Navigating Post Acute Hospital Bill Pay: A Guide for Patients

Paying medical bills can be confusing, especially after a hospital stay. If you or a loved one has received post acute care services like skilled nursing, inpatient rehab, home health, or long term care hospital services, you may have questions about what services are covered and how much you will owe. This guide breaks down the common billing scenarios after post acute care and provides tips to make the process smoother.

What is Post Acute Care?

Post acute care (PAC) refers to services provided after an inpatient hospital stay to help a patient continue recovering and regain independence The four main types of Medicare-covered post acute care are

  • Skilled Nursing Facilities (SNF) Provide services like nursing care, physical therapy, occupational therapy, and speech therapy to patients who need additional care after a 3+ day hospital stay Average length of stay is 20-30 days.

  • When someone has a stroke, brain injury, or spinal cord injury, an inpatient rehabilitation facility (IRF) specializes in intensive rehabilitation therapies. Average length of stay is 10-15 days.

  • Home Health Agencies Provide intermittent skilled nursing, therapy and aide services to homebound patients. Average length of stay is 2-3 months.

  • Long Term Care Hospitals (LTCH) treat patients with complex medical needs who need more time to recover at the hospital level. Average length of stay is 25 days.

PAC services help patients regain function, recover from illness/injury, and transition back home. Around 8% of total Medicare spending goes toward post acute care services.

What Should I Expect to Pay for Post Acute Care?

If you have Original Medicare (Part A and Part B), here is a breakdown of how much you will pay for different PAC services:

Skilled Nursing Facility:

  • First 20 days: You pay $0 for covered services. Medicare covers 100%.

  • Days 21-100: You pay a daily coinsurance amount around $194.50 (in 2023).

  • After 100 days: You pay the full cost out-of-pocket or have secondary insurance cover.

Inpatient Rehabilitation Facility:

  • All days 1-90: You pay a daily coinsurance amount around $203 (in 2023).

  • After 90 days: You pay the full cost out-of-pocket or have secondary insurance cover.

Home Health:

  • All visits: You pay $0 for covered services. Medicare covers 100%.

Long Term Care Hospital:

  • First 60 days: You pay a daily coinsurance amount around $203 (in 2023).

  • Days 61-90: You pay a daily coinsurance amount around $406 (in 2023).

  • After 90 days: You pay the full cost out-of-pocket or have secondary insurance cover.

What Services Does Medicare Cover for Post Acute Care?

Medicare covers post acute care services that are considered “medically necessary” – meaning they are needed to help improve or maintain your health after a hospitalization. Here are some examples of covered services:

  • Skilled nursing care
  • Physical, occupational, and speech therapy
  • Medical social services
  • Medications and medical supplies/equipment during the stay
  • Room and board

Medicare does NOT cover:

  • Personal or custodial care (help with activities of daily living)
  • Private room (unless medically necessary)
  • Non-medical transportation
  • Personal comfort items

How Are Post Acute Care Services Billed and Paid?

Medicare pays post acute care providers through prospective payment systems (PPS). This means the provider receives a bundled payment amount per day or episode of care, rather than billing for individual services.

The payment covers all services provided during the stay, aside from a few exceptions that can be billed separately like certain medications and costly equipment.

As the patient, you will not receive individual bills for each service during your stay. You will receive:

  1. A bill from the provider for any daily copays or other out-of-pocket costs you owe

  2. A Medicare Summary Notice showing the charges submitted to Medicare and how much was covered

The post acute care provider cannot charge you more than the Medicare copay amounts. They must accept the Medicare-approved payment rates.

What If I Have Medicare Advantage or Other Insurance?

If you have a Medicare Advantage Plan, your costs and coverage may differ from Original Medicare. Check with your plan to understand the network, prior authorization requirements, and out-of-pocket costs for post acute care services. Some tips:

  • Make sure the PAC provider you choose is in-network with your Medicare Advantage plan. Out-of-network care often costs more.

  • Ask if a referral or prior authorization is required before receiving PAC services. Plans may require this as a condition of payment.

  • Understand the plan’s copay structure – it may differ from Original Medicare copays for SNF, IRF, LTCH services.

  • Confirm coverage details in writing. Get prior authorization reference numbers when approvals are obtained.

If you have secondary insurance like Medigap or retiree coverage, provide this information upfront to the PAC provider. Your supplemental policy may cover all or part of the Medicare out-of-pocket costs like copays and deductibles.

Billing Scenarios to Watch Out For

Here are some common billing issues that can arise with post acute care services and how to address them:

You are billed more than the Medicare copay amount: Post acute care providers cannot charge Original Medicare beneficiaries more than the daily copay amounts set by Medicare. If you receive a bill for a higher amount, request an itemized bill and ask them to resubmit the claim to Medicare if it was not already done.

You receive unpaid balance bills after Medicare paid: With Original Medicare, you cannot be balance billed after Medicare makes payment at the approved rates. Follow up with the provider billing department for explanation and request they adjust or void the balance bill.

Services are not covered: If Medicare determines that certain services provided were not medically necessary, they may be denied, leaving you responsible for the cost. You can appeal such denials and provide medical documentation to support the need.

Home health care unexpectedly ends: Home health agencies must give you a written notice at least 48 hours before discontinuing care. Evaluate the notice and discuss ongoing care needs with your physician.

Appealing Denied Claims or Bills

If Medicare does not cover or pay for services you received, or you disagree with an amount you were billed, you have the right to appeal. Follow the appeal instructions on any notification letters closely. Key steps include:

  • Request an itemized bill from the provider showing each denied service

  • Obtain medical records and doctor’s notes to support your appeal

  • Submit the appeal to Medicare within required timeframes

  • Include a letter explaining why you believe the services should be covered

You may need to navigate both the Medicare appeals process as well as an appeal to your supplemental insurer if applicable. For assistance, contact your State Health Insurance Assistance Program (SHIP) or Medicare Advantage plan.

Create a Process to Manage Medical Bills

Managing post acute care bills effectively takes organization and attention to detail. Here are some tips:

  • Note important dates like Medicare appeal deadlines on a calendar

  • Create a filing system to store bills, letters from Medicare, notices, and other documents

  • Record billing discussions and next steps in a notebook

  • Contact providers right away if you receive unclear or questionable bills

  • Open and read all letters from Medicare and your insurer about covered services

  • Seek help from family members or professionals if the paperwork becomes overwhelming

With some preparation and persistence, you can minimize stress and handle the billing process successfully. Reach out for assistance if you have questions navigating Medicare coverage, appeals, or your specific post acute care bills.

Post Acute.Hospital Bill Pay

How Traditional Medicare Pays SNFs

Medicare pays SNFs on a per-diem (daily) rate. When Medicare was passed in 1965, it included some coverage restrictions for SNFs designed to reduce overutilization of this expensive service.6 These restrictions include requiring that beneficiaries have a minimum stay of three days in a hospital to qualify for coverage in a SNF; paying for a maximum of 100 days of SNF care per benefit period (an acute illness episode); and requiring a large daily patient copayment starting on day 21 of a SNF stay. Traditional Medicare has retained these rules, while some Medicare Advantage (MA) managed care plans, accountable care organizations (ACOs), and other newer payment models have opted out of these restrictions. In addition, the Centers for Medicare and Medicaid Services (CMS) waived the 3-day prior hospitalization rule in 2020, during the COVID-19 pandemic. We now have evidence about the effects of some of these rules on health care utilization and quality.

Evidence from MA plans suggests that the 3-day rule inappropriately lengthens hospital stays for some Medicare enrollees. Comparing plans that did and did not eliminate the 3-day rule, one study found a 0.7 day decrease in hospital length of stay for patients enrolled in plans that eliminated the rule, with no increase in number or length of SNF stays.7

Meanwhile, within traditional Medicare, the 3-day rule appears to encourage overuse of SNFs, based on a comparison of day two and day three discharges, while also leading to higher 30-day hospital readmission rates.8 This research suggests that eliminating the 3-day rule could save Medicare about $345 million a year (1.1% of total Medicare SNF payments).

In the first year of COVID-19, despite the waiver, SNF use after hospital discharge dropped as the pandemic hit nursing homes hard.4 However, PAC episodes provided to long-term care residents without a preceding hospitalization (a process known as “skilling in place”) increased by 77%, with no appreciable change in Medicare’s monthly spending on SNF during the pandemic ($2.1 billion before the pandemic versus $2.0 billion during the pandemic).9

Another feature of traditional Medicare’s SNF payment policy is the patient copayment ($200 per day in 2023) starting on day 21 of a SNF episode. This payment structure has received scrutiny for its impact on length of stay, in particular for patients without supplemental coverage or Medicaid. Medicare beneficiaries are commonly discharged from SNFs on day 20 of their SNF stay, right before the copayment kicks in, and those discharges are more common among individuals who are racial or ethnic minorities or who live in poorer areas.10 This spike in discharges on day 20 is associated with shorter SNF stays, higher hospital readmission rates, and higher Medicare spending after discharge.11 This suggests that the copayment policy may have unintended and negative effects by encouraging discharge from a SNF sooner than medically indicated.

At the same time, traditional Medicare may also create incentives for SNFs to extend certain stays because of its generous per-diem payments without patient cost sharing through the 20th day of the SNF stay. While research has found that one additional day in a SNF results in a slightly lower likelihood of rehospitalization within 7 and 14 days after SNF discharge (by 0.15 percentage points and 0.1 percentage points respectively), these benefits wane by 30 days after SNF discharge. Medicare’s savings stemming from lower rehospitalizations are small and do not offset the cost of the additional day in a SNF, resulting in an increase in total Medicare payments of $371.12 Notably, longer SNF stays are more valuable for clinically complex patients than for the average beneficiary.

When Medicare began in the 1960s, it paid most SNFs on a reasonable cost basis. In 1997, with the passage of the Balanced Budget Act, traditional Medicare implemented a prospective payment system for SNFs. These prospective pay rates were adjusted for case mix and geographic variation in wages and were designed to cover all costs of SNF care. This case-mix adjustment heavily weighted payments by the volume of therapy services provided, increasing per-diem rates for more intensive therapy services. Then, in October 2019, Medicare replaced this case-mix adjustment with a new model, called the Patient Driven Payment Model (PDPM), in an attempt to incentivize value over volume.2 The PDPM model removes therapy minutes as the driving force for payments, instead focusing on clinically relevant factors that account for medical complexity and functional status.2 According to MedPAC, the number of therapy minutes dramatically declined between January 2019 and March 2022 (Figure 3).

The evidence to date suggests that the reduced therapy minutes has not worsened patient outcomes. While implementation of PDPM has been associated with a drop in therapy minutes in the range of 13% to 19%, this has not been associated with changes in length of SNF stay, functional status at SNF discharge, rates of discharge to the community, or readmission to the SNF13 or the hospital.14

Although the PDPM was intended to be budget-neutral, CMS’ initial analysis showed an increase in payments of about 5%, or $1.7 billion per year. As a result, CMS is phasing in a 2.3% reduction in SNF payment rates in both FY 2023 and FY 2024.15

Figure 3. Number of Therapy Minutes per Stay, January 2019-March 2022 (Source: MedPAC 2023 (

In another attempt to improve the value of SNF services, CMS launched a value-based payment (VBP) for SNFs in October 2018. Designed to be budget-neutral, the program sets aside 2% from the Medicare Part A funding pool, and rewards or penalizes SNFs based on their risk-adjusted 30-day hospital readmission rates.16 In the first two years of the program (FYs 2019 and 2020), only 26% and 19% of facilities earned positive incentives, whereas 72% and 69% of facilities earned negative incentives.17 There is some evidence that VBP penalized poorly performing facilities, those with large populations of frail older adults, and those with many socially vulnerable patients (racial/ethnic minorities, lower socioeconomic status).18 Furthermore, although SNFs can receive rewards for improving their performance, few low-performing facilities were able to improve their readmission rates enough to avoid a financial penalty, raising concerns that the VBP program did not offer a viable path for low-performing SNFs to avoid financial penalties.19

For FY 2024, CMS has proposed changing the structure of its VBP plan.15 These changes include focusing on preventable readmission, rather than all-cause readmission; supplementing the readmission metric with four new quality metrics including nursing turnover and functional status at SNF discharge; and introducing a health equity adjustment, which rewards SNFs for taking on higher-risk populations (defined as at least 20% dual eligibility for Medicare and Medicaid).

Bundled Payment Models in Traditional Medicare

The Comprehensive Care for Joint Replacement (CJR) was Medicare’s first mandatory bundled payment demonstration. Participating hospitals were accountable for the hospital and 90-day post-hospital costs of patients undergoing hip, knee, or ankle replacement. The evidence suggests that CJR reduced spending, primarily through reductions in institutional PAC, with little impact on outcomes.28,29 The demonstration runs through 2024.

Another large experiment with bundled payment in traditional Medicare is the voluntary Bundled Payments for Care Improvement Initiative (BPCI). Between 2013 and 2018, two BPCI models (called model 2 and model 3) included PAC spending in the targeted episode of care.30 In model 2, participating hospitals or physician groups received one bundled payment for a specified surgical or medical condition, which included an inpatient stay and all related services (including PAC) for 90 days after hospital discharge. In contrast, model 3 participants were PAC providers (mostly SNFs) that assumed responsibility for the costs of all post-hospital care, including PAC, readmissions, emergency care, and outpatient visits, starting on the day of admission to the PAC facility and continuing for 30, 60, or 90 days.

The evidence on BPCI model 2 is encouraging, with evaluations finding reductions in total episode spending with no changes in mortality rates for most episodes.31,32 The spending reductions were largely driven by reduced spending on institutional PAC.

The evidence from BPCI model 3 is less encouraging. In a study limited to patients undergoing lower extremity joint replacement, the model was associated with decreased Medicare spending related to a decrease in average length of SNF stay.33 But a larger study of all conditions in BPCI found no changes in spending or patient outcomes associated with the model, and concerning decreases in spending on frail patients.34 A five-year evaluation found that few SNFs participated in this voluntary model, and that 45% of them withdrew by the end of the initiative.35

In October 2018, CMS replaced the BPCI demonstration with BPCI-Advanced, a nationwide voluntary program with stricter participation rules, in which an episode can begin with an inpatient admission or outpatient procedure. Early data among a limited set of participants shows continued decreased SNF utilization and decreased readmission rates across several conditions.36

What to Expect from Post-Acute Care


Why am I getting a bill from US Acute Care Solutions?

You are receiving a bill because either you or a dependent of yours was a patient at a hospital, emergency room, urgent care center, skilled nursing facility or observation unit. The charges on this bill are for the physician(s) in our group who treated you or a dependent.

What does post-acute care mean?

Following a hospitalization for injury or illness, many patients require continued medical care, either at home or in a specialized facility. Post-acute care refers to a range of medical care services that support the individual’s continued recovery from illness or management of a chronic illness or disability.

What were the medicare and regulatory changes to post-acute care?

For home health agencies (HHAs) and skilled nursing facilities (SNFs), CMS implemented new payment models to better align payment with patients’ care needs rather than the provision of rehabilitation. For long-term acute care hospitals, CMS will now decrease payment for less medically ill patients.

What is Pam in medical terms?

Primary amoebic meningoencephalitis (PAM) is a rare and severe disease caused by a single-celled amoeba called Naegleria fowleri. It causes inflammation and destruction of the brain and the linings of the brain, and is usually fatal. PAM was first described in South Australia in the 1960s.

How to pay for care after hospitalization in an acute care hospital?

One issue in the current discussion is how to pay for care after hospitalization in an acute care hospital, so-called post-acute care (PAC). “ Bundling” post-acute care is an approach that pays a fixed amount for all services provided to a patient after hospitalization for a defined period of time.

Does Medicare pay for acute inpatient hospital care?

Hospitals contract with Medicare to deliver acute inpatient hospital care and agree to accept pre-determined acute care hospital Inpatient Prospective Payment System (IPPS) rates as full payment. The IPPS benefit covers Medicare patients for 90 days of care per episode of illness, with a 60-day lifetime reserve.

What does a hospital actually receive in payment for care?

What a hospital actually receives in payment for care is very different. That is because: For fee-for-service Medicare patients, the U.S. Congress sets hospital payment rates. For fee-for-service Medicaid patients, state governments set hospital payment rates. Private insurance companies negotiate payment rates with hospitals.

Does a hospital pay a fee for service?

Federal laws and regulations require hospitals to maintain uniform charge structures. Payments, however, do not correspond to those charges. What a hospital actually receives in payment for care is very different. That is because: For fee-for-service Medicare patients, the U.S. Congress sets hospital payment rates.

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