Many Medicare patients spend multiple nights in a hospital under "observation status" rather than as formal inpatients. Hospitals place patients on observation status for a variety of medical and administrative reasons, but the distinction carries major financial consequences: Medicare only covers skilled nursing facility (SNF) care — like rehabilitation after surgery or a stroke — after a patient has been formally admitted as a hospital inpatient for at least three days. Patients held under observation status don't meet that requirement, leaving them responsible for thousands of dollars in nursing home bills they expected Medicare to cover. This bill fixes that gap by counting observation-status hospital time toward the three-day inpatient requirement, retroactive to January 1, 2026. Medicare patients who were denied SNF coverage during that period can file an administrative appeal within 90 days of the bill's enactment to reclaim those costs.
Average Household Impact
- Medicare SNF coverage access — Observation-status hospital time counted toward 3-day inpatient requirement
- Retroactive appeals window — 90-day window to contest SNF coverage denials for services since January 1, 2026
Congressional Summary
Improving Access to Medicare Coverage Act of 2026This bill deems an individual receiving outpatient observation services in a hospital as an inpatient for purposes of satisfying the three-day inpatient hospital-stay requirement with respect to Medicare coverage of skilled nursing facility (SNF) services. (Generally, individuals must have been an inpatient at a hospital for at least three days in order to qualify for SNF services. An individual's time spent under observation at a hospital for purposes of determining whether the individual should be admitted does not count towards this requirement.)
Details
- Congress
- 119th
- Chamber
- Senate
- Status
- summarized
- Action
- Introduced in Senate
- Action Date
- 2026-05-21
- Date Added
- 2026-06-30
- Source
- Congress.gov →
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