ACO bill in House would waive 3-midnight requirement for skilled nursing care

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Certain Accountable Care Organizations would be able to send Medicare beneficiaries to a skilled nursing facility without a prior hospital stay under a bipartisan bill recently introduced in the House of Representatives.

Should the bill pass, ACOs that accept a “two-sided risk” would be exempt from the rule that a beneficiary has spent three midnights as a hospital inpatient to qualify for Medicare coverage of skilled nursing services. Glenn Hackbarth, the outgoing chairman of the Medicare Payment Advisory Commission, recently said that the three-midnight rule should be scrapped entirely. MedPAC previously recommended that the rule should be waived for all ACOs.

This waiver already is in place for ACOs in the Pioneer program; however, only 19 Pioneer organizations remain out of 32 that launched. Recent dropouts have complained that the government overlooks regional factors when settings goals for how much the provider networks have to reduce Medicare costs in order to share in the savings.

The “ACO Improvement Act of 2014” would address this concern, creating demonstration projects with region-specific benchmarks.

The bill also would create a new payment model offering incentives tied to health outcomes, broaden ACOs' ability to offer telehealth services, and ensure that patients could choose their primary care provider.

Click here to view the full bill text. It is sponsored by Rep. Diane Black (R-TN), a registered nurse, and Rep. Peter Welch (D-VT).