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Unless your Dad has long-term-care insurance, the cost will be out of pocket. Agency costs on average are $25 per hour depending on where you live and the cost-of-living in your area, thus if the wife is away 10 hours at work [including commuting time], the cost would be $250 per day. Yes, that's expensive but he would get good care.
Social services deal with these issues every day and they will have to put a plan in place to have him transferred to a facility. You stay clear on being there and having him in a wheelchair looking all pitiful and you give in and take him back home. Do what you can to support his wife in all this as she may relent and take him back. The hospitals default is to move the issue back to family if at all possible - then it's your & her problem. Don't let that happen.
Now if your parents can private pay for care in a NH & have oodles of $$$, then he's going to have to go that route for payment. But if his wife is somewhat a younger and healthier second wife, she is going to be able to considered the "community spouse" for Medicaid. CS situations are really a lot more complex of a Medicaid application than that for a widow or widower. Really she needs to speak with a NAELA level elder law atty asap. Now one issue with CS Medicaid is that their assets have a "snapshot" day in which their assets are fixed or tied to. If she needs to move $ around or change things or pay off stuff, all this has to be done before the Medicaid application is filed & the snapshot is taken. Comprende? My suggestion is to tell social services that he will go into the NH as private pay but will transition to Medicaid within 90 days. So they find him a bed in a Nh that takes Medicaid. It may not be your optimum first place choice, but you need to find a bed and get whatever done to get him onto Medicaid and wife as his CS done. You and his wife (I'm assuming it's not your mom, but perhaps not?) need to become Team Dad and work together to get whatever done to get him onto Medicaid but provide for wife to be a CS and not herself become impoverished.
Why the no release to a rehab center? Is it because he did not progress within the 21 days from the first time he was in rehab (the first 21 is covered by Medicare from a hospitalization) and that since it may not be enough time between incidents Medicare will not pay? Or is it that he is actually not hospitalized but is under "observation" at the hospital so that there is no discharge to rehab option available as he is not actually hospitalized. btw the whole "observation" is a huge issue for anyone dealing with medical costs as observation is not at all covered like a hospitalization is for Medicare and other health insurance policies.
If you can, see if you can speak with rehab at the old facility to see what Dad was like while there & under Medicare. You will need to have either DPOA or HIPPA clearance to do this but if his wife does then she requests it and you go with her to either speak to therapists or get copies of his medical file to get a better understanding on what's what.
Good luck and try not to get too overwhelmed & take a break often.