Skilled Nursing Facility (SNF) Denied by Medicare? How to Appeal

Medicare skilled nursing facility (SNF) denials are among the most common and consequential Medicare denials — often occurring precisely when a patient needs post-hospital rehabilitation and cannot safely return home. If Medicare has denied SNF coverage for your care, you have significant appeal rights under federal law, including the powerful Jimmo v. Sebelius settlement that many facilities and insurers do not proactively mention.

Why Medicare Denies SNF Coverage

Three-day inpatient rule not met. Medicare Part A covers SNF care only when the patient had at least 3 consecutive calendar days as an inpatient in a qualifying hospital (not counting the discharge day). If you were admitted on "observation status" — classified as an outpatient even if you spent multiple nights — those days do not count toward the qualifying stay. Many patients are shocked to discover that a 4-day hospital stay did not meet the 3-day rule because they were on observation status throughout.

Skilled care no longer required. Medicare denies or terminates SNF coverage when the plan or contractor determines the patient no longer needs skilled nursing care or skilled rehabilitation therapy provided by licensed professionals. The Jimmo v. Sebelius settlement (2013) clarified that Medicare cannot deny SNF coverage solely because the patient is not improving or has reached a plateau — coverage is required when skilled care is needed to maintain current function or prevent deterioration.

Condition not related to qualifying hospitalization. SNF care must be for the same condition as the qualifying hospital stay or for a condition that arose during the SNF stay. If Medicare argues the SNF condition is unrelated to the hospitalization, document the clinical connection and the active medical needs being addressed.

Medicare Advantage SNF denials. Medicare Advantage plans apply their own clinical criteria (typically InterQual or MCG) for SNF coverage. These can be more restrictive than original Medicare's criteria, but MA plans must still comply with CMS coverage rules and cannot apply criteria that are inconsistent with original Medicare coverage requirements.

Observation status misclassification. Hospitals sometimes classify patients as observation status to manage reimbursement risk, even when the clinical indicators support inpatient admission. This misclassification directly harms patients by preventing the qualifying inpatient days needed for SNF coverage.

How to Appeal a Medicare SNF Denial

Step 1: Request a BFCC-QIO Expedited Review — Act Immediately

If coverage is ending or you are being told to leave the hospital or SNF: contact your Beneficiary and Family Centered Care Quality Improvement Organization (BFCC-QIO) immediately by calling 1-800-MEDICARE. The QIO must review discharge decisions within 1 business day. You cannot be held financially responsible for hospital or SNF days during the QIO review. For SNF coverage ending: the SNF must give you a Notice of Medicare Non-Coverage (NOMNC) at least 2 days before Medicare coverage ends, and you have the right to request QIO review by noon of the day before coverage ends.

Step 2: Challenge Observation Status if the 3-Day Rule Was Not Met

If your hospital stay included observation status days that prevented you from qualifying for SNF coverage: request a formal review of your admission status from the hospital. Contact your treating physician — they may be able to document why inpatient admission criteria were met under the Medicare 2-Midnight Rule (42 CFR § 412.3). File a Medicare appeal through the Medicare Administrative Contractor (MAC) redetermination process, which is the first of the 5-level Medicare appeal process.

Step 3: Invoke the Jimmo v. Sebelius Settlement for Maintenance Care Denials

If coverage is being denied because you are not improving or have plateaued, invoke the Jimmo settlement directly. The exact language to use: "Pursuant to the Jimmo v. Sebelius Settlement Agreement (2013), Medicare coverage for skilled care may not be denied solely because [patient] is not improving or has reached a functional plateau. [Patient] requires ongoing skilled [nursing/PT/OT/SLP] to maintain [specific function] and prevent decline to [specific worse outcome — aspiration pneumonia, falls, pressure ulcer, deconditioning]."

Step 4: Document All Skilled Services

For appeals that SNF care is no longer necessary: your SNF's therapy and nursing team must document every skilled service being provided. Include: skilled nursing (IV medications, wound care, complex medication management, catheter care, monitoring of unstable conditions), physical therapy (functional goals with measurable outcomes), occupational therapy (ADL retraining, home safety assessment), and speech-language pathology (dysphagia management). Document baseline functional status using FIM scale scores and specific measurable goals — even maintenance goals.

Step 5: File the Standard 5-Level Medicare Appeal

If coverage has already been denied or ended: request a redetermination from the MAC within 120 days of the claims denial notice (MSN). If redetermination is unfavorable: request reconsideration by a Qualified Independent Contractor (QIC) within 180 days. If reconsideration is unfavorable: request a hearing before an Administrative Law Judge (ALJ) at the Office of Medicare Hearings and Appeals (OMHA) within 60 days. Each level provides an independent review of your case.

Step 6: Limitation on Liability Protection

If you were told by the SNF that Medicare would continue to cover care and you relied on that representation, request a Limitation on Liability (LOL) determination. If the LOL is granted, you cannot be held responsible for the denied charges because you lacked reason to know coverage would not be provided.

What to Include in Your SNF Medicare Appeal

• Notice of Medicare Non-Coverage (NOMNC) or denial notice
• SNF therapy and nursing documentation showing all skilled services provided with functional goals and baseline FIM scores
• Jimmo settlement citation if the denial is based on lack of improvement or a plateau
• Physician letter documenting medical complexity: unstable conditions, medication complexity, wound care requirements
• For observation status disputes: evidence of inpatient-level clinical indicators at the time of the hospital admission decision

Fight Back With ClaimBack

Medicare SNF denials based on "no improvement" or "no longer skilled" determinations are among the most reversible Medicare decisions when appeals cite the Jimmo settlement and document the skilled nursing and therapy services being provided. ClaimBack generates a professional appeal letter in 3 minutes. Start your free claim analysis → Free analysis · No credit card required · Takes 3 minutes

Related Reading

• How to Write an Insurance Appeal Letter
• What Is Medical Necessity?
• Internal vs External Insurance Appeal