Impact of the Skilled Nursing Facility 3-Day Rule Waiver on Medicare ACO Expenditures: A Retrospective Analysis of 2023 MSSP Performance Data

Abstract

ObjectivesTo evaluate whether participation in the Medicare Skilled Nursing Facility (SNF) three-day rule waiver has an effect on total per capita expenditures among Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP). Design A retrospective cross-sectional analysis of 2023 MSSP ACO performance data. The study assessed the relationship between SNF waiver participation and healthcare expenditures using a multivariate linear regression framework. The study included all ACOs participating in the MSSP during the 2023 performance year, encompassing a nationally representative sample of Medicare beneficiaries attributed to those organizations. Methods A robust linear regression model was developed to explain variation in per capita expenditures, with adjustment for key covariates including patient risk profiles (CMS Hierarchical Condition Category scores), ACO savings rates, and inpatient and SNF utilization rates. Subgroup analyses were performed based on ACO size, defined by the median beneficiary count (19,457). A post-hoc power analysis confirmed adequate statistical power (>80%) to detect moderate effect sizes. Results The model explained 96% of the variance in per capita expenditures (Adjusted R² = 0.96). Key predictors included HCC risk scores (β = 4430.63, p < 0.001), savings rate (β = –52.63, p < 0.001), inpatient utilization (β = 1.80, p < 0.001), and SNF utilization (β = 2.46, p < 0.001). SNF waiver participation was not significantly associated with expenditures overall (β = 12.81, p = 0.828) or in either subgroup analysis. Conclusions and Implications While risk profiles, utilization patterns, and financial performance significantly shape ACO expenditures, SNF waiver participation alone does not independently impact spending. As CMS prepares to expand the waiver under the FY 2026 IPPS/LTCH PPS rule, ACOs and policymakers should focus on broader strategies—such as refined risk adjustment, care coordination, and cost-saving interventions—to achieve meaningful value-based care improvements. Keywords: Medicare Shared Savings Program, ACO, Skilled Nursing Facility, 3-Day Rule Waiver, Healthcare Expenditures, Risk Adjustment, Post-Acute Care Transitions