MedPAC: ACOs should be allowed to waive 3-midnight requirement for Medicare skilled nursing coverage

nurse taking care of elderly man in nursing homeAccountable care organizations should be able to place patients in skilled nursing facilities more quickly and communicate which SNFs are preferred providers, the Medicare Payment Advisory Commission stated in a letter to a top government health official.

The fee-for-service Medicare program currently covers skilled nursing services for beneficiaries only after they spend three midnights as a hospital inpatient. However, this rule does not apply to providers in the Pioneer ACO program, and the exemption should be extended to those in the Medicare Shared Savings Program as well, MedPAC commissioners urged in their June 16 letter to Centers for Medicare & Medicaid Services Administrator Marilyn Tavenner.

ACO providers also should be able to tell patients which post-acute care providers they deem best, the letter stated. Currently, providers in ACOs are not sure if they are allowed to make these recommendations and are “presenting all options equally,” according to the commissioners. This is likely due to fear of being perceived as violating anti-kickback laws.

“Where there is wide variation in terms of cost and quality, beneficiaries should retain the their choice of whichever PAC provider they would like, but the ACOs providers should have the ability to clearly state which providers they believe are best and why,” they wrote.

These changes should only apply to ACOs that take on “two-sided risk,” MedPAC emphasized. All Pioneer ACOs already carry this type of risk, as they both could earn bonus payments or see reimbursements shrink, depending on whether they meet cost-savings and quality goals. Providers in the more popular MSSP program can be “bonus only.”

MedPAC based its recommendations on ACO case studies and interviews with stakeholders. They are meant to help CMS “be flexible and responsive as the program evolves,” the commissioners wrote. Other proposals included clearer attribution of beneficiaries to ACOs and simplified quality measures.

MedPAC is charged with advising the government on how to administer the Medicare program in a cost-effective way. It regularly submits reports to Congress, but lawmakers are not required to act on its recommendations and often ignore them.