Washington, D.C. — As the federal government accelerates its push to move Medicare away from fee-for-service payment, skilled nursing facilities are largely being left behind. More than 90% of the nation’s nursing homes have no pathway into accountable care organization programs, according to the American Health Care Association and National Centers for Assisted Living — and industry leaders say that’s a problem CMS can no longer afford to ignore.
Nisha Hammel, AHCA/NCAL’s vice president of reimbursement policy and population health, put it plainly: the current ACO models were never built for long-term care. They were designed with community-based populations in mind, and skilled nursing providers who try to participate find themselves forced to adapt frameworks that simply don’t fit how they operate or who they serve.
“That’s been one of the barriers for long-term care providers. They’re often forced to adapt models that were not designed for them,” Hammel said.
A Misalignment That Costs Everyone
The stakes aren’t just operational — they’re financial. Industry reports have long argued that nursing homes represent a significant opportunity for Medicare savings, but that opportunity keeps slipping away because the models don’t align with the realities of long-term care. Residents in skilled nursing facilities tend to be older, sicker, and more medically complex than the typical ACO patient. Their goals of care are different. Their hospitalization risk is different. The quality metrics that make sense for a primary care population often don’t translate.
Without models tailored to that reality, SNFs stay on the sidelines — and CMS misses out on the very coordination efficiencies value-based care is supposed to generate.
There were some exceptions. ACO REACH had features that worked better for long-term care, but that program will be phased out in 2027. Its replacement — the Long-Term Enhanced ACO Design, or LEAD — is generating real attention in the industry. AHCA/NCAL recently published a white paper outlining what a nursing home-focused ACO model should look like, either as a standalone design or as a dedicated long-term care track within LEAD.
What Nursing Homes Actually Need From CMS
The industry’s ask isn’t simple, but it’s specific. Hammel outlined several areas where current ACO structures need to change before nursing homes can meaningfully participate.
Attribution is one of them. The way CMS assigns patients to providers in ACO models doesn’t reflect how nursing home residents receive care. Eligibility criteria is another — many long-stay residents don’t fit the typical ACO beneficiary profile. Financial methodology matters too: the risk-sharing structures need to account for the intensity and complexity of post-acute care, not just episodic interventions.
Quality measures would also have to shift. In a nursing home-specific model, Hammel said, metrics should focus on maintaining function, patient satisfaction, and quality of life — not just reducing hospitalizations. Timely access to CMS data is critical too. Old or delayed data creates confusion in care coordination and undermines the whole purpose of an integrated model.
“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,” Hammel said. “There’s some alignment there, and that certainly translates into quality outcomes more globally.”
The Bigger Picture: A System Under Transition
CMS has been clear that value-based care is no longer an experiment. The agency recently rolled out 11 new payment models, signaling what Hammel described as a deliberate, system-level strategy to move Medicare away from volume-based reimbursement — for good.
“This is really no longer a pilot phase,” she said.
For nursing homes, that means the window to shape these models is narrowing. Providers that stay disengaged now could find themselves subject to payment frameworks they had no hand in designing — frameworks that don’t reflect the cost or complexity of the care they deliver.
Traditional fee-for-service Medicare remains the financial foundation for most skilled nursing facilities. But Hammel’s message was clear: that foundation isn’t permanent. Quality and outcomes will increasingly determine what providers actually get paid — and nursing homes that aren’t in the room when the models are built will be the ones left scrambling when they take effect.
