Improving Access to Medicare Coverage Act

Floor Speech

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Ms. COLLINS. Mr. President, I rise today to introduce the Improving Access to Medicare Coverage Act, to help protect American seniors from high medical costs when they need skilled nursing care after hospitalization. I am pleased to be joined on this bill by my colleague from Vermont Senator Welch.

Our bill corrects a problem arising from current Medicare policy, which requires beneficiaries to have an ``inpatient'' hospital stay of at least 3 days before Medicare will cover posthospitalization skilled nursing care. Patients who receive hospital care under ``observation status'' do not qualify for this benefit, even if their hospital stay lasts longer than 3 days.

Many patients on observation stays may not even realize that they have never been admitted as inpatients. They just know that they are in the hospital. If they are admitted later to a skilled nursing facility for follow-up care, they may be shocked to learn that they will be liable for out-of-pocket costs totaling thousands of dollars. Some Medicare beneficiaries may be foregoing skilled nursing or rehabilitation care altogether because they simply cannot afford to pay the out-of-pocket costs.

The financial consequences of the distinction between an observation stay and inpatient admittance can be severe for seniors.

One example is a Maine Medicare enrollee who was admitted in ``observation status'' at a hospital in Maine, but who needed and received acute care at that hospital. She was discharged to a skilled nursing care facility, which was also appropriate for her condition, but because of Medicare's 3-day rule and its treatment of ``observation status,'' Medicare refused to pay for her skilled nursing care. She was stuck with a bill of more than $56,000.00 for care she needed. That is unfair.

In another example, shared with me by Dr. Claudia Geyer, the chief medical officer at Central Maine Medical Center in Lewiston, ME, a 90- year-old man with a fractured pelvis was denied Medicare coverage for skilled nursing care because he was admitted to the hospital under observation status. This gentleman had no way of paying for skilled nursing care on his own, so he had to remain in the hospital, costing Medicare more--and more important--not getting the physical therapy he needed to regain his strength and recover. As a result, he slowly weakened, suffered cognitive declines, and deteriorated to the point where he needed extensive care that may have been avoidable.

Dr. Geyer also cared for a 99-year-old patient who was living independently with the support of her family and had never before required hospitalization. This patient used a walker in her home but suffered a fall and broke her wrist. She was stabilized in the hospital and was expected to make a full recovery, but first she needed high quality skilled rehab, and she could not use her walker while her wrist healed. Despite almost a century of good health and almost no cost to Medicare in her lifetime, she and her family were horrified when they were told that CMS would not cover her skilled nursing expenses due to the hospitalization being deemed an ``observation stay.''

During Covid, this 3-day rule was waived to make sure seniors could be discharged from the hospital to skilled nursing homes as soon as it was medically appropriate. That waiver ensured that patients weren't hospitalized longer than truly necessary and also protected seniors from unexpected and unfair bills. But as soon as the waiver ended in 2023, patients started staying in the hospital longer for no medical reason. In fact, a study published in January by the Brown University School of Public Health showed that Medicare paid for 2,000 more inpatient days in the month following the end of the waiver just because of this rule. If our aim is to improve the quality of care our seniors receive while avoiding unnecessary expenses, allowing this waiver to expire has taken us in the wrong direction.

The bipartisan bill we are reintroducing today effectively codifies the waiver by deeming time spent in observation status as inpatient care for the purpose of Medicare's 3-day prior hospital stay requirement for skilled nursing care.

I am pleased this bill has the support of the Society of Hospital Medicine, the American Health Care Association, and more than 30 other organizations that represent seniors and their health care needs.

When seniors require hospitalization, their focus should be on their health and getting well, not on how they were admitted. The bill we are reintroducing advances that goal by helping insulate older Americans from undue out-of-pocket costs while ensuring that they get the care they need. I urge my colleagues to support it.

Hon. Susan Collins, U.S. Senate, Washington, DC.

Dear Senator Collins: On behalf of the undersigned organizations, we write to thank you for introducing the Senate version of the Improving Access fo Medicare Coverage Act of 2025. This bipartisan Legislation would ensure that Medicare beneficiaries can access needed skilled nursing facility (SNF) care by counting time spent in hospital observation status toward the existing three-day hospital stay requirement.

For decades, Medicare has required beneficiaries to have a three-day inpatient hospital stay to qualify for SNF coverage. However, current hospital practices increasingly classify patients under ``observation status,'' even when they receive the same care as admitted inpatients--often for multiple days. Because observation days do not count toward the qualifying stay, many beneficiaries are denied access to SNF care or face significant and unexpected out-of-pocket costs.

This issue is particularly significant for Maine. In 2024, Maine led the nation with the highest percentage of state residents ages 65 and older (23.5%). Add that to the fact that many of you rural constituents across the state often rely on seamless transitions from hospital to SNF settings, and administrative barriers like the observation status policy can delay care, increase costs, and create unnecessary hardship for patients and their families. Ensuring timely access to SNF services is essential to maintaining continuity of care, especially in areas where provider options may be limited and distances between care settings are greater.

Your legislation offers a common-sense solution by ensuring that all days a patient spends in the hospital--whether classified as inpatient or observation--count toward the threeday requirement. This policy change would better align traditional Medicare with modern care delivery and with existing Medicare Advantage, Accountable Care Organization, and bundled payment models, which already allow greater flexibility in accessing SNF services.

Importantly, evidence demonstrates that this reform would improve beneficiary access to post-acute care without significantly increasing costs to the Medicare program. Analysis estimates a modest net impact on the Medicare Trust Fund--approximately $191 million over ten years--while expanding access to necessary care for thousands of beneficiaries each year.

This legislation is especially important for vulnerable populations. Beneficiaries who lack access to alternative Medicare models are disproportionately affected by the current policy and may be unable to receive appropriate post- acute care despite medically necessary hospital stays. Research also shows that reinstating the strict three-day inpatient requirement can lead to longer hospital stays without improving patient outcomes, increasing overall costs while creating unnecessary barriers to care.

For Maine's seniors, families, and providers, this legislation would remove an outdated barrier and support more efficient, patient-centered care transitions--helping ensure that beneficiaries can recover in the most appropriate setting without avoidable financial strain.

Again, we thank you for your introduction of the Improving Access to Medicare Coverage Act and look forward to working with you and other members of the Senate to ensure that Medicare beneficiaries receive timely access to the post- acute care they need.

Thank you for your leadership and consideration. Sincerely,

ADVION (formerly National; Association for the Support of Long Term Care); Aging Life Care Association; Alliance for Retired Americans; American Academy of Emergency Medicine; American Association of Healthcare, Administrative Management (AAHAM); American Association of Post Acute Care; Nursing (AAPACN); American Case Management Association (ACMA); American College of Emergency Physicians (ACEP); American College of Physician Advisors (ACPA), American Geriatric Society (AGS); American Health Care Association (AHCA); American Medical Association; American Physical Therapy Association (APTA); Association of Jewish Aging Services (AJAS; Catholic Health Association of the United States (CHA); Center for Medicare Advocacy; The Hartford Institute Geriatric Nursing; The Jewish Federations of North America; Justice in Aging; LeadingAge; Lutheran Services in America; Medicare Rights Center; National Academy of Elder Law Attorneys, Inc. (NAELA); National Association of Benefits and Insurance Professionals (NABIP); National Association County Health Facilities (NACHFa); National Association for State Longterm Care Ombudsman Programs (NASOP); National Center for Assisted Living (NCAL); National Committee to Preserve Social Security & Medicare; The National Consumer Voice for Quality Long-Term Care; National Council on Aging (NCOA); National Transitions of Care Coalition (NTOCC); NJHSA--the Network of Jewish Human Services Agencies; Post-Acute and Long-Term Medical Association; Society of Hospital Medicine (SHM); Special Needs Alliance; USAging. ____ Society of Hospital Medicine, Philadelphia, PA. Hon. Susan Collins, United States Senate, Washington, DC.

Dear Senator Collins: The Society of Hospital Medicine (SHM), representing the nation's hospitalists, is pleased to offer our support for the reintroduction of the Improving Access to Medicare Coverage Act. This legislation will make days spent in observation count towards Medicare's three-day stay requirement for skilled nursing facility (SNF) coverage, ensuring Medicare beneficiaries receive the quality care they need without facing exorbitant and unexpected medical bills. This legislation is an important first step to address problems related to observation status and ensure beneficiaries qualify for much-needed care.

Hospitalists are front-line physicians in America's acute care hospitals. They focus on the general medical care of hospitalized patients and manage the inpatient clinical care of their patients. SHM estimates that hospitalists oversee the vast majority of observation care to hospitalized Medicare patients each year. As a result, our members are uniquely positioned to understand and identify problems related to current observation policies.

Observation care was meant to last fewer than 24 hours and rarely span more than 48 hours; however, the incidence and duration of observation stays has increased significantly over the past fifteen years. While patients admitted into observation receive nearly identical care to those in inpatient care under Medicare Part A, observation is billed as outpatient under Medicare Part B. As such, patients face highly variable out-of-pocket costs (coinsurance), particularly when they need post-acute care.

Time spent under observation does not count toward the three-day inpatient stay requirement for Medicare SNF coverage, observation is considered outpatient care. Patients discharged from observation to SNFs faced with the choice between extremely high, unexpected SNF bills and forgoing necessary follow-up care. Furthermore, beneficiaries in the most disadvantaged communities are more likely to have an observation stay, to have a repeated observation stay within 30 days, and to experience long-term observation. The three- day stay requirement perpetuates existing healthcare access inequities. This legislation would help address this disparity.

Additionally, the three-day stay waivers issued during the COVID-19 public health emergency (PHE) empowered clinicians to focus on patient needs, rather than an outdated administrative policy. The three-day stay waiver helped facilitate the Society of Hospital Medicine transfer of patients based on their clinical needs, rather than a payment policy, helping patients get the care they needed at the appropriate level. Medicare expenditure data from the Centers for Medicare and Medicaid Services (CMS) during the PHE shows that expanding access to SNF coverage did not dramatically increase spending or utilization. This PHE era policy demonstrates how the current three day stay requirement is an unnecessary impediment to SNF coverage.

The Improving Access to Medicare Coverage Act is an important step to ensuring patient access to postacute care. We need to pass legislation to begin eliminating bureaucratic barriers to necessary medical care.

On behalf of SHM, thank you for reintroducing the Improving Access to Medicare Coverage Act. SHM is pleased to offer our support to help secure the passage of this legislation. Sincerely, Efren C. Manjarrez, MD, FACP, SFHM, President.

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