The SNF 3-Day waiver is a perfect example of the kind of systems intervention that may seem insignificant, but it really makes a big difference in shifting health care spending to the care that will produce improved health outcomes—care that is high-quality, but lower cost than inpatient hospital stays.
In a time when addressing our national health care challenges can feel overwhelming, real solutions are making a difference—helping people access the right care, at the right time. Some of these solutions, both innovative and rooted in common sense, are made possible through “benefit enhancement waivers.”
These waivers, granted by the Centers for Medicare & Medicaid Services (CMS), are available in Vermont through the OneCare statewide accountable care organization (ACO). One notable example is the 3-Day Skilled Nursing Facility (SNF) Rule Waiver, which allows providers to bypass the traditional Medicare requirement that a patient must have a three-day hospital stay before being admitted to a SNF for a subacute or rehabilitation stay.
This flexibility means patients can transition more quickly to the appropriate level of care—improving outcomes and freeing up hospital capacity for those who truly need it.
Success in Numbers: Patients and Savings
In 2018, OneCare developed and submitted an implementation plan for the 3-Day SNF Rule Waiver to CMS. As part of the rollout, OneCare partnered with eligible SNFs and worked to educate referring providers—including those in primary care and emergency departments—about the waiver’s availability and benefits.
With the exception of the COVID-19 pandemic period (2020 to mid-2023), during which tracking was paused, use of the waiver has steadily increased. In 2024 alone, 299 patients benefited from the waiver. Of these, 126 patients were admitted directly from the emergency department to a SNF, bypassing the need for a three-day hospital stay. This direct transfer model not only improved patient experience but also generated significant cost savings—approximately $3,000 per patient per day.
Based on the patients’ points of origin prior to SNF admission (e.g., ED, home, observation, or short inpatient stay), it’s conservatively estimated that the waiver saved at least $2 million in hospital expenses in 2024.
These results underscore the waiver’s potential to reduce unnecessary hospitalizations, lower costs, and deliver more timely and appropriate care.
The 3-Day SNF Waiver Matters for Patients
When the mandatory three-day hospital stays typically required by Medicare is waived, patients can be admitted directly to a skilled nursing facility (SNF)—bypassing stressful and sometimes unnecessary hospital stays that may worsen symptoms and delay appropriate treatment.
A national study of the 3-Day SNF Rule Waiver found that most admissions under the waiver came directly from the community, and that patients had shorter SNF stays compared to those admitted under the traditional requirement*.
Even more compelling, patients who used the waiver experienced significantly fewer negative outcomes. The study also showed substantial cost savings when patients either skipped the hospital stay entirely or spent fewer than three days in the hospital before transitioning to a SNF**.
These findings highlight how targeted policy changes can improve patient experience, reduce costs, and support more efficient use of health care resources.
“SNFs provide personalized and attentive care, allowing patients to recover in a potentially more comfortable and less intensive environment than the hospital setting,” remarks Dr. Carrie Weigand, OneCare’s Chief Medical Officer. “Early and seamless transfer to a skilled nursing facility allows for timely rehabilitation and recovery, continuous and coordinated treatment, and potentially reduces complications while improving overall health outcomes and patient experience.”
One example of this waiver in action is a story from a Vermont rehab center where a patient who had previously stayed at the facility following an amputation had returned home, but his primary care provider later recommended he return to the SNF for additional training with their prosthetic and to build strength.
Their goal was clear: to regain independence and return home as soon as possible. Thanks to the waiver, he was able to be readmitted directly to the rehab center—without the delay and discomfort of a hospital stay. This timely access to care allowed him to make meaningful progress, return home successfully, and participate in his community.
Another rehab center in Vermont found that the policy flexibility of the waivers directly improves patient outcomes and supports more responsive, person-centered care. One patient was able to rehab after a femur fracture and did not have any medical concerns that would warrant further evaluations in a hospital setting. This made for a more straightforward and efficient execution of care for this patient. They were able to return home with the assistance of home health services.
Human-centered care: SNFs provide personalized and attentive care, allowing patients to recover in a potentially more comfortable and less intensive environment.
The 3-Day SNF Waiver Matters for Efficient Use of Healthcare Resources
While some patients may benefit from Medicare’s three-day hospital stay requirement, it is not necessary for all—and in some cases, it can create more harm than help. Prolonged hospital stays can lead to longer wait times for admission, overcrowded emergency departments, high patient-to-provider ratios, decreased patient satisfaction, and increased risk of infections and other complications.
In the case of the patient who needed training with their prosthetic, requiring a hospital stay before returning to the SNF would have potentially delayed his recovery and undermined long-term success.
Moreover, placing a patient in a high-cost hospital setting when it’s not clinically necessary is an inefficient use of resources. These kinds of systemic inefficiencies contribute to the unsustainable cost of health care in the U.S.
By allowing more flexible, patient-centered pathways—like the 3-Day SNF Rule Waiver—we can improve outcomes, reduce costs, and make better use of our health care infrastructure.
“Shifting to a value-based care system of care requires efficient use of resources,” remarks Tom Borys, CEO and CFO of OneCare Vermont. “When we unnecessarily keep patients in the hospital when it is not the appropriate care for their needs, everyone loses. The SNF 3-Day waiver is a perfect example of the kind of systems intervention that may seem insignificant, but it really makes a big difference in shifting health care spending to the care that will produce improved health outcomes—care that is high-quality, but lower cost than inpatient hospital stays.”
Lessons for the Future of Healthcare Payment and Delivery Reform
Lessons learned from ACOs using the 3-Day SNF Waiver demonstrate that reducing unnecessary hospitalizations in favor of more personalized, patient-centered care models yields clear benefits.
When care is tailored to individual needs—and payment models support that flexibility—patient experiences improve, health care costs decline, and hospital capacity is preserved for those who truly need it.
As health care costs continue to rise, future care models must prioritize delivering the right care, in the right place, at the right time. Doing so will enhance patient satisfaction, increase system efficiency, reduce avoidable hospital stays, and help ensure the sustainability of our health care system.
Sources:
*Skilled Nursing Facility 3-day Waiver Analysis of Use in ACOs 2014 to 2019. Skilled Nursing Facility 3-day Waiver: Use in ACOs 2014 to 2019 (cms.gov)
** Phelan, M.P. et al. “120 Skilled Nursing Facility 3-Day Waiver Pilot: Direct Admission to Skilled Nursing Facilities From the Emergency Department Avoids Hospital Admissions and Decreases Costs” Annals of Emergency Medicine, Volume 72, Issue 4, S51
For more information:
Please contact Public Affairs at OneCare Vermont. public@onecarevt.org | 802-847-1346
To stay up to date on OneCare, please visit our news blog and our social media channels on LinkedIn and Twitter.