Improving Access to Medicare Coverage Act of 2026

Key Points

• Medicare currently requires patients to be officially admitted as inpatients for at least 3 days before it will cover skilled nursing facility (nursing home) care. Many seniors spend days in hospital beds under "observation" status without realizing it, and that time doesn't count toward the 3-day rule, leaving them with huge out-of-pocket bills for follow-up care.
• This bill would fix that gap by making any time spent under outpatient observation in a hospital count toward the 3-day inpatient stay requirement. In practice, this means seniors who were placed on observation status would still qualify for Medicare-covered nursing home care after discharge.
• The new rule would apply retroactively to hospital observation stays starting on or after January 1, 2026. People who already finished their care and paid out of pocket could file an appeal within 90 days of the bill becoming law to potentially get reimbursed.
• The bill was introduced by Sen. Collins with bipartisan support from Sen. Welch and Sen. Capito. It has been referred to the Senate Finance Committee. The bill also gives the Secretary of Health and Human Services flexibility to implement the change quickly through an interim final regulation or program instruction.