CMS Spells Out Expanded Skilled Nursing Waiver Requirements for ACOs

The Centers for Medicare & Medicaid Services (CMS) provided details this week on what accountable care organizations (ACOs) have to do to receive waivers of the three-day inpatient stay requirement for skilled nursing care in updated guidance.

ACOs consist of hospitals, physicians, and other health care providers that band together to provide care to Medicare fee-for-service beneficiaries. The Medicare Shared Savings Program (MSSP) rewards ACOs that improve care quality and efficiency, and CMS recently overhauled the rules for ACOs by removing the no-risk tracks that had allowed ACOs to operate without assuming risk — a program that CMS has dubbed “Pathways to Success.”

Only ACOs that have assumed some amount of risk or are applying to be in a risk track can apply for the three-day waivers, though this was a requirement even before the overhaul, noted Brian Ellsworth, vice president for public policy and payment transformation at the Minnetonka, Minn.-based consulting firm Health Dimensions Group. And because the majority of MSSP ACOs were not in such tracks, not many had been able to use the three-day waivers, he told SNN.


“The three-day waiver, by its nature, is not necessarily a wholesale change,” he said. “It’s kind of an opportunity at the margins to increase SNF care for certain folks that would otherwise be hospitalized. As a practical [point], it isn’t a huge thing, but it’s a nice tool in the toolbox for the ACOs and for the SNFs to increase their value proposition, relative to the ACOs.”

Specifically, ACOs are eligible to apply for the SNF Three-Day Rule waiver if they are applying to participate in the MSSP Levels C, D, or E of the BASIC track or the ENHANCED track, both of which were created as part of the Pathways to Success overhaul. The BASIC track allows eligible ACOs to begin under a one-sided model and incrementally move into higher risk levels. The ENHANCED track is based on the MSSP’s Track 3, which has the possibility of gain or loss for participating organizations.

In addition to meeting the specific eligibility criteria, ACOs have to submit a SNF affiliate list and sample SNF affiliate agreements to apply for the waiver. They also must complete a SNF affiliate agreement for every proposed partner — as well as completing an agreement table in the ACO Management System — and submit plans for communication, beneficiary evaluation and admission, and care management.


SNF affiliates must maintain an overall rating of three stars or more on the CMS Five-Star Quality Rating System in order to participate in the ACO models.

Under the recently finalized Pathways rules, most new ACOs will have just two years to operate without taking on risk, and by making it easier to apply for the three-day stay waivers, CMS seems to be trying to increase the incentive for ACOs to take on that downside.

“In the context of the whole Pathways proposal, they’re intending to streamline the system and create these risk tracks that get you to downside risk quicker and sweeten the pot if you do get to downside risk quicker,” Ellwsorth said.

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