The SNF Waiver is Vanishing Soon. What Then?

The SNF Waiver is Vanishing Soon. What Then?

A deep dive into the implications of three-day inpatient stay waiver, which is set to expire.

Is everyone excited for May 11, when the federal public health emergency (PHE) ends and we lose the three-day inpatient stay waiver for access to Part A skilled nursing facility (SNF) coverage?

I am hearing lots of things out there: “oh, our SNFs stopped accepting waiver patients a long time ago” and “oh, our SNFs don’t have enough staff, so they never have open beds, so the waiver is worthless” and “we don’t have any COVID patients needing SNF anymore, so we stopped using the waiver.”

Let me look at bit closer at these. First, the SNFs have every right to not accept the waiver, but most do it because early in the pandemic, their claims were denied without that three-day inpatient stay. I don’t know if it was the lack of the DR condition code on their claim or a processing error by the Medicare Administrative Contractor (MAC) at the beginning, when their claim processing systems were not updated, but nonetheless, these SNFs were not willing to risk non-payment again.

The lack of staff and bed capacity is certainly a huge issue, and I wish I had a solution. Some think there are games going on in the SNF ownership world, with private equity and hidden owners skimming profits and neglecting patients and staff. The Centers for Medicare & Medicaid Services (CMS) recently proposed regulations regarding public reporting of ownership to try to address that. Having spent a lot of time in SNFs as a medical director at two facilities in my area years ago, I know that being a nurse or aide in a nursing facility is very hard work with little reward. Society often does not recognize the true value our frontline workers like these provide. But our population is getting older, and unless we really improve our ability to provide care in patients’ homes, where many would prefer to be, the SNF crisis is only going to get worse.

And the third excuse is something that is blatantly wrong. The waiver was not limited to COVID patients. Way back in November 2021, CMS addressed this, stating in writing that “the qualifying hospital stay waiver applies to all SNF-level beneficiaries under Medicare Part A, regardless of whether the care the beneficiary requires has a direct relationship to COVID-19.” Can’t get much clearer than that. No need for a COVID diagnosis, no need for the hospital to be overwhelmed with COVID cases. Any patient needing SNF care qualifies. Now, it should be noted that CMS in other documents stated, “for those people who experience dislocations, or are otherwise affected by COVID-19.” This does provide some ambiguity, but the concept of “otherwise affected” is broad enough that the requirement for visitors to wear masks would meet that standard, and I don’t think any hospital has yet to drop that requirement.

Some of you may remember that during one Open Door Forum call, Seema Verma, then administrator of CMS, stated, “you can use the waiver for any patient, but you have to ask yourself if you should use it.” I think that scared off some, thinking that the auditors would come back later searching for a positive COVID test and deny payment. Philosophical questions like that from administrators do not constitute a rule, a regulation, or a law, and are best ignored.

Which brings me to another point. Will CMS eliminate this outdated rule? We all hope so. But the requirement is in the Social Security Act, section 1861(i), so it literally will take an act of Congress to remove it permanently. It will be interesting to see if it gets addressed and whether they develop controls to avoid misuse of the Part A benefit for patients without skilled needs, as was seen in the 1980s when the rule was rescinded. In a RACmonitor article in 2019, I went into great detail on that rule, if you want the in-depth view.

It is also important to keep things in perspective. As I noted above, misuse of the Part A SNF benefit was part of the history that has to be kept in mind. Many patients, and especially families of elderly patients who have trouble at home, want placement at a nursing facility, as long as someone else is paying for it. In the past, we called this “admit for SNF placement.” But prior to COVID, doctors tried to get past that, often successfully, by diagnosing weakness or failure to thrive and stretching the admission for three days. A physical therapy consult then often results in a recommendation for SNF placement, and the patient ends up at a SNF under Part A. This had become less common as some SNF admissions were audited and denied for lack of skilled care needs, so the facilities will likely be more selective.  

In addition, as most know, the Part A SNF benefit includes 100 percent coverage for the first 20 days of care; then, the patient must pay a daily coinsurance for the next 80 days. In an analysis done in 2019, the number of patients discharged from SNFs on day 20 was over 65 percent higher than the number discharged on day 19 or day 18. Coincidence? I don’t think so. In fact, when an elderly friend of the family who was a widower and lived in a townhouse with 15 steps to get to the living area had a knee replacement and went to a SNF for rehab, we took him out on day 15 for a “trial run” at home. He did great and wanted to get back there. Yet it strangely took five days for the nursing home to make the arrangements to get him discharged. Day 20 is often referred to as the “magic day,” when discharge is the most financially advantageous day for the facility. Literature also indicates such a day exists for long-term acute-care hospitals (LTACHs), too. And of course, in hospitals, the “magic” happens at two midnights. A study published last week showed increased SNF utilization when there was vertical integration between the SNF and the hospital. Did all those patients truly need SNF care, or was there a financial factor involved in the decision to send more patients to SNFs?

So, if the three-day inpatient rule is rescinded, will all parties play nice in the sandbox? Will we have enough SNF capacity and enough staff? Will SNFs start boosting their provider coverage with “SNFists” and start attracting Medicare patients who need acute care like IV antibiotics or IV diuretics, diverting them from hospitals, perhaps reducing hospital inpatient censuses? Will the media start telling people to take their loved ones to the hospital to get assessed for SNF placement, because the government will now pick up the costs? In fact, will a hospital visit even be needed?

Perhaps SNFs will start sending staff to patients’ homes to assess their suitability for Part A SNF coverage. It will be interesting to watch the future of SNF care in the next few years.


Ronald Hirsch, MD, FACP, CHCQM, CHRI

Ronald Hirsch, MD, is vice president of the Regulations and Education Group at R1 Physician Advisory Services. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays. The opinions expressed are those of the author and do not necessarily reflect the views, policies, or opinions of R1 RCM, Inc. or R1 Physician Advisory Services (R1 PAS).

Related Stories

Leave a Reply

Your Name(Required)
Your Email(Required)

Featured Webcasts

Implantable Medical Device Credit Reporting for 2023 – What You Need to Know

Learn how to save your facility hundreds of thousands of dollars in repayments and fines by correctly following CMS requirements for implantable medical device credit reporting. We provide you with all the need-to-know protocols, along with the steps for correct compliance while offering best practices to implement a viable strategy in your facility.

January 25, 2023

Trending News