In its recently released June 2026 Report to Congress, the Medicare Payment Advisory Commission (MedPAC) examined Medicare Advantage (MA) enrollment and its impact on hospital and post-acute care (PAC) providers’ finances.

These providers include skilled nursing facilities (SNFs), home health agencies (HHAs), and inpatient rehabilitation facilities (IRFs).

In a blog analyzing the report, Rohini Achal, population health analyst at the American Health Care Association/National Center for Assisted Living (AHCA/NCAL), said using cost report data, MedPAC found that growth in MA enrollment was not linked to meaningful changes in all-payer profit margins across hospitals, SNFs, or HHAs.

“MedPAC noted that interviewed providers reported higher administrative costs with approvals of care [prior authorizations], care extensions, and appealing denials. Providers also raised concerns about payment, network adequacy, and for SNFs specifically, inability to capture bad debt,” Achal said.

SNF data highlights include: 

-              Overall, MA enrollees had an 11.2 percent longer average hospital (inpatient prospective payment systems) length of stay compared to fee-for-service (FFS) beneficiaries, driven primarily by patients discharged to SNF, HHA, and IRF settings. 

• The average hospital length of stay was19.6 percent longer for MA beneficiaries discharged to SNFs compared to their FFS counterparts.  

  
  

-              Increases in MA penetration were associated with small declines in total SNF facility days (-0.6 percent), revenue (-0.6 percent) and costs (-0.5 percent), but no statistically significant change in overall all-payer SNF margins (-0.1 percent).  

Length of Stay Gets a Look

In reviewing the MedPAC findings, an industry source said the longer length of stay in hospital for MA enrollees may be an angle to negotiate with health plans to accept admissions sooner and quicker from hospitals to help MA plans with their length of stay performance.

“It depends on how the MA plans are paying hospitals. If per diem, then that is an incentive to discharge sooner. If it’s a DRG-like payment then they don’t care if their length of stay is longer other than it results in greater risk of adverse events and greater deconditioning and further decline that may require longer PAC services,” the source said.

Martin Allen, former senior vice president of reimbursement policy at AHCA/NCAL, concurs with the industry source and noted further that this is an example where MedPAC does not have sufficient data to do a serious analysis at this time.

“Medicare cost reports used in the analysis do not report Medicare Advantage days or revenue separately so they cannot be compared to traditional Medicare or even Medicaid,” he said. “MA is grouped in ‘other,’ which is a catch-all category. It will be two to three years before there is meaningful MA data available to CMS and therefore MedPAC, as well.”  

Other Highlights

Other MedPAC notes pertaining to SNFs include:

-              SNFs with I-SNPs had a smaller decline in all-payer margin associated with an increase in MA market penetration compared to those without I-SNPs, but the estimates were non-significant. 

-              Changes in MA penetration may affect subgroups of SNFs differently; smaller SNFs had smaller negative payment associations than larger SNFs.  

Comments or questions on this article? Contact Patrick Connole at pconnole@parkplacelive.com.