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CMS grants ACOs easier access to SNF waivers


Medicare accountable care organizations accepting downside financial risk will have easier access to CMS waivers of the rule requiring three-day inpatient stays before patients can be sent to skilled-nursing facilities.

In a guidance published Monday, the CMS laid out requirements for Shared Savings Program ACOs that apply for a waiver of the three-day stay rule. Only ACOs currently participating in or applying to certain Shared Savings Program performance-based risk tracks can apply for waivers, which will take effect July 1, 2019.

To apply, an ACO must provide the CMS with a list of skilled-nursing facilities with which the ACO will partner, along with a SNF affiliate agreement for each facility. Partnering SNFs must have an overall CMS quality rating of three stars or higher.


For the first time, critical-access hospitals and other small rural hospitals operating under swing bed arrangements are eligible to be SNF affiliates. They are not required to have a CMS quality rating. That recognizes that in many rural communities, hospitals are the sole SNF provider.

Only patients who are prospectively attributed by the ACO will be eligible for Medicare coverage without a prior three-day inpatient stay. That will give ACOs an incentive to attribute patients prospectively rather than retrospectively, in order to take advantage of the waiver, said David Muhlestein, chief research officer at Leavitt Partners, who tracks the CMS ACO programs.

The CMS’ goal is to encourage ACOs to move into the newly revised enhanced-risk program, called Pathways to Success, laid out in a final rule last month. The agency said it would grant waivers of the SNF three-day rule “to increase quality and decrease costs.”

The waiver opportunity is not new for risk-bearing Shared Savings ACOs. What is new, said Ashley Ridlon, vice president of health policy at Evolent Health, is the expansion of the waiver availability to ACOs participating in a two-sided model under preliminary prospective assignment with retrospective reconciliation. That will be available in both the Basic tracks, including Levels C, D and E, and the Enhanced track.

The expanded access to waivers is a sweetener to move into risk-bearing tracks, which many ACOs have been reluctant to do. But it’s a pretty marginal inducement, said Mara McDermott, vice president at McDermottPlus Consulting.

“If you take risk, we’ll get out of your way and give you additional tools to manage your patient population in the most clinically appropriate way,” is how she described the message from the CMS. “My sense is this isn’t a dealmaker for ACOs to participate, but it’s a nice thing to have.”

The CMS final rule and guidance makes it easier for ACOs to understand and apply for the waivers, and expands access to treatment for patients, said Shira Hollander, senior associate director of policy development at the American Hospital Association.

The new rule and guidance likely will increase the number of ACOs applying for and receiving waivers, because under the Pathways for Success program more ACOs will be participating in the downside-risk track of the Shared Savings Program, Muhlestein said.

The expanded access to waivers could somewhat ease the financial crunch for SNFs, which see ACOs as squeezing their admissions and lengths of stay to meet cost targets and receive a bonus from Medicare.

A study published in the American Journal of Accountable Care last year, co-authored by Muhlestein, found that Shared Savings ACOs cut SNF spending as a proportion of total spending even as spending on other inpatient care rose. It said the ACOs that improved their saving rate most rapidly were those that shifted inpatient and SNF spending toward physician services.