Long-term and post-acute care (LTPAC) providers play a vital role in our health system. As one of the most complex patient populations, LTPAC patients are a considerable driver of Medicare costs.

According to the Medicare Payment Advisory Commission, Medicare spent nearly $57 billion on post-acute care—around 15% of total spending. Forty percent of inpatient hospital discharges are followed by LTPAC services, totaling nearly 2 million skilled nursing facility (SNF) stays per year.

Continuing to improve and coordinate post-acute care can lead to higher quality and lower costs. As such, LTPAC providers are in a position to lead the way on value-based care.  

Unfortunately, many existing value-based care models, such as accountable care organizations, do not accommodate the unique challenges these providers face. These models are often tailored to a community-based, primary care provider. The Centers for Medicare & Medicaid Services (CMS) should take specific steps to help shape ACO models that better align with LTPAC providers. The patients they serve deserve the higher quality, lower cost care we know value-based care delivers. 

Limited participation

Analysis of CMS data from the Institute for Accountable Care and the National Association of ACOs (NAACOS) shows: 

  • Fewer than 2,000 SNFs participate in ACOs, representing less than 10% of SNFs nationwide.  

  • SNF participation is concentrated in a small number of ACOs, particularly in the ACO Realizing Equity, Access, and Community Health (REACH) model.  

  • Fewer than 10% of ACOs account for nearly three-quarters of SNF participation. 

  • Nearly 70% of ACOs have no SNF participation.

CMS has a goal to have all Medicare beneficiaries in an accountable care relationship by 2030. If the agency is to achieve this goal, then it must adopt value-based care models to better align with LTPAC providers. Models must better determine which patients ACOs are accountable for, set financial benchmarks and determine which quality measures must be reported.

Because of these shortcomings, LTPAC providers very rarely participate in value-based care models or are forced to enter separate contractual arrangements with ACOs—all of which pose limitations. 

The critical role and success of LTPAC providers

LTPAC has played a critical role in the success of value-based care models, with some of the most significant cost savings and care improvements in ACO and episodic payment models generated by intentional and targeted post-acute care partnerships. In a synthesis of findings from 21 CMS Innovation Center models, 14 models (66%) had reductions in spending driven by post-acute care utilization. 

Furthermore, a 2017 Office of Inspector General report (PDF) found high-performing ACOs reduced SNF spending by almost $287 per beneficiary, while other ACOs increased their spending in this area by $25 per beneficiary. High-performing ACOs decreased SNF admissions rates by 16%, compared to a decrease of 4% for the national average. 

The roundtable convenes

To find better ways to create meaningful participation options for LTPAC providers in value-based care models, the American Health Care Association/National Center for Assisted Living and NAACOS gathered a roundtable of long-term care representatives, ACO leaders, patient advocacy organizations, providers and healthcare payers in 2023. Through a robust discussion, roundtable participants coalesced around a series of recommendations for CMS to improve existing value-based arrangements and develop future model concepts that would enable LTPAC providers to engage within broader accountable care arrangements more effectively. 

The roundtable discussion focused on options for effective partnership with LTPAC providers in two priority areas. First, existing ACO models, including the Medicare Shared Savings Program and the ACO REACH Model, could be improved to increase SNF participation.

Second, developing future model concepts that would enable SNF providers to take on risk and meaningfully engage within broader accountable care arrangements.  


The roundtable’s recommendations (PDF) include:  

  • Alignment for beneficiaries residing in LTPAC facilities 

CMS should allow attribution at the facility level, through the facility CMS Certification Number, recognizing the important role nursing facility staff play in coordinating care for beneficiaries. Under current policy, patients are attributed to ACOs through clinician-level visits, which are not appropriate for LTPAC patients.

Because SNF care is often delivered by teams of clinicians, CMS’ current methodology for determining which patients ACOs are responsible for neglects the facility-based care provided by SNFs.  

  • Financial methodology 

CMS should account for the sickness of patients in ways that are more appropriate for LTPAC patients. Specifically, it should use risk scores collected during the year to account for patients’ health status. Currently, risk scores collected the year prior are applied to that year’s financial adjustments, which often creates lags in accurately identifying patients in poor or worsening health. This is currently done with the concurrent risk adjustment model being tested in ACO REACH.

Because SNF stays are often unexpected or show a dramatic change in health, not having that change captured disadvantages ACOs who care for SNF patients.   

  • Quality measurement 

Given their unique challenges, the LTPAC population necessitates a distinct set of quality metrics that are clinically pertinent and meaningful to their well-being. For example, CMS should use measures that encourage hospitals and clinicians to establish superior care transitions and discharge planning, including advanced care planning. 

  • Data 

CMS should regularly share utilization and cost data for attributed members throughout the performance period to help ACO participants, physician practices and SNFs understand point in time progress regarding financial performance. This may also require technical assistance, particularly for SNFs that are less likely to have robust data infrastructure.

Arming SNFs and ACOs with timely data allows them to make informed decisions to better care for their patients.  

Full details of each recommendation can be found in the White Paper (PDF).

LTPAC providers have already played a key role in the success of value-based care, particularly in ACOs, helping many SNF residents receive higher quality care at lower costs. By designing models that better recognize their needs, value-based care can provide even better outcomes in the years ahead. CMS needs to consider all of these recommendations and create a clear path forward in which ACO models better align with LTPAC providers.   

Abigail Barreto is the vice president of public affairs at the American Health Care Association/National Center for Assisted Living. Nisha Hammel is the vice president of reimbursement policy and population health at the American Health Care Association/National Center for Assisted Living. Aisha Pittman is the senior vice president of government affairs at the National Association of ACOs. David Pittman is the director of communications and regulatory affairs for the National Association of ACOs. Sarah Sugar, MPH, is a director at Sirona Strategies.