Accountable Care Organization Medicare SNF 3-Day Waiver Improves Subacute Rehabilitation Access and Decreases Cost of Care

The Medicare Skilled Nursing Facility 3-Day Rule Waiver Benefit Enhancement (SNF Waiver) has been in use in Vermont since 2018 through a Centers for Medicare and Medicaid Services (CMS) waiver with the OneCare Vermont Accountable Care Organization (ACO). This article describes the usage of the waiver in 2024–2025 and calculates a cost savings from eliminating the Medicare SNF 3-Day Rule. OneCare conducted a usage and cost savings analysis from the implementation of the SNF Waiver. Hospitalization costs and number of hospital days were estimated. The use of the SNF Waiver on an annual basis nearly doubled absolutely from the reporting period of 2018–2019 to 2023–2025, which was a 55% relative increase of use in the state of Vermont. The SNF Waiver was broadly used across many different specialties. The analysis determined that use of the SNF Waiver saved at least $2 million in hospital expenses in gross savings in 2024 in Vermont alone. This study demonstrates that utilizing ACO waivers allows patients to receive the right care, in the right place, at the right time. Further, the study shows considerable health care cost savings when applying an average of $3000 savings per patient per hospital day. If the SNF Waiver were to be adopted nationally, roughly 275,000 inpatient days could be avoided annually, which represents more than $800 million in potential cost savings. This study, combined with others, supports the recommendation that the CMS consider permanent reform by eliminating the SNF 3-Day Rule.