The Six Phases of Care: What Are They and How Are They Paid For?

Most of us are familiar – as the result of either our own experiences or those of our loved ones – with the six phases of medical care. Confusion often arises, however, in understanding the differences between these, in terms of both services provided, as well as the implications for insurance coverage.

Using the experiences of my client, Mr. L, as an example, let’s take a look at each of these…

Phase One: Office Visit and Outpatient Care

I met Mr. L. after he’d had a Total Hip Replacement (THR). At our first meeting, he described how he was just finishing up a round of outpatient physical therapy. This phase, characterized by primary care and specialist physician appointments, is the phase in which most of us receive our medical care most of the time.

This care is paid for by both private insurance companies and Medicare, under the office visit, lab/X-ray and/or outpatient benefit.

Phase Two: Acute Hospitalization

Ten months later, following multiple hip dislocations and a fall, Mr. L. required hospitalization in anacute care hospital for surgery involving a revision of his hip. He was now in the acute hospitalization phase of care.

One important element of the ACA is the prevention of hospitalizations when possible and, once hospitalized, minimizing the number of days in the hospital and reducing the risk of re-hospitalization. To achieve this, careful planning must occur. As I described in my January 2014 newsletter, this is a time when a care partner needs to become assertively involved in the planning for discharge by working closely with the hospital-based case manager/discharge planner.

Care in an acute care hospital is paid for by private insurance and Medicare, under the hospital benefit.

Phase Three: Long Term Care Hospital (LTACH)

For the individual not ready to go home, there are a few alternative levels of care available – most people remain unaware of these until they become necessary for themselves or a loved one.

Mr. L., for example, experienced several complications following his surgery, many of which required daily oversight by a physician. In addition, his degree of physical deconditioning required aggressive physical, occupational and speech therapy. It was determined that Mr. L. would be transferred to a long-term care hospital (LTACH) in the Boston area.

Specific criteria must be met to be eligible for this level of care. It too is paid for under the hospital benefit of both private insurance and Medicare.

Phase Four: Skilled Nursing Facility

Another alternative used for individuals who are ready to leave the acute hospital level of care but who are still in need of daily, skilled nursing care and physical rehabilitation (physical, occupational and/or speech therapy) is a skilled nursing facility. These services can be confusing because they are delivered on units dedicated to this level of care but housed within traditional long term care/nursing home settings.

Unlike long-term/custodial care, however, that is not paid for by insurance; skilled nursing facility care is covered by both private insurance and Medicare under a benefit called Skilled Nursing Facility (SNF, pronounced “sniff”). Here as well, very specific criteria must be met for individuals to be initially eligible for this level of care and there are limits associated with it. For that reason, while an individual is receiving these services they are being repeatedly re-assessed to be sure he/she is actively participating and making adequate physical progress.

In Mr. L.’s case, once he stabilized enough to no longer need daily oversight from a physician – but had still not made enough physical progress to go home – he transferred to a SNF. Yet again, plans for discharge began with his Care Partner heavily involved.

It’s at this phase when discussions are sometimes initiated about whether a loved one can return home safely or will need an alternative living arrangement for custodial care (i.e., LTC or nursing home) that is not paid for by private insurance or Medicare. In the event someone has long-term care insurance, portions of custodial care could be covered.

Phase Five: Home Health Care

Home health care is for those who are able to return home but are still fairly ill and considered “homebound.” This phase may include nursing care as well as physical, occupational and speech therapy.

Here too, criteria must be met to be eligible for this level of care; it is paid for by private insurance companies and Medicare under the “Home care benefit.” Providers of this level of care are called “Home Care Companies” (also known as “Visiting Nurse” agencies).

Note that this is not to be confused with private home care services delivered by certified nursing assistants, home health aides and companions for custodial care that are not paid for by private insurance or Medicare.

In Mr. L’s case, he received home health care for approximately six weeks and once he had made enough physical progress to no longer be considered homebound, he reverted to the office visit and outpatient care phase to continue his rehabilitation.

Phase Six: Hospice

Another level of care that is used for those for whom care and comfort become the priority, is Hospice care. It is most often delivered in the home and complements the care provided by family members.

This phase is paid for under a Hospice benefit from private insurers or Medicare. It may also be delivered in inpatient settings, however room and board must be paid for privately unless very specific criteria are met.

Mr. L. progressed quite logically from one level of care to the other, eventually returning back to where he began at Phase One. But keep in mind that in many cases, this sequence does not involve all phases or occur in order. With more and more effort dedicated to coordinating care and preventing hospitalizations, individuals may be accessing care as outpatients but with the assistance of some home care from a visiting nurse or therapist. For others, an acute hospitalization may result in a discharge with no need for home care, moving that person from an acute hospital level of care back to outpatient status.

At all levels of care, certain criteria must be met for coverage eligibility, allowing payment by private insurance, Medicare or some combination. As savvy health care consumers, we all need to understand our respective coverage, so that no surprises occur as each level is being discussed and planned for.