Medicare & Insurance Basics

Medicare Parts A & B

Medicare Part A covers a patient who has had a qualifying three-night hospital stay and is at your facility for short-term, medically necessary care (including rehab services five days/week). This can be a mix of speech, physical, and occupational therapy.

Medicare A covers up to 100 days of skilled services:

• Days 1–20: 100% covered.
• Days 21–100: Coinsurance of $217/day.
• Day 101+: Patient is responsible for 100% of the cost.

Medicare Part B covers outpatient therapy services. When a patient is receiving long-term care (custodial care) in a skilled nursing facility, therapy is billed under Medicare B (as you are seeing them in their “home”). Medicare pays for 80% of services, leaving the patient with a 20% copay.

A secondary insurance is an optional, second insurance that someone can purchase that pays the remaining 20% copay not covered by insurance.

Managed Care Plans

Managed Care means the patient has a private insurance plan that replaces their traditional Medicare plan (e.g., Humana, United, etc.).

Managed Care Part A This is for short-term stays following a qualifying three-night hospital stay. It requires pre-authorization from the insurance company. Every 3–7 days, the insurer reviews nursing and rehab notes to determine if the patient needs continued services. If the insurer decides the patient is ready to go home, they are “cut.” Patients have the right to appeal this decision.

Managed Care Part B This covers outpatient services for long-term care residents. Some patients require pre-authorization after your evaluation before treatment can begin. Your Director of Rehab is responsible for managing these authorizations and will notify you if a patient has a visit limit or requires new approvals.

Important: My patient is long-term care, but their insurance is Medicare A. How does this work?

Patients in long-term care can still access their Medicare A benefit if they are hospitalized and have a qualifying three-night stay. Once they no longer require skilled nursing or therapy, they will be given a Notice of Medicare Non-Coverage, which communicates that their skilled benefit is ending. If additional Speech Therapy is warranted after this date, you can continue to see them under Part B.

Medicaid

Medicaid is a government health insurance program for people with limited income and resources. In a skilled nursing facility, Medicaid primarily pays for custodial (long-term) care once a resident is financially eligible. Residents with Medicaid only (including those under age 65) receive coverage for outpatient therapy services through their state’s Medicaid program, with requirements and limitations varying by state.

If a resident also qualifies for Medicare due to age (over 65) or disability, Medicare is typically the primary payer for covered skilled therapy services, and Medicaid may act as the secondary payer to cover certain cost-sharing amounts or additional benefits, depending on state rules. For residents over age 65 who have both Medicare and Medicaid (dual eligible), Medicare generally covers therapy under Part A (during a qualifying SNF stay) or Part B (for outpatient therapy), while Medicaid typically helps cover long-term care costs, copayments, or services not covered by Medicare.