As CMS Expands ACOs, Nursing Homes Push for More Aligned Model as 90% Are Left Out

As the Centers for Medicare and Medicaid Services (CMS) strives to improve and expand accountable care organization (ACO) models for the future, there’s a prime opportunity to better serve long-term care populations, including residents in nursing homes.

For starters, the federal agency should consider simplifying the bureaucratic hurdles that keep more skilled nursing facilities (SNFs) from joining the program – currently more than 90% are left out of the ACO programs according to figures shared by Nisha Hammel, VP of reimbursement policy and population health for the American Health Care Association and National Centers for Assisted Living (AHCA/NCAL). 

Existing ACOs are more aligned with community-based populations, Hammel told Skilled Nursing News. And, SNFs that try to participate in ACOs are often met with unnecessary complexity and administrative burdens, she said, because of this misalignment.

“That’s been one of the barriers for long-term care providers. They’re often forced to adapt these models that were not designed for them,” said Hammel.

And so, participation has been limited up until now. There were some exceptions like ACO REACH, which will be phased out in 2027 while the highly anticipated Long-Term Enhanced ACO Design (LEAD) makes its debut. However, Hammel believes a tailored ACO model for long-term care providers could generate significant cost savings.

And without such targeted approaches, CMS risks overlooking some of Medicare’s most complex patients, and the providers who care for them. AHCA/NCAL was encouraged by CMS’ interest in making sure ACO models were working effectively, and offered up a tailored ACO model for the skilled nursing population in a recent white paper, while also acknowledging that the LEAD model could be tweaked further to align with the sector.

“While a standalone long-term care-focused ACO model would be ideal, we would also support a dedicated long-term care track within LEAD that clearly reflects these design elements, particularly around attribution, eligibility and some of the financial methodologies, quality and data recommendations that we made,” said Hammel. “That would be a workable alternative.”

Finding VBC alignment

The challenge right now is that there is a misalignment between many long-term care providers and value-based care models – there’s no clear pathway for meaningful participation in ACOs in particular, Hammel said.

Fewer than 10% of SNFs participate in ACOs, Hammel reported in the white paper.

“There’s going to be some model adjustments around care patterns like risk profiles and intensity required to serve these beneficiaries,” said Hammel. “The goal is that ultimately, managed care and reimbursement models really reflect the true cost of delivering high quality, complex care, especially in long-term care settings.”

The core strengths of value-based care is that it encourages providers to break down silos, Hammel noted, coordinate care, share data and facilitate effective handoff across care settings.

For the long-term care settings, coordination may look a little different, placing greater emphasis on understanding goals of care – there’s a focus on what the resident wants instead of episodic intervention seen in other settings, said Hammel.

That means quality measures for models like LEAD would change to fit the sector, she said, focused more on maintaining function, patient satisfaction and quality of life. Timely access to CMS data can help with model alignment too.

“[Old data] can really hinder coordination and can unnecessarily create confusion. If we think about current quality programs on the SNF side, there is that tie-in to reducing avoidable hospitalizations and keeping people at the highest level of function, or maintaining a level of function,” said Hammel. “There’s some alignment there, and that certainly translates into quality outcomes more globally for the facilities.”

ACOs within larger managed care drivers

While not all of these new models are directly applicable to SNFs, it’s important to pay attention to them since they signal where CMS is heading in terms of their expectations for providers, Hammel said.

The agency is moving toward tighter care coordination through care models, along with more integrated financial relationships across providers and changing patterns with potential referrals.

“Understanding CMS’ broader goals and how these goals translate into expectations for providers is increasingly critical, even when long-term care is not the primary focus of a given model,” noted Hammel.

And CMS is wanting providers to participate in models with both upside and downside risk, Hammel said.

Hammel said value-based care has been steadily expanding for years, but recently, its growth accelerated meaningfully with the rollout of 11 new payment models, signaling a clear transition from experimentation to widespread adoption.

“At a system level, CMS is really pursuing a deliberate strategy to test, expand or retire models that don’t help them achieve their two goals, which is improving patient outcomes and containing Medicare spending,” said Hammel. “There’s certainly signals that this is really no longer a pilot phase.”

More broadly, CMS is using these models to learn what works and what doesn’t in terms of tying quality and outcomes to payment, while also being keenly aware of generating savings for taxpayers, she added.

Medicare has historically paid based on the volume of services delivered, Hammel said, an approach that is fading in favor of value-based care. In order words, such models will increasingly shape how providers are paid going forward.

Traditional FFS Medicare, meanwhile, remains the “foundation” of payment for skilled nursing facilities and other long-term care providers, Hammel said, and not the “final answer” for reimbursement.

“Providers will still get reimbursed for the care that they’re providing, but there will be factors reflecting quality and outcomes that, for example, will determine what the final reimbursement actually is,” said Hammel.