A resident on Medicare Part A leaves the skilled nursing facility (SNF) for three days and comes back. Does the facility start over with a new assessment and a lower payment rate, or does the old schedule just continue?
The answer comes down to the Centers for Medicare and Medicaid Services (CMS) interrupted stay policy. An interrupted stay is a Medicare Part A stay in which a resident is discharged from a SNF and resumes Part A covered care at the same SNF within a defined interruption window. According to CMS’s own Long-Term Care Facility Resident Assessment Instrument (RAI) Manual, that window runs three calendar days: the day of discharge and the two days immediately after it.
Land inside that window at the same facility, and the prior assessment and payment schedule continue untouched. Miss it by even a day, or return to a different building, and Medicare treats the return as an entirely new stay.
Quick Summary
The interrupted stay policy decides whether a resident’s return to the SNF continues the current Patient Driven Payment Model (PDPM) assessment schedule, or starts a new one. A same-facility return within three calendar days continues the prior stay: no new 5-day assessment, no reset to the variable per diem. A return after three days, or to a different SNF at all, is always a new stay. Billing uses occurrence span code (OSC) 74 for a continuation and OSC 76 for a longer break. Get the window wrong and the facility either misses a required assessment or bills a rate it cannot defend.
Table of Contents
What Counts as an Interrupted Stay Under PDPM
Under PDPM, the Medicare case mix system that sets a SNF’s daily payment rate for a Part A stay, CMS built in a specific rule for residents who leave and come back. That rule is the interrupted stay policy.
According to CMS’s RAI Manual, an interrupted stay is a Medicare Part A SNF stay in which a resident is discharged from SNF care and subsequently resumes SNF care at the same SNF for a Part A covered stay within the interruption window (Source: AAPACN, citing the RAI Manual). That window is three calendar days: the date of discharge and the two days that follow it, ending at 11:59 p.m. on the third day.
Return inside that window to the same building, and Medicare treats it as one continuous stay, not two. Return outside that window, or to any other SNF regardless of how much time has passed, and the return is always billed as a new stay (Source: FCSO Medicare).
Facilities report the difference on the claim itself using an occurrence span code, or OSC, a billing field that marks a specific date range tied to a coverage event. OSC 74 marks a continuation. A different code applies once the break runs long enough to end the stay.
Same SNF, Different SNF, and the Three-Day Clock
The facility where the resident returns matters as much as the date.
Same SNF, return within three calendar days: the prior assessment schedule picks up exactly where it left off. No new 5-day assessment is required, and the variable per diem, the schedule that triples the non-therapy ancillary portion of payment for the first three days of a stay, does not reset (Source: FCSO Medicare).
Same SNF, return after the window has closed: Medicare treats this as a new stay regardless of how minor the interruption felt on the floor. A new 5-day assessment is required, and the variable per diem resets to day one (Source: FCSO Medicare).
Different SNF, any timing: this is always a new stay. The interrupted stay policy only ever applies to a return to the same facility (Source: PYA, Medicare Payment Primers).
The Detail Most Guides Skip
Most facilities assume the clock starts on the day the resident was admitted to the hospital. It does not. The interruption window counts from the first non-covered Medicare day, which is the day the resident physically left the SNF (Source: AAPACN, citing RAI Manual guidance). What happens at the hospital does not change that count. A resident who spends five days as a hospital outpatient before returning still only has a three-day window measured from the day they left the SNF, not five days of runway.
What Happens to the MDS Assessment and Physician Certification
The Minimum Data Set (MDS) is the standardized clinical assessment CMS requires for every Medicare Part A resident, and it drives the payment classification for the stay. An interrupted stay does not trigger a new MDS. The 5-day assessment already on file continues to apply (Source: FCSO Medicare).
The Minimum Data Set (MDS) is the standardized clinical assessment CMS requires for every Medicare Part A resident, and it drives the payment classification for the stay. An interrupted stay does not trigger a new MDS. The 5-day assessment already on file continues to apply (Source: FCSO Medicare).
Confusing the two schedules is one of the more common ways a facility creates a paper trail that looks noncompliant when the underlying billing was correct.
How to Bill an Interrupted Stay: OSC 74 vs. OSC 76
A Lower Level of Care Change (LLCC) describes a resident who stays in the building but drops below a skilled level of care, then returns to Part A coverage later. LLCC does not automatically follow the same clock as a physical discharge.
If the non-skilled period lasts three consecutive days or less, it is billed the same way as an interrupted stay: OSC 74, no new assessment, no reset (Source: FCSO Medicare). If it runs longer than three days but less than 30, the stay is no longer an interrupted stay at all. It is billed with OSC 76 and value code 31, and it does require a new assessment and a reset variable per diem (Source: FCSO Medicare).
Facilities that only track discharge status at the point a resident physically leaves the building miss LLCC changes entirely, since the resident never walked out the door. The clock on an LLCC starts the day the level of care changed on paper, not the day anyone left the facility.
Why the Occurrence Code Trips Up Even Experienced MDS Coordinators
If your MDS coordinator and your billing office are working from two different mental models of what OSC 74 means, the claim can be technically correct and the assessment schedule can still be wrong.
This happens because Medicare uses the exact same occurrence code for two different scenarios: a genuine interrupted stay and a traditional leave of absence. The two mean different things to the MDS side of the operation, even though billing enters the same code either way (Source: AAPACN).
The post-acute nursing community has logged well over 100 separate questions on this single topic since PDPM began. That volume is a fair signal the confusion is structural, not a training gap at any one facility.
The fix is a single shared reference point. Whoever tracks the discharge date, whether that’s the front desk, admissions, or the Director of Nursing (DON), logs the exact date and reason for every departure the moment it happens. Not after the resident returns.
Even a textbook interrupted stay carries a second trap. A resident discharged home with no return expected, then readmitted within the window, still counts as an interrupted stay under Medicare’s Prospective Payment System (PPS) billing schedule. That same discharge type also requires a new OBRA Admission assessment, a separate resident-assessment schedule set under the Omnibus Budget Reconciliation Act and tracked independently of PPS (Source: AAPACN, citing the RAI Manual).
Getting the interrupted stay call right and still missing the OBRA assessment is not a partial win. Two correct billing decisions do not add up to one complete compliance file, and a surveyor reviewing the record will find the gap regardless of how clean the claim looked.
What This Means at the Front Desk
None of this matters if nobody captures the discharge date the moment it happens. The interruption window is unforgiving. A discharge logged a day late, or a return date guessed instead of recorded, is enough to misclassify the entire stay.
This is an admissions and intake function, not a billing-office cleanup job. The exact date and time a resident’s readmission comes back through the door is exactly the data point the team needs the moment it happens, and it belongs in the same SNF intake and assessment software already tracking referrals and room assignments, not a separate whiteboard or memory.
The rest of what belongs in that resident’s chart once they’re back is already covered in our breakdown of the documentation Medicare reviewers check during a Part A review. No need to rebuild that list here.
Related Rules from the Same Compliance Review
The interrupted stay policy is one of several checks Medicare reviewers run together during a Part A claim review. It sits alongside the three-day qualifying hospital stay rule that determines if the original SNF admission even qualified, and the 30-day transfer window that governs how long a facility has to admit a resident after hospital discharge in the first place.
The interrupted stay policy exists for a specific reason. CMS introduced it alongside PDPM’s five payment components to stop facilities from discharging and readmitting residents purely to reset the tripled non-therapy ancillary payment during the first three days of a stay (Source: AAPACN, citing CMS PDPM policy background). Facilities that memorize the three-day number without knowing why CMS built it are the ones most likely to misapply it when a real scenario does not match the textbook example.
Frequently Asked Questions
It is a Medicare Part A stay in which a resident is discharged from a SNF and resumes Part A covered care at the same SNF within a three-day interruption window, so Medicare treats it as one continuous stay rather than two (Source: AAPACN, citing the RAI Manual).
Three calendar days. The window runs from the day of discharge through 11:59 p.m. on the second day following it (Source: AAPACN, citing the RAI Manual).
No. What matters is whether the resident returns to the same SNF within three calendar days, not what happened at the hospital or how the hospital classified the visit (Source: AAPACN).
Both are reported with the same occurrence code, OSC 74, but they mean different things to the MDS side of the operation. Treating them as identical is a common source of scheduling errors (Source: AAPACN).
A lower level of care change (LLCC) happens when a resident stays in the building but drops below a skilled level of care. If that period lasts three days or less, it is billed like an interrupted stay. Past three days, it requires a new assessment and is billed separately (Source: FCSO Medicare).
As a continuation of the original claim using OSC 74, with no separate claim required unless the break runs longer than three consecutive days at the same facility (Source: FCSO Medicare).
Who This Is Built For
LTC Apps is built for you if:
- You operate a skilled nursing facility and want your admissions team capturing the exact discharge and return data your MDS and billing teams need to make this call correctly
- You are tired of reconstructing a resident’s exact departure date from memory days after the fact
- You want referral and readmission tracking that lives in the same record as the rest of your intake process, not a separate whiteboard or spreadsheet
This is not the right fit if:
- You need software that automatically calculates interrupted stay determinations for you; that decision still belongs to your MDS coordinator
- You are looking for a full MDS or clinical documentation system
- You need one system that also runs your billing and claims submission
What Happens After You Request a Demo
Here is what happens when you request a demo:
- A member of our team reaches out within 1 business day to schedule a call
- We run a 30-minute walkthrough focused on admissions and referral tracking, the module most relevant to this problem
- You get access to pricing specific to your facility size
Most facilities have a clear picture of fit and pricing within one week of reaching out.
Common questions before booking: no long implementation timelines, most facilities are live on their first module within 2 to 4 weeks. No minimum facility size. If you’re mid-contract with another vendor, we can run a parallel evaluation so you’re ready to switch at contract end.
If you operate a skilled nursing facility and want your admissions team capturing readmission data accurately enough for your MDS coordinator to call an interrupted stay correctly the first time, LTC Apps was built for exactly this.
Request a demo, or visit ltcapps.com to explore all 15 modules alongside the rest of the skilled nursing compliance software most facilities are already piecing together by hand.
Most facilities complete their first demo within one week of reaching out.
