Medicare Part A

Medicare Part A Hospital Insurance (HI) Benefits

Benefits are available under Medicare Part A for inpatient hospital care, post-hospitalization skilled nursing facility care (SNF, often pronounced “sniff”), home health care, and hospice care.

Medicare Part A Benefit Periods

Medicare uses benefit periods to measure a patient’s use of services for inpatient hospital and skilled nursing facility care, and separately for hospice care. In the hospital and skilled nursing facility context, a benefit period begins on the day a beneficiary enters an inpatient hospital and ends when he or she has not received inpatient hospital or skilled nursing facility care of 60 days in a row.

If a senor enters an inpatient hospital after one benefit period ends, a new benefit period begins. The practical effect is that a senior owes an impatient hospital deductible of $1,068 (2009) for the first day of hospitalization in each benefit period (this deductible amount may change in 2010 and beyond); and may owe more than one Part A deductible in any calendar year. It is not an annual deductible. This may surprise some seniors, especially those who’ve not been hospitalized under the Medicare program. Also, they may not realize that Medicare Part A and B have separate deductibles.

There is no limit to the number of benefit periods a Medicare patient can have. Benefit periods, along with theirs sets of Medicare-covered days (see below), renew whenever a patient’s discharge from the hospital of SNF is followed by at least 60 days without a subsequent inpatient hospital admission. Conversely, if a patient is hospitalized repeatedly without a 60-day break, the benefit period continues indefinitely and the senior uses up the covered days outlined below.

Inpatient Hospital Coverage

Medicare covers inpatient hospital services, provided the patient needs an inpatient level of care. These services include, among others, semiprivate room and board, regular nursing services, and drugs furnished by the hospital.

In each benefit period, Medicare covers at least 90 days of inpatient care in a participating hospital (including rehabilitation hospitals).    

  • For days 1 through 60. The Medicare beneficiary is responsible for the $1,068 (in 2009). Part A deductible (the amount may change in 2010 and beyond). The beneficiary owes nothing else for hospitalization until days 61 through 90.
  • For days 61 through 90. The beneficiary owes a daily coinsurance charge, which is $267 (in 2009; the amount may change in 2010 and beyond). Medicare’s payment covers the balance of hospital charges. This out-of-pocket expense could exceed $6.000, even during a fully insured illness.
  • Lifetime reserve days 91 through 150. In addition to the 90 renewable inpatient hospital days per benefit period, each Medicare beneficiary has 60 lifetime reserve days. However, before any lifetime reserve days can be used, a Medicare recipient must have exhausted that benefit period’s 90 inpatient days and remain hospitalized. The beneficiary pays a daily coinsurance of $534 (in 2009; the amount may change in 2010 and beyond) for each lifetime reserve day, while Medicare’s payment covers the balance of hospital expenses.
  • After 150 days. Part A coverage ends. Until the benefit period ends (with the required 60-day break between hospitalizations) Medicare does not cover inpatient hospitalization. Note that this happens infrequently. In the vast majority of cases, at least 60 days separate hospitalizations and a new benefit period begins well before a beneficiary uses up all 150 covered days.

Inpatient care in a psychiatric hospital has a lifetime limit of 190 days. (2009)

“Do I Owe the Part A Deductible?”

Assume that Mrs. Flores enters the hospital for a broken hip and is discharged after seven days. If she suffers a stroke and returns to the hospital 20 days later and is hospitalized for 10 days, the two hospitalizations occur within the same benefit period. She owes only one Part A deductible and has thus far used 17 Medicare-covered inpatient hospital days in the benefit period. If the time between the discharge for the broken hip and the admission for the stroke had been more than 60 days, a new benefit period would start, and Mrs. Flores would owe a second Part A deductible. Observe that benefit periods in Medicare are designated by days, not diagnoses. 

“I Think I Need a Hospital Level of Care!”

Ms. Antonia was hospitalized for a mastectomy. On the day following the surgery, her surgeon announced that he planned to discharge her the next morning despite some instability in her condition. Ms. Antonia has vomited four times already that morning and felt quite weak. She worried that the discharge was premature, and that going home might be dangerous.

To delay the discharge and to avoid financial liability or a noncovered hospital stay, Ms. Antonia could ask the hospital’s Utilization Review Committee (URC) to evaluate the medical necessity of a longer hospital stay. If she disagrees with the URC’s decision, she could also request an independent review by the Quality Improvement Organization (QIO) in her state. Medicare contracts with QIOs to ensure that Medicare beneficiaries receive high-quality care. QIOs also rule on the appropriateness of continued hospital stays when patients, like Ms. Antonia, request a review. If Ms. Antonia requests the review quickly, Medicare rules protect her from any financial liability for the hospital stay until the day after the QIO makes its decision

Skilled Nursing Facility Coverage

Medicare Part A covers up to 100 days of inpatient care in a Medicare participating skilled nursing facility. Medicare covers SNF care if the stay meets the following conditions: 

  • A physicians certifies that the patient needs care in a SNF.
  • The patient has been hospitalized for at least three nights in a row preceding transfer to the SNF. (72 hours)
  • The patient enters the SNF within 30 days of discharge from the hospital for the same reason he or she was hospitalized (with an exception for medically necessary delays in SNF admission).
  • The patient receives skilled nursing or skilled rehabilitation services, or both, on a daily basis.

With respect to the beneficiary’s costs: 

  • For days 1 through 20. Medicare covers all costs. The patient owes no deductible or coinsurance charges.
  • For days 21 through 100. Medicare covers all but a daily coinsurance amount, which is$133.50 (in 2009; the amount may change in 2010 and beyond).
  • Beyond 100 days. Medicare coverage ends. Medicare provides no SNF coverage until a new benefit period begins.

The Part A deductible and hospital and SNF coinsurance charges typically rise each year. The deductible is based on a national average daily cost of hospitalization. The coinsurance charges are calculated on fixed percentages of the deductible. Consult Medicare in November to learn the amounts of the following year’s cost-sharing amounts.

Home Health Care Coverage

Health home care is skilled nursing care, physical therapy, speech therapy, and certain other health care services that patients receive in their homes for the treatment of or recovery from an illness or injury. If a patient receives skilled nursing or rehabilitation services, Medicare also covers home health aide services, in which some custodial needs, such as bathing, are met. Medicare covers some home health care if all of the following conditions are met: 

  • A doctor must decide the patient needs medical care in the home and makes a plan for care at home.
  • The patient must require at least one of the following skilled services on a part-time or intermittent basis: skilled nursing care, physical therapy or speech language pathology services, or a continued need for occupational therapy.
  • The patient must be homebound. (Homeboundmeans the patient has a normal inability to leave home and that leaving home is a “considerable and taxing effort.”   Absences from home must be infrequent or of short duration. A patient may attend religious services, leave the house to get medical treatment – including therapeutic or psychosocial care – and get care in an adult day care program that is state-licensed or –certified or state-accredited to furnish adult day care services. CMS recently clarified that attendance to family gatherings such as reunions, funerals, and graduations are infrequent absences of short duration for Medicare coverage purposes.)
  • Medicare must approve the home health agency caring or the patient.

A common misperception about Medicare’s home health benefit is that is does not pay for home health for patients with chronic and stable conditions. The key question, however, is whether the individual continues to need skilled nursing or rehabilitation services on a part-time basis. A federal regulation states, “the determination of whether skilled nursing care is reasonable and necessary must be based solely upon the beneficiary’s unique condition and individual needs, without regard to whether the illness or injury is acute, chronic, terminal, or expected to last a long time.” In 2001 CMS further clarified that Medicare cannot use a dementia diagnosis to automatically deny therapy and psychiatric claims for Alzheimer’s patients (Sohmer Dahlin, 2003).

No Deductible or Coinsurance Charge for Home Health Care Visits

Medicare Parts A and B both cover home health care, with no set limit on the number of nursing or rehabilitation visits a patient receives, provided that the patient continues to meet the coverage rules outlined above. No deductible or coinsurance charges apply. Medicare. However, does not cover around-the-clock nursing of home health aide services, essentially custodial care.

Hospice Coverage

Medicare provides up to 210 days of hospice care without a deductible in situations where a Medicare-insured person in medically certified to have a life expectancy of six months or less. A small fee for drug costs may apply. If a patient survives the 210-day period, Medicare will review the extension of hospice coverage of a case-by-case basis.

Limitations and Exclusions Related to Part A Hospice Insurance

Medicare patients are responsible for 20 percent of reasonable charges for durable medical equipment (DME), such as wheelchairs and oxygen machines, provided by a home health agency following hospital of SNF discharge. DME is covered under Part B.

Medicare does not pay at all for convenience items such as telephones, nor will it cover surcharges for private rooms unless private rooms are medically necessitated. (A recent trend in hospitalization has eliminated many private-room surcharges.)

Medicare does not pay for private duty nursing, the first three pints of blood required in a transfusion, or nursing home care that does not involve skilled care on a daily basis. The program generally excludes coverage for services at a custodial lever of care. It does, however, cover some custodial care services provided by home health aides, provided that the patient also receives part-time or intermittent skilled care services. Finally, Medicare generally excludes coverage for care received outside the United States and its territories.

The information above is reprinted from Working with Seniors: Health, Financial and Social Issues with permission from Society of Certified Senior Advisors® . Copyright © 2009. All rights reserved.