Washington, D.C. — The nation’s largest nursing home trade group is pushing the federal government to create a dedicated accountable care organization model for long-term care — one it says could save Medicare more than $2 billion a year and finally bring skilled nursing into the value-based care mainstream.
The American Health Care Association released an updated whitepaper this week outlining recommendations for how the Centers for Medicare & Medicaid Services should redesign ACO participation rules that, as currently written, largely leave nursing homes on the outside looking in.
Right now, fewer than 10% of skilled nursing facilities participate in any ACO — a number AHCA says reflects a structural problem, not a lack of interest. Existing models were designed around individual patients not living in care facilities, and they’re driven by clinician-led networks that don’t map well onto how long-term care operates.
A New Model Built for Long-Term Care
The group is calling on CMS to build a long-term care-specific ACO model — or at a minimum, a specialized track within the existing LEAD model, which is still in early development. Their recommendations include:
- A new attribution method tied to facility-level certification numbers, not individual provider tax IDs
- Flexible risk-sharing and financial incentives scaled to smaller operators
- Streamlined quality measures that fit the LTC setting
- Interoperable technology adoption requirements
- Prioritized access for rural and smaller facilities currently shut out by participation minimums
On that last point, AHCA wants CMS to lower the current 5,000-beneficiary floor — a threshold that essentially bars most independent and rural operators from participating at all.
“Our recommendations aim to solve the vulnerabilities in existing ACO models and leverage the expertise of our providers,” said Nisha Hammel, AHCA/NCAL vice president of Population Health Management.
The Savings Case Is There
Analysts at ATI Advisory estimate the proposed changes could generate more than $2 billion in annual Medicare savings. The underlying data backs that up: in 2023, Medicare spending on nursing facility residents aligned with an ACO was 11% lower than for unaligned residents. For assisted living, the gap was even wider at 19%.
CMS leadership has talked about accelerating ACO impact tenfold — which advocates say makes this the right moment to push for a purpose-built model.
Not Everyone’s on Board
There is resistance. Physician-led ACO advocates argue that shifting attribution away from clinicians toward facilities could undermine the clinical accountability that makes ACOs work in the first place. Tom Haithcoat of Ceptor Consulting says the better fix is deeper partnerships within existing models — not a new facility-centric structure.
Still, AHCA says the data is clear: the current setup isn’t working for most of the long-term care sector, and with the LEAD model still taking shape, there’s a genuine opening to get it right this time.
