Medicare Denied Skilled Nursing Facility Stay
Does your notice say something like this?
"This skilled nursing facility stay is not covered"
"You did not have a qualifying hospital stay before entering the skilled nursing facility"
"Medicare has determined that skilled nursing care is no longer medically necessary"
"The services you received are considered custodial care"
If so, you're in the right place. Here's what it means and what to do.
What This Means
Medicare denied coverage for your stay at a skilled nursing facility (SNF). This means Medicare will not pay for some or all of the nursing or rehabilitation care you received (or are currently receiving) at the facility.
SNF denials can be very costly. Without Medicare coverage, you could be responsible for the full daily rate, which often ranges from $250 to $600 or more per day depending on your location and the level of care.
Why This Happens
- You did not meet the 3-day inpatient hospital stay requirement. For Original Medicare, you must have been admitted as a hospital inpatient for at least 3 consecutive days before entering the SNF. The 3 days must be actual inpatient days — time on observation status does not count. This is the single most common reason for SNF coverage denials.
- Your hospital stay was classified as observation. If the hospital placed you on observation status instead of admitting you as an inpatient, those days do not count toward the 3-day requirement. You may not have even known you were on observation. (See our observation vs. inpatient guide for more.)
- Medicare determined your care is “custodial.” Medicare covers skilled nursing care — things like physical therapy, wound care, IV medications, or monitoring by a nurse. It does not cover custodial care, which is help with daily activities like bathing, dressing, and eating. If Medicare decides your care is custodial, it will deny coverage.
- Medicare says skilled care is no longer needed. Even if your stay was initially approved, Medicare may stop coverage if it determines you no longer need skilled care. This often happens during a continued-stay review.
- You exceeded the 100-day benefit limit. Medicare covers up to 100 days of SNF care per benefit period. After day 100, there is no more Medicare coverage regardless of medical need.
- Your Medicare Advantage plan denied authorization. MA plans often require prior authorization for SNF stays and may apply stricter criteria than Original Medicare.
Should You Appeal?
Appeal outlook: Mixed
Your chances depend on the reason for the denial:
- If the denial is based on observation status, you may be able to appeal both the hospital classification and the SNF denial. A 2024 federal rule now allows certain Original Medicare patients to appeal observation status decisions. If the hospital should have admitted you as an inpatient, winning that appeal would also establish the 3-day qualifying stay.
- If Medicare says you no longer need skilled care, appeal with detailed clinical notes from your doctor and therapists showing that you still require skilled services. Under the Jimmo v. Sebelius settlement, Medicare must cover skilled care to maintain your condition or prevent decline — you do not need to be improving.
- If the denial is for custodial care, the appeal is harder unless you can show that your care actually does require skilled nursing or therapy services.
- If you have hit the 100-day limit, there is no appeal that can extend this benefit.
- HHS data shows that 75% of appealed MA denials are overturned, but only about 1% of denials are actually appealed. Many people give up too soon.
What To Do Next
- Ask the SNF for a written notice. If you are still in the facility, the SNF must give you a notice (called a SNFABN for Original Medicare, or a similar notice for MA plans) before stopping your coverage. This notice explains your appeal rights.
- Request a fast appeal if coverage is ending now. If you are being told your SNF coverage is stopping, you can request an expedited review from your plan (for MA) or from a Quality Improvement Organization (QIO) for Original Medicare. You must act quickly — typically within 2 days of getting the notice.
- Get documentation from your care team. Ask your doctor, nurses, and therapists for notes explaining why you still need skilled care. If they support continued coverage, their documentation is your strongest evidence.
- Check whether the 3-day rule was met. Review your hospital records to confirm whether you were admitted as an inpatient and whether your stay was at least 3 full days. If observation status is the issue, consider appealing the hospital classification as well.
- File a formal appeal. Follow the instructions on your denial notice to file within the deadline. Include your doctor’s supporting statement and any relevant medical records.
- Get free help. Contact your State Health Insurance Assistance Program (SHIP) for free counseling, or call 1-800-MEDICARE (1-800-633-4227). The Center for Medicare Advocacy offers a free self-help packet for SNF appeals.
Sources
- Medicare.gov: Skilled Nursing Facility Care — official coverage rules and 3-day requirement
- CMS: Appeal Rights for Certain Changes in Patient Status (October 2024) — new appeal rights for observation status
- Center for Medicare Advocacy: Self-Help Packet for SNF Appeals — step-by-step appeal guide
- CMS: Jimmo Settlement — maintenance therapy coverage rules
- Congressional Research Service: Medicare’s SNF Three-Day Inpatient Stay Requirement — legislative background
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Appeal Deadlines — Check Your Notice for Exact Dates
Original Medicare
120 days from the date on your MSN
Medicare Advantage
At least 60 days (check your denial notice for exact deadline)
Not sure which you have? Check the top of your denial notice. If it names a private insurance company (like Humana, UnitedHealthcare, or Aetna), you have Medicare Advantage. If it says "Centers for Medicare & Medicaid Services," you have Original Medicare.
Frequently Asked Questions
What is the 3-day hospital stay rule?
For Original Medicare to cover a skilled nursing facility stay, you must first spend at least 3 consecutive days as a hospital inpatient. The day you are admitted counts, but the day you are discharged does not. Time spent on observation status does not count toward these 3 days.
Does observation time count toward the 3-day rule?
No. Only time classified as inpatient counts. If you spent 2 days on observation and 1 day as an inpatient, you did not meet the 3-day requirement. This is one of the most common reasons for SNF denials.
How many days does Medicare pay for in a skilled nursing facility?
Medicare covers up to 100 days per benefit period. Days 1 through 20 are fully covered. Days 21 through 100 require a daily coinsurance payment (in 2026, this is $204.50 per day). After day 100, Medicare does not cover SNF care.
Can I be denied because I'm not improving?
No. Under the Jimmo v. Sebelius settlement, Medicare cannot deny skilled nursing coverage solely because you are not improving. If you need skilled care to maintain your condition or prevent decline, that care should be covered. If your denial mentions 'improvement,' you have strong grounds for an appeal.
Want Us to Check Your Denial?
Send us your denial notice and we'll review it for free. We'll tell you if it's worth appealing and exactly how to do it.
This information is for educational purposes only and is not legal or medical advice. Always verify with your doctor's office and insurance company.