Skilled Nursing Facility 3- Day Rule Waiver

CMS is waiving the requirement in Section 1812(f) of the Social Security Act for a 3-day prior hospitalization for coverage of a skilled nursing facility (SNF 3-Day Rule Waiver) stay. This provides temporary emergency coverage of SNF services without a qualifying hospital stay for those who need to be transferred as a result of a disaster or emergency.

In addition, for certain beneficiaries who recently exhausted their SNF benefits, it authorizes renewed SNF coverage without first starting a new benefit period. Second, CMS is waiving 42 CFR 483.20 to relieve SNFs on the Minimum Data Set assessments and transmission timeframe requirements.

Background of Skilled Nursing Facility 3-Day Rule Waiver

Under the Shared Savings Program, the Centers for Medicare & Medicaid Services (CMS) enters into a participation agreement with each participating Accountable Care Organization (ACO). CMS will reward eligible ACOs when they lower growth in Medicare Parts A and B fee-for-service (FFS) costs (relative to their ACO-specific benchmark) and meet performance standards on quality of care.

The SNF 3-Day Rule Waiver waives the 3-day inpatient hospital stay requirement before a Medicare-covered, post-hospital, extended-care service for eligible beneficiaries. Only Shared Savings Program ACOs currently participating in or applying to certain Shared Savings Program performance-based risk tracks have the opportunity to apply for a waiver of the SNF 3-Day Rule, and they must apply separately for the waiver during the annual application process.

To apply for an SNF 3-Day Rule Waiver, ACOs must:

• Meet specific eligibility criteria;
• Submit an SNF Affiliate List;
• Submit sample SNF Affiliate Agreement(s);
• Complete the SNF Affiliate Agreement table in the ACO Management System (ACOMS);
• Submit an executed SNF Affiliate Agreement for each proposed SNF affiliate and
• Submit a communication plan, beneficiary evaluation and admission plan, and a care management plan.

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Overview of the Skilled Nursing Facility 3-Day Rule Waiver

To support ACOs’ efforts to increase quality and decrease costs, CMS finalized a waiver of the SNF 3-Day Rule for eligible ACOs participating in specific performance-based risk initiatives of the Shared Savings Program (§ 425.612). Eligible ACOs may apply for an SNF 3-Day Rule Waiver during their agreement period or at the time of application to participate in the program.

ACOs, including those applying for a waiver during an existing participation agreement term, must follow the annual application process. For PY 2019, SNF 3-Day Rule Waivers are effective beginning July 1 following approval of an SNF 3-Day Rule Waiver Application.

Applications for an SNF 3-Day Rule Waiver in subsequent years will have an effective date of January 1 of the performance year following approval. Once approved, an ACO will maintain its SNF 3-Day Rule Waiver for the remainder of its current participation agreement unless CMS determines it is necessary to revoke the ACO’s waiver as provided in § 425.612(d)(3) or under the terms of the Track 1+ Model.

Suppose CMS or the ACO terminates the ACO’s participation agreement. In that case, the waiver ends on the date specified by CMS in the termination notice or on the effective date of termination, as defined in the ACO’s advance written notice to CMS required under § 425.220.

It is important to note that an SNF 3-Day Rule Waiver does not create a new benefit or extend Medicare SNF coverage to patients who could be treated in outpatient settings or who require long-term custodial care. The waiver is intended to provide ACOs participating in certain performance-based risk tracks with additional flexibility to increase quality and decrease costs.

The SNF benefit itself remains unchanged. The SNF 3-Day Rule Waiver only applies to services furnished in SNFs that meet the eligibility requirements in § 425.612, discussed below in Section 4.

The SNF 3-Day Rule Waiver does not restrict a beneficiary’s choice of provider or supplier. A beneficiary continues to have the option to seek care from any Medicare FFS provider or supplier, including from an SNF or other facility that is not an affiliate of an ACO participating in the Shared Savings Program. In such circumstances, standard Medicare requirements apply, including a 3-day inpatient hospitalization requirement.

Applying for the Skilled Nursing Facility 3-Day Rule Waiver

Necessary steps to apply for an SNF 3-Day Rule Waiver include:

• Submit a Notice of Intent to Apply (NOIA) for an SNF 3-Day Rule Waiver.
• Submit an SNF 3-Day Rule Waiver Application.

Applicants must submit their applications through ACO-MS under the guidance provided on the Application Toolkit webpage. The Shared Savings Program Application Types & Timeline webpage contains an up-to-date list of all applicable deadlines.

ACOs receive multiple requests for information (RFI) notifications summarizing CMS’ review of submitted application information during the application process. ACOs should carefully review the RFIs sent by CMS because they only have a few opportunities to correct deficiencies identified in the submitted application information.

Skilled Nursing Facility 3-Day Rule Waiver Medicare Claims Processing

SNF waiver-approved ACOs must comply with all Medicare claims submission requirements, except for a 3-day inpatient hospital stay before a Medicare-covered, post-hospital, extended care service (42 CFR § 425.612(a)). An SNF 3-Day Rule Waiver does not change FFS billing requirements (other than the 3-day inpatient stay requirement).

SNFs do not include new data elements when submitting FFS claims to indicate their intent to use an SNF 3-Day Rule Waiver. For institutional claims, CMS will set the Demonstration Number field to “77” for claims that meet all of the following conditions:

• Received” date on the claim is on or after January 1 of the calendar year indicated on the claim’s “From” date;
• A CCN (first 6 digits) is found on the claim that is also found on the ACO’s certified SNF Affiliate List;
• Beneficiary Health Insurance Claim Number (HICN) found on the claim, which is also found on the ACO’s assignment list;
• The date of service “From” date on the claim is on or after the effective start date of a waiver, and
• The ACO ID (AXXXX) associated with the SNF affiliate is the same as the ACO ID associated with the eligible beneficiary.

Suppose an SNF claim is rejected exclusively due to a lack of a qualifying hospital stay, meaning all other Medicare FFS coverage, claims processing, and other applicable requirements are met. In that case, the SNF should verify that the ACO, SNF, and beneficiary meet waiver eligibility requirements under § 425.612, described above.

Suppose the ACO, SNF, and beneficiary meet these eligibility requirements. In that case, the SNF should contact its MAC to inquire about payment for the claim under the terms of the SNF 3-Day Rule Waiver under the Shared Savings Program. In case of any issues billing for Skilled Nursing Facility Services, contact MBC at 888-357-3226/ info@medicalbillersandcoders.com.

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