Inside Steps CMS Could Take to Increase Nursing Home Participation in ACOs

The nursing home sector’s minimal participation in Accountable Care Organizations (ACOs) – largely because they have not found it lucrative to be in ACOs or have been sidelined within ACOs by other provider types – has resulted in a push for change.

In a joint effort aimed at enhancing the integration of long-term and post-acute care (LTPAC) providers into ACOs, the American Health Care Association and National Center for Assisted Living (AHCA/NCAL) and the National Association of ACOs (NAACOS) have released a set of recommendations, which if implemented could result in cost savings and quality improvements for nursing homes. 

These recommendations, recently shared with the Centers for Medicare & Medicaid Services (CMS), target policies to increase participation of LTPAC providers in ACOs, fostering improved patient outcomes and reduced Medicare costs.


Currently, fewer than 2,000 skilled nursing facilities participate in ACOs. Moreover, nearly 70% of ACOs have no SNF participation. 

Aisha Pittman, NAACOS’ senior VP of Government Affairs, told SNN that a hallmark of managing patients’ costs and quality is successfully handling their transitions out of hospitals. 

“This inevitably involves working with SNFs and other post-acute care providers,” she said. “However, Medicare rules governing ACOs today make it difficult for all providers across the continuum to meaningfully participate.”


She said her ask of CMS is two-fold.

“One, provide more flexibility for SNFs so they can more easily participate in ACOs,” she said. “Two, make it easier for ACOs to work with SNFs or receive information on their patients who receive care in SNFs.”

She added that providers need better access to data and information to ensure their patients don’t end up back in the hospital.

“They need more tools to better work with SNFs and make sure SNFs have the same financial incentives provided to ACOs,” she said.

Researchers said the gap in SNFs working with ACOs highlights the challenges LTPAC providers face in engaging with CMS value-based care models like ACOs, and that despite the potential for targeted partnerships to yield substantial cost savings and care enhancements, existing program policies often fail to align well with LTPAC providers.

“There is a tremendous opportunity for long term and post-acute care providers to lead the way with these value-based programs,” Nisha Hammel, AHCA/NCAL Vice President of Population Health Management, said in a press release. “We gathered this group of thought leaders to determine how we can best support this shift to coordinated care and encourage CMS to further the value and role of these providers as effective partners.”

In 2023, ACHA/NCAL and NAACOS convened a roundtable of stakeholders to develop recommendations on how LTPAC providers can more effectively participate in ACOs and Medicare expenditures.

Challenges in participation for rural operators

Despite the promising potential of post-acute care partnerships to drive cost savings and enhance care quality, SNFs have faced notable barriers in actively participating in value-based care initiatives, researchers found.

Currently, less than 10% of SNFs nationwide are involved in ACOs, with a significant concentration within specific models, notably the ACO Realizing Equity, Access, and Community Health (REACH) model.

Yet challenges may be heightened for rural operators.

The white paper produced by AHCA and NAACOS addressed the unique challenges faced by rural nursing homes in participating effectively in ACOs. It recognizes that rural facilities often encounter distinct obstacles compared to their urban counterparts, such as limited access to resources, workforce shortages, and geographic isolation. 

Despite these challenges, the paper underscored the importance of including rural nursing homes in ACOs to ensure equitable access to quality care for all Medicare beneficiaries, regardless of location.

The paper suggested exploring flexible participation options tailored to the unique needs and capabilities of rural nursing homes, which could involve adjusting program requirements, financial incentives, and care delivery models to accommodate the specific circumstances of rural providers.

“CMS and stakeholders from the value-based care and LTPAC communities must work together to address this important, but complex, patient population,” researchers wrote. “This includes further developing and building consensus around the principles and recommendations highlighted in this document, which are intended to serve as a strong starting place for this critical work.”

Access to CMS regional data and data sharing

One primary concern highlighted by researchers was the requirement for ACOs to access regional data from CMS to foster partnerships within their geographical areas. Additionally, SNFs were identified as needing sufficient resources and technical support to meaningfully engage in value-based care practices.

Researchers said CMS’s proposed Universal Foundation was a good step toward developing interoperable digital quality measures, which could help facilitate cross-comparisons across various healthcare programs.

Researchers stressed the importance of CMS considering diverse perspectives and capabilities across the care continuum, ensuring a level playing field that accommodates the unique needs of each provider.

Researchers recommended CMS update its Medicare system to list the ACO a patient is aligned with for prospective attribution, much like a patient’s chosen Medicare Advantage plan might be identified. Moreover, they also called for regular sharing of performance data during the performance period, with feedback loops for data updates or corrections.

A significant emphasis is placed on data sharing, with suggestions for CMS to leverage networks for real-time information exchange between acute care facilities and SNFs. Furthermore, the report advocated for regular sharing of utilization and cost data to aid ACO participants, physician practices, and SNFs in understanding their financial performance.

While researchers said funding emerged as a significant hurdle in advancing data infrastructure, there were some silver linings.

“There may be cost-saving strategies that could be deployed, such as  treating in place with an add-on payment for more intensive care or directly admitting to their SNF in lieu of hospitalizations, or utilizing hospice and/or palliative care for end-of-life care,” they wrote.

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