Understanding Post-Acute Discharge Pathways
A resource for new case managers and families navigating next steps after hospitalization
When patients are medically stable enough to leave the hospital—but still require ongoing care—discharge planning shifts to post-acute care options. These are discussions we have with nearly every patient as part of routine discharge planning. Choosing the right level of care depends on clinical needs, functional status, and insurance guidelines.
Below is a breakdown of common discharge destinations, the medical necessity criteria for each, and what Medicare and most insurance plans typically cover.
Home with Outpatient Services
What it is:
Patients return home and travel to appointments for services like physical therapy, occupational therapy, speech therapy, wound care, or lab work.
Medical necessity:
The patient must be clinically stable, have the mobility and support to leave home safely, and benefit from skilled services. Outpatient therapy must be medically necessary for rehabilitation or recovery—not simply for wellness.
Coverage:
Typically covered under Medicare Part B or commercial insurance. Prior authorization may be required for some services (especially PT/OT after a certain number of visits).
Home with Home Health Services
What it is:
Skilled services (nursing, PT/OT/ST, social work, and/or home health aide) delivered at home by a Medicare-certified home health agency.
Medical necessity:
The patient must be considered homebound, meaning leaving home requires considerable effort or assistance, and must need intermittent skilled care. Examples include wound care, new medication management, or rehab following surgery.
Coverage:
Covered under Medicare Part A and B, and most commercial plans, with a physician order and approved care plan. Medicare does not cover 24-hour care, custodial support, or unskilled caregiving under this benefit.
Skilled Nursing Facility (SNF)
What it is:
Inpatient rehab and nursing care, typically for patients recovering from surgery, stroke, infection, or deconditioning.
Medical necessity:
Requires a daily skilled service—either nursing (e.g., IV antibiotics, complex wound care) or rehab (e.g., PT/OT following joint replacement or hospitalization). The patient must have had a qualifying 3-day inpatient hospital stay and be stable for transfer.
Coverage:
Medicare Part A covers up to 100 days:
Days 1–20: fully covered
Days 21–100: copay applies
Commercial insurance often requires prior authorization.
Inpatient Rehabilitation Facility (IRF)
What it is:
A hospital-based rehab setting for intensive therapy and medical supervision—commonly used after stroke, spinal cord injury, or multiple trauma.
Medical necessity:
Patient must tolerate and benefit from at least 3 hours of therapy, 5 days/week, under physician oversight. The patient must have two or more disciplines involved (e.g., PT and OT) and need close medical monitoring.
Coverage:
Covered under Medicare Part A and most commercial plans. Requires documentation of need and functional potential.
Long-Term Acute Care Hospital (LTACH)
What it is:
A hospital-level facility for patients needing extended acute care, usually averaging >25 days of hospitalization. Used for ventilator weaning, complex wound management, or multi-organ failure.
Medical necessity:
Patient must have complex, ongoing medical needs that can’t be managed in a SNF or home setting. These often include frequent interventions, monitoring, and specialty services.
Coverage:
Covered under Medicare Part A as a continuation of inpatient hospital care. Commercial insurance coverage varies and often requires extensive documentation and authorization.
Hospice Care
What it is:
End-of-life care focused on comfort rather than cure, often delivered at home, in facilities, or inpatient settings.
Medical necessity:
The patient must have a life expectancy of 6 months or less, as certified by a physician, and agree to forgo curative treatments for the terminal illness. Services focus on symptom management, spiritual support, and caregiver relief.
Coverage:
Medicare Part A covers hospice care, including nursing, medication, durable medical equipment (DME), social work, and respite care. Most commercial plans have a similar benefit.
Assisted Living, Board & Care, and Memory Care
What it is:
Primarily residential facilities that provide custodial care: help with activities of daily living (ADLs), medication reminders, and meals.
Medical necessity:
Not medically necessary by Medicare standards. These facilities are considered non-skilled and are usually private pay, although some residents may qualify for home health or hospice within the setting if needed.
Coverage:
Medicare does not pay for room and board in these settings. However, home health or hospice services may still be provided in assisted living if medically appropriate and ordered by a physician. Long-term care insurance or Medicaid may help offset costs, depending on the state and policy.
Summary
Medicare covers skilled and medically necessary post-acute care through several structured programs.
Most commercial insurers follow similar structures but often require prior authorization and stricter utilization review.
Clear documentation of medical necessity, clinical stability, and functional status is key to determining the appropriate pathway.
References
Centers for Medicare & Medicaid Services. (2023). Home health services. https://www.medicare.gov/coverage/home-health-services
Centers for Medicare & Medicaid Services. (2023). Skilled nursing facility care. https://www.medicare.gov/coverage/skilled-nursing-facility-care
Centers for Medicare & Medicaid Services. (2023). Inpatient rehabilitation facility services. https://www.medicare.gov/coverage/inpatient-rehabilitation-care
Centers for Medicare & Medicaid Services. (2024). Long-term care hospital services. https://www.medicare.gov/coverage/long-term-care-hospital-services
Centers for Medicare & Medicaid Services. (2023). Hospice care. https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice
Centers for Medicare & Medicaid Services. (2024). Medicare and long-term custodial care. https://www.medicare.gov/coverage/long-term-care
National Council on Aging. (2025). Does Medicare pay for assisted living? https://www.ncoa.org/article/does-medicare-pay-for-assisted-living/
