August 12, 2016

Medicare Shared Savings Program: Skilled Nursing 3-day Waiver Application

By Melissa Korey, Supervisor, Advisory Services

Medicare Shared Savings Program: Skilled Nursing 3-day Waiver Application Tax & Business

Last spring, the Centers for Medicare and Medicaid Services (CMS) posted the application for an exception to the 3-day inpatient hospital stay requirement for Skilled Nursing Facilities (SNFs) for Track 3 Accountable Care Organizations (ACOs). The purpose of this waiver is to increase quality and decrease costs by improving transitions between care settings. Upon CMS approval, participating ACOs will be able to waive the 3-day stay requirement for dates of service on or after January 1, 2017.

SNFs who wish to participate in the waiver program with their ACO must meet the following competencies, have a signed written agreement with the ACO and have an overall quality rating of three or more stars under the five-star quality rating system. In addition, in order to provide SNF covered services under the waiver, the individual must be prospectively assigned to the ACO for the performance year in which that individual is admitted to the SNF. This particular requirement poses an issue for participating SNFs and their residents. If the individual should lose Part B coverage, he or she would no longer qualify for the ACO program and thus would not be eligible under the 3-day waiver.

In the Physician Fee Schedule Proposed Rule, published on July 7, CMS recognized the need to implement protection policies for this particular situation and is considering a 90-day grace period for nursing facility claims following the date that CMS delivers the quarterly exclusion list to the ACO. For situations that fall outside the 90-day grace period and are not coverable by the SNF, CMS is considering the following:

  • The SNF would not be eligible for payment beyond the 90-day grace period.
  • The beneficiary could not be charged for expenses incurred for services provided.
  • If the SNF collected money during the beneficiary’s stay, the funds must be returned.
  • The ACO will be required to submit a corrective action plan to CMS for approval.

If you wish to submit comments on the proposed regulations for the 3-day waiver, you may submit them electronically at with the reference CMS-1654-P. CMS is seeking comments until 5 p.m. on September 6, 2016.

If you have questions regarding the 3-day waiver application or how this policy will affect your intake process, please contact Marcum LLP.

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