CMS Wants Nursing Homes Tied Into Accountable Care Organizations — and a Former Top Official Says SNFs Should Get Onboard Now

Washington, District of Columbia — More than half of Medicare fee-for-service beneficiaries are now aligned with an accountable care organization, and a former top federal innovation official says nursing homes should be moving fast to get inside that system before the next wave of payment models locks in.

Purva Rawal, who recently stepped down as chief strategy officer for the Center for Medicare and Medicaid Innovation, told industry reports that ACOs have become the strongest mechanism the agency has for managing total costs while still improving outcomes — and that skilled nursing operators stand to gain by aligning early. Her message lands as the Centers for Medicare & Medicaid Services prepares to launch the Long-term Enhanced ACO Design, or LEAD, in January 2027.

“The program needs to go further. It needs to be bringing in more providers like SNFs into the continuum, creating that new proposition for downstream providers as well,” Rawal said.

Why the timing matters for operators

LEAD is a 10-year voluntary program with a long runway, and that’s by design. The extended timeline gives nursing homes room to build relationships with ACOs, set up data infrastructure, and learn how to manage complex patients before downside risk kicks in. Operators that wait, Rawal warned, may find themselves on the outside looking in once hospitals and physician groups have already locked in their preferred post-acute partners. Application deadlines for the new model have already pushed some facilities to act.

The pitch isn’t just theoretical. CMS data shows ACO adoption has produced what officials call “spillover effects” — care delivery changes that ripple beyond the patients officially aligned with a model. Hospitalizations, heart attacks, and strokes have trended down over a stretch where Medicare claims came in roughly $4 trillion below projections between 2011 and 2022.

A warning on conveners

Rawal also flagged a recurring complaint from frontline operators: managed care organizations and other “conveners” that broker ACO participation often keep too much of the shared savings. CMS is paying closer attention to that dynamic and is pushing for arrangements where dollars flow more directly to the providers actually delivering care. Conveners aren’t going away, she said, but their cut should shrink over time.

Insolvency is the backdrop

The bigger picture, Rawal added, is that the Medicare trust fund is barreling toward insolvency, and value-based care is one of the few tools left for bending the cost curve without slashing benefits. The Trump administration has continued the previous push to put 100% of Medicare beneficiaries into accountable care relationships — a rare point of policy continuity.

For nursing homes, the takeaway is straightforward: the ACO train has left the station, and the operators who climb on now will have a seat when the next round of payment reform rolls out.