This weekly blog post covers more about what ACOs need to know about the recently released final Medicare Shared Savings Program ACO rule. Check out the first two blog posts in this series here – The Top Three Things to Know About the Final Rule and Understanding High and Low Revenue ACOs.  

During our webinar held the first week of January, lots of questions came in about the options for risk-bearing ACOs. In this blog, we are digging into two elective options for ACOs in two-sided risk: the waiver of the 3-day hospital stay for skilled nursing facility care, and the Beneficiary Incentive Program (BIP).  


What is the waiver of the 3-day SNF rule? 

Traditional Medicare requires a 3-day inpatient hospital stay before covering certain post-hospital services, such as a skilled nursing facility (SNF) stay. Several years ago, CMS began allowing certain risk-bearing ACOs to apply for a waiver of this requirement. The waiver meant that beneficiaries could receive care in a SNF without an immediately preceding hospital stay. The idea was the cut down on unnecessary hospitalizations and associated costs.  

In the December 2018 final rule, CMS makes the 3-day SNF waiver available to ACOs in risk bearing Tracks (Basic track levels C, D, E, and Enhanced track.) The final rule makes a couple of important changes to the waivers. First, the waiver will be available regardless of whether the ACO chooses prospective or retrospective beneficiary assignment. Second, critical access hospitals and other small, rural hospitals operating under a swing bed agreement can partner with ACOs as SNF affiliates for purposes of the SNF 3-day rule waiver.  

What is the Beneficiary Incentive Program (BIP)? 

The final rule implements a 2018 law allowing ACOs in two-sided risk arrangements to make cash equivalent payments to beneficiaries for receiving certain primary care services within the ACO. These incentives can be worth up to $20 and can include health or medical-related vouchers or gift cards. This serves multiple purposes; it could increase the chance that a beneficiary gets important primary care services and it also encourages the beneficiary to get that primary care with in the integrated delivery system of the ACO.  

How does an ACO participate in these options?  

A risk-bearing ACO that wants to elect one of these program options must submit a Notice of Intent to Apply (NOIA) as well as a full application. For a start date of July 2019, the NOIA date was due by January 18, 2019. The full application can be submitted by February 22, 2019. The dates for a January 1, 2020 start have not yet been announced. For the SNF 3-day waiver application, the ACO must explain their communication and care management plans. For the BIP application, the ACO must describe the specifics of the proposed program and how they will track beneficiaries and payments.  

More questions about the final rule? 

This blog series covered some of the most common questions that have come up since the final rule was published. We have compiled a more extensive list of questions and answers available on our website.  

Read our full FAQ document here


Caravan Health is here to help

Caravan Health can work with you to figure out the best way to move forward under the new rules. Get in touch with us at  for more information.

Recent Resources

CMS Actions in Response to the COVID-19 Public Health Emergency

The Centers for Medicare and Medicaid Services just issued a lengthy set of policy changes to address the growing COVID-19 public health emergency (PHE). These changes will help hospitals and health providers to respond to the crisis more quickly and safely, including many more options for telehealth in Medicare.

ACO, Policy, Webinars & Events, Quality, Value-Based Care, COVID-19

Stop Standing Still: How to Get Started in a High-Performing Caravan Health ACO

Tuesday, September 24 at 9:00am PT / 12:00pm ET

ACO, Webinars & Events

10 Reasons ACOs Can Fail

Just published in Becker’s Hospital Review – Caravan Health Senior Vice President Tim Gronniger discusses ten reasons Accountable Care Organizations can fail.

ACO, Blogs & News, Value-Based Care


NEWS: Signify Health Completes Acquisition of Caravan Health

ACO insights delivered right to you

Thank you

Sign up for our newsletter of data-driven news and stories from the latest in ACOs, value-based care, and population health.

  • Real-time insight into alternative payment model trends
  • Strategies and practices that drive results
  • Leadership lessons from health care and beyond
  • Perspectives on the changing health care landscape

By sharing your email you agree to our Privacy Policy

newsletter signup