The main clause action refers to the past and it is the reason of choosing'' needed'' . The doctor said that Tom was too sick to go to work and that he needed to stay at home for a couple days.
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Grammar GeekThe doctor says, "You are too sick to go to work and you need to stay home."The doctor said that he is too sick and needs to stay home.orThe doctor said that he was too sick and needed to stay home.You shouldn't mix the tenses - either backshift to was/needed or keep it in the present (test taking strategies aside), but don't say "was/needs" or "is/needed."