A new white paper from the American Health Care Association/National Center for Assisted Living (AHCA/NCAL) released on Feb. 26 and shared with the Centers for Medicare and Medicaid Services (CMS) recommends the agency’s development of an accountable care organization (ACO) for the long-term care (LTC) sector.

Developed by AHCA/NCAL's ACO workgroup, the white paper focuses on value-based care model alignment policies within LTC, declaring existing ACO models do not fully support LTC residents because they are designed primarily for seniors living in the broader community and are centered around clinician-driven care.

Titled, “Advancing Accountable Care for Long Term Care Residents," the paper makes a slew of recommendations to realize this call for a new LTC ACO model meant to encompass both skilled nursing facilities (SNFs) and assisted living (AL) communities.

“Our recommendations aim to solve the vulnerabilities in existing ACO models and leverage the expertise of our providers in support of CMS's goal to align financial incentives with improved health outcomes for all Medicare beneficiaries," said Nisha Hammel, AHCA/NCAL vice president of population health management. “This is an opportunity to address the realities of long-term care settings and advance coordinated, quality care. We look forward to working with CMS on advancing these value-based solutions."

Aligning for LTC Residents

This structural misalignment leaves many LTC providers without a clear pathway for meaningful participation in ACOs and value-based care, AHCA/NCAL said. Tailoring a model that addresses the unique needs of the LTC population would unlock substantial opportunities for increased participation, improved outcomes, and Medicare savings.

Specific recommendations for CMS in the development of a possible LTC ACO model, include:

• A specific attribution methodology to improve participation and accountability.

• Financial incentives and flexible risk-sharing options.

• Streamlining quality measurement.

• Incentivizing interoperable technology adoption.

• Promoting wellness and chronic disease management, especially in the AL setting.

• Prioritizing underserved LTC populations and facilities with limited resources or infrastructure.
  
  

AHCA/NCAL said recent analysis by ATI Advisory found that Medicare fee-for-service (FFS) spending for LTC residents aligned to an ACO is significantly lower than spending for residents who are not aligned. “In 2023, Medicare FFS spending on the average nursing facility and assisted living resident aligned to an ACO was 11 percent and 19 percent less, respectively, than unaligned residents. ATI Advisory also estimates that adopting the recommended model could generate more than $2 billion in savings to Medicare each year,” AHCA/NCAL said.

Opportunity Is There

The white paper explains that evidence from LTC participation in models such as ACO REACH and Institutional Special Needs Plans (I-SNPs) demonstrates that when financing is aligned with care delivery, avoidable hospitalizations decline and resident experience improves.

“AHCA/NCAL believes that a defined pathway for LTC attribution and participation - or a dedicated LTC ACO track - within the LEAD model is essential to close these gaps, strengthen accountability, and ensure that value-based care fulfills its promise for one of Medicare’s most vulnerable populations,” according to the white paper.

The two biggest elements to include in LEAD, according to the white paper, are that CMS should include Facility TIN attribution in LEAD so SNFs and AL communities can manage their beneficiaries’ care more efficiently and avoid fragmentation across multiple ACOs, and secondly, CMS should use the LTI Flag [used to identify those in long-term institutionalized settings] to determine eligibility for high-needs LTC populations so that approximately one-third of beneficiaries currently excluded due to technical ineligibility-rather than actual need are eligible.

CMS late last year announced that the Long-term Enhanced ACO Design (LEAD) Model will launch following the conclusion of the ACO REACH Model at the end of 2026. Sector experts see the model as a bid by CMS to get more residents in LTC settings in ACOs.

Recommendations Draw Praise

Martin Allen, former senior vice president of reimbursement policy for AHCA/NCAL, supports the work of his former workplace. He said while the LEAD model does focus on special needs populations and dual-eligibles, it also includes homebound patients.

“AHCA/NCAL has always been concerned that the community-based focused of ACOs does not properly account for residents in long-term care,” he said. “We should also keep in mind that CMMI [CMS Innovation Center] puts out many models to see, which will work best and save the most money. The LEAD model goes for 10 years. There’s no reason they can’t do a LTC model as AHCA/NCAL suggests for the same period of time.”

Key Player Sees Plusses for Operators

Also, strongly in favor of the AHCA/NCAL’s effort is Eric Palm, chief growth officer, Provider Partners Connect Care, who said LTC residents have been underserved by traditional ACO structures, and the industry needs models that reflect the clinical complexity and operational realities of SNFs.

“We were honored to participate alongside AHCA in the workforce and policy discussions that helped shape these recommendations and believe this is an important step toward more practical, sustainable value-based care for operators,” he said.

Provider Partners contracts with SNFs, AL communities, and personal care homes to offer tech-enabled VBC. The company also combines long-term care expertise and real-time clinical intelligence in an ACO REACH model partnership.

From an operator perspective, Palm said the key takeaway with the recommendations is alignment. “Value-based care is coming, but it must work financially and operationally for facilities. AHCA’s recommendations around predictable benchmarks, flexible risk, and direct facility participation reflect what providers need to engage with confidence.”

What makes the announcement important, he added, is the focus on execution, not theory. Facility-based attribution, simpler measures, and better data access are exactly what operators need to participate successfully. Having been involved in the AHCA workgroup discussions, we saw firsthand the industry’s focus on making accountable care workable at the facility level,” Palm said.

Optional No More

Provider Partners also sees the white paper as a reflection of something they are hearing across the market: value-based care in LTC is no longer optional, it’s becoming foundational.

For Marc Zimmet, CEO, Zimmet Healthcare Services Group, the issue offers some important points from the reimbursement and financial perspectives, as he believes LTC managed models share substantial structural similarities.

“From a financial perspective, ACOs and I-SNPs occupy the same branch of the reimbursement family tree. In practice, they confront many of the same pressures, particularly an environment shaped by volatility in ancillary services,” he said.

Medicare Part B therapy utilization has declined, especially in outsourced arrangements. Many providers depend on in-house therapy models to preserve margin, and regional variation in these trends is significant, Zimmet noted. “At the same time, specialty products and services, often driven by physician groups addressing historically underserved clinical needs, introduce additional cost layers that can destabilize shared savings constructs.”

And oversight in this area becomes more complex when providers hold financial interests in both the managed model and the specialty service platform, he said.

Guiding Lights

AHCA/NCAL said in building tracks within the LEAD model or creating a new model designed to address value-based care in the LTC population, it is guided by the following principles:

1. Center a model or a LEAD track on the LTC population

2. Address systemic gaps in long-term and post-acute care

3. Advance quality and cost efficiency

4. Design for diverse provider participation

5. Balance risk and reward thoughtfully

6. Ensure data access and interoperability

7. Create a stable and predictable model environment
   
   

“It is critical that CMS ensure payment models reflect the complexity of specialized populations rather than defaulting to frameworks designed for community-dwelling individuals,” the white paper said. “Ultimately, CMS has the opportunity to create a distinct LTC-focused track in LEAD that aligns financial, clinical, and quality goals with the realities of long-term care, advancing the shift towards accountable care relationships for all Medicare FFS beneficiaries.”

Questions or comments? Contact Patrick Connole at pconnole@parkplacelive.com.