Medicare covers treatment that is medically reasonable and necessary during a benefit period. Medicare beneficiaries are entitled to 90 days of coverage per benefit period (although each Medicare beneficiary has a 60 day lifetime reserve that can be used to extend coverage). The skilled nursing facility coverage provided through Medicare Part A (following a qualifying hospital stay) is limited to 100 days per spell of illness. Part A coverage for home health services is also limited to 100 days, although Part B may provide additional coverage. Coverage for in-patient stays in a psychiatric hospital is limited to a lifetime maximum of 150 days. Regarding hospice, 42 U.S. Code § 1395d(a)(4) provides: “in lieu of certain other benefits, hospice care with respect to the individual during up to two periods of 90 days each and an unlimited number of subsequent periods of 60 days each with respect to which the individual makes an election under subsection (d)(1).”

A benefit period is the period of time when Medicare provides coverage for a speficic claim. 42 C.F.R. § 409.60 states

(a) When benefit periods begin. The initial benefit period begins on the day the beneficiary receives inpatient hospital, inpatient CAH, or SNF services for the first time after becoming entitled to hospital insurance. Thereafter, a new benefit period begins whenever the beneficiary receives inpatient hospital, inpatient CAH, or SNF services after he or she has ended a benefit period as described in paragraph (b) of this section.

(b) When benefit periods end – (1) A benefit period ends when a beneficiary has, for at least 60 consecutive days not been an inpatient in any of the following:

(i) A hospital that meets the requirements of section 1861(e)(1) of the Act.

(ii) A CAH that meets the requirements of section 1820 of the Act.

(iii) A SNF that meets the requirements of sections 1819(a)(1) or 1861(y) of the Act.

(2) For purposes of ending a benefit period, a beneficiary was an inpatient of a SNF if his or her care in the SNF met the skilled level of care requirements specified in § 409.31(b) (1) and (3).

(c) Presumptions.

(1) For purposes of determining whether a beneficiary was an inpatient of a SNF under paragraph (b)(2) of this section –

(i) A beneficiary’s care met the skilled level of care requirements if inpatient SNF claims were paid for those services under Medicare or Medicaid, unless:

(A) Such payments were made under § 411.400 or Medicaid administratively necessary days provisions which result in payment for care not meeting the skilled level of care requirements, or

(B) A Medicare denial and a Medicaid payment are made for the same period, in which case the presumption in paragraph (c)(2)(ii) of this section applies;

(ii) A beneficiary’s care met the skilled level of care requirements if a SNF claim was paid under section 1879(e) of the Social Security Act;

(iii) A beneficiary’s care did not meet the skilled level of care requirements if a SNF claim was paid for the services under § 411.400;

(iv) A beneficiary’s care did not meet the skilled level of care requirements if a Medicaid SNF claim was denied on the grounds that the services were not at the skilled level of care (even if paid under applicable Medicaid administratively necessary days provisions which result in payment for care not meeting the skilled level of care requirements);

(2) For purposes of determining whether a beneficiary was an inpatient of a SNF under paragraph (b)(2) of this section a beneficiary’s care in a SNF is presumed –

(i) To have met the skilled level of care requirements during any period for which the beneficiary was assigned to one of the Resource Utilization Groups designated as representing the required level of care, as provided in § 409.30.

(ii) To have met the skilled level of care requirements if a Medicaid or Medicare claim was denied on grounds other than that the services were not at the skilled level of care;

(iii) Not to have met the skilled level of care requirements if a Medicare SNF claim was denied on the grounds that the services were not at the skilled level of care and payment was not made under § 411.400; or

(iv) Not to have met the skilled level of care requirements if no Medicare or Medicaid claim was submitted by the SNF.

(3) If information upon which to base a presumption is not readily available, the intermediary may, at its discretion review the beneficiary’s medical records to determine whether he or she was an inpatient of a SNF as set forth under paragraph (b)(2) of this section.

(4) When the intermediary makes a benefit period determination based upon paragraph (c)(1) of this section, the beneficiary may seek to reverse the benefit period determination by timely appealing the prior Medicare SNF claim determination under part 405, subpart G of this chapter, or the prior Medicaid SNF claim under part 431, subpart E of this chapter.

(5) When the intermediary makes a benefit period determination under paragraph (c)(2) of this section, the beneficiary will be notified of the basis for the determination, and of his or her right to present evidence to rebut the determination that the skilled level of care requirements specified in § 409.31 (b)(1) and (b)(3) were or were not met on reconsideration and appeal under 42 CFR, part 405, subpart G of this chapter.

(d) Limitation on benefit period determinations. When the intermediary considers the same prior SNF stay of a particular beneficiary in making benefit period determinations for more than one inpatient Medicare claim –

(1) Medicare will recognize only the initial level of care characterization for that prior SNF stay (or if appealed under 42 CFR part 405, subpart G of this chapter, the level of care determined under appeal); or

(2) If part of a prior SNF stay has one level of care characterization and another part has another level of care characterization, Medicare will recognize only the initial level of care characterization for a particular part of a prior SNF stay (or if appealed under 42 CFR part 405, subpart G of this chapter, the level of care determined under appeal).

(e) Relation of benefit period to benefit limitations. The limitations specified in §§ 409.61 and 409.64, and the deductible and coinsurance requirements set forth in subpart G of this part apply for each benefit period. The limitations of § 409.63 apply only to the initial benefit period.

Intregral to determination of a benefit period is the term “spell of illness.” 42 U.S. Code § 1395x(a) defines a spell of illness as follows:

The term “spell of illness” with respect to any individual means a period of consecutive days—

(1) beginning with the first day (not included in a previous spell of illness) (A) on which such individual is furnished inpatient hospital services, inpatient critical access hospital services or extended care services, and (B) which occurs in a month for which he is entitled to benefits under part A, and

(2) ending with the close of the first period of 60 consecutive days thereafter on each of which he is neither an inpatient of a hospital or critical access hospital nor an inpatient of a facility described in section 1395i–3(a)(1) of this title or subsection (y)(1).

Once coverage is exhausted during a spell of illness, there is no additional coverage until a new spell of illness (and benefit period) begins. 42 U.S. Code § 1395d(b) expressly provides that payment under this part for services furnished an individual during a spell of illness may not (subject to subsection (c)) be made for—

(1) inpatient hospital services furnished to him during such spell after such services have been furnished to him for 150 days during such spell minus 1 day for each day of inpatient hospital services in excess of 90 received during any preceding spell of illness (if such individual was entitled to have payment for such services made under this part unless he specifies in accordance with regulations of the Secretary that he does not desire to have such payment made);

(2) post-hospital extended care services furnished to him during such spell after such services have been furnished to him for 100 days during such spell; or

(3) inpatient psychiatric hospital services furnished to him after such services have been furnished to him for a total of 190 days during his lifetime.
Payment under this part for post-institutional home health services furnished an individual during a home health spell of illness may not be made for such services beginning after such services have been furnished for a total of 100 visits during such spell.

In Matthews v. Leavitt, 452 F.3d 145 (2nd Cir. 2006), a Medicare beneficiary argued that his 100 day skilled nursing benefit should be extended by an additional 38 days when he was forced to return to the nursing home as a result of alleged malpartice. The Court rejected his argument that alleged malpractice somehow extended the benefit period. In Mayburg v. Secretary of HHS, 740 F.2d 100 (1st Cir. 1984), the Court said “This language seems to say that the “spell of illness” clock begins to tick when one first receives covered services; and it is not turned off and reset unless, and until, one is no longer (“an inpatient of a hospital” or) “an inpatient of a skilled nursing facility” for at least sixty days.”

In Mayburg, the question presented was whether a permenant resident of a nursing home can have a new spell of illness, or whether her continued residence in the home prevents the spell of illness clock from resetting.

This asks how this language applies to a person who lives in a skilled nursing facility, a very old person who receives no medical treatment at the facility, but who can no longer be kept at home. Does her “spell of illness” clock, once started, never turn off? Once she uses up the full treatment allowance offered for a single “spell of illness” (and a lifetime reserve), is she out of luck? The Department of Health and Human Services (“HHS”) believes so. It has long interpreted the words “inpatient of a skilled nursing facility” to include one who receives only “custodial” care in the facility, i.e., one who simply lives there. And HHS believes that such people consequently cannot reset the “spell of illness” clock.

HHS took the position that the clock never resets, so no additional Medicare Part A coverage was available so long as the resident was in the nursing home. The district court disagreed and, on appeal, the district court was affirmed.