary to have a medically necessary 3-day-consecutive inpatient hospital stay and does not include the day of discharge, or any pre-admission time spent in the emergency room (ER) or in outpatient observation, in the 3-day count.

SNF extended care services are an extension of care a beneficiary needs after hospital discharge or within 30 days of their hospital stay (unless admitting them within 30 days is medically inappropriate). Hospitals should correctly communicate to SNFs and beneficiaries (and/or their representatives) the number of inpatient days, so all parties fully understand the potential payment liability. The law at §1861(i) of the Social Security Act and the implementing regulations in Title 42 of the Code of Federal Regulations (CFR) § 409.30 specify that for Medicare to cover SNF services, the beneficiary must first have a qualifying inpatient stay in the hospital of at least 3 consecutive calendar days, starting with the calendar day of hospital admission but not counting the day of discharge.

  • Improper Medicare payments may occur when a hospital discharges an inpatient Medicare beneficiary before the patient meets the 3-day rule, and the SNF admits the patient for extended care services.
  • Hospitals must correctly understand the 3-day rule, so they give accurate inpatient stay information dates to SNFs and beneficiaries
  • SNFs must correctly understand the 3-day rule to avoid inappropriately submitting claims that do not meet the 3-day rule”


Additional information in the Fact Sheet includes:

  • Using the Moon (Medicare Outpatient Observation Notice)
  • Using the IM (Important Message from Medicare)
  • Medicare SNF claims processing
  • Inpatient and non-inpatient hospital stay days
  • Financial responsibility for SNF services when there is no 3-day qualifying stay
  • Resources

The resources section has numerous hyperlinks to additional information for billing, etc.

Keep this resource handy!