Post-Acute Care 2.0

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I also just happen to be teaching a live webinar after business hours on September 25, 2025 on the TEAM Model. It’s for PTs, OTs, and case managers for CEUs, but it can be attended by anyone, of course. Just click “live webinars” in the navigation bar and register there. I’d love to see you! And if you are reading this after September 25, 2025, it will be available to attend later as an asynchronous CEU choice.

Table of Contents

• The Frame

• Field Notes

• The Pulse

• Field Kit

• Worth Revisiting

• One Quote

The Frame

Value-based care models are mostly focused on health systems, physicians, and acute care hospitals. Post-acute providers have primarily been the target of spending reduction efforts when the model participants are looking for “levers.”

Models like accountable care organizations (ACOs) are most successful for participants when patients seek upstream, appropriate, evidence-based, high-value health care services. This leads to lower spending in acute and post-acute setting, interventional medical specialist care, advanced imagining, etc. Team-based, advanced primary care providers independent of health systems have seen the most success. Payers can offer them structures such as higher reimbursement and additional retrospective incentives for accepting accountability for their patients’ spend and outcomes.

ACOs that include hospitals have to manage the challenge of needing to fill “heads in beds” in the hospital. They can find themselves in a catch-22 of sorts. Improving in leading indicators such as more upstream care, utilization of appropriate, high-value, lower cost services, improved access to advanced primary care—should logically reduce the need for hospitalizations. Good for shared savings and advanced primary care contracts, but can present challenges for hospitals. Open hospital beds reliant on fee-for-service admissions can negatively impact budgets in the short-term.

Health system ACOs will commonly focus on reducing post-acute variability and utilization appropriateness, especially if they don’t own the post-acute providers. Reducing discharges to inpatient post-acute settings, partnering with patients and their care partners to ensure safe transitions of care and expedient transitions to the home setting, and sharing quality data with patients and care partners when they are choosing a post-acute provider are strategies these ACOs may employ to reduce avoidable spend and readmissions.

Examples of ACO models in Traditional Medicare are the Medicare Shared Savings Program (MSSP), a permanent model, and the ACO REACH program, an Innovation Center model. Other payers can and do use their available flexibility in benefit design to create similar models and cater their structure to the capabilities of a participant.

Here’s one way an advanced primary care practice’s alternative payment model participation may look when they fully embrace value-based reimbursement structures:

Participation in ACO REACH and full-risk contracts with Medicare Advantage plans, as well as episodes of care programs for younger populations, if the practice sees patients of all ages. Commercial payers can also employ techniques that help “high cost claimants” better manage their health and use of healthcare.

Bonus

Here’s an excellent episode of one of my favorite podcasts, Relentless Health Value, where the host Stacey Richter talks about managing high-cost claimants with Dr. Eric Bricker. I’m a big fan of them both:

Models like acute episodes of care programs are most successful when patients’ care journeys after an acute event (defined for this article as an inpatient admission and/or procedure in the inpatient or hospital outpatient department setting) are “optimal.” I like to define that as a quick return to patient homeostasis. How is that typically achieved? The patient declines as little as possible physically during the acute admission or procedure, transitions safely to the next site of care, and as often as possible, returns directly home to continue to recover and rehabilitate.

The Bundled Payments for Care Improvement-Advanced Model or, BPCI-A, (ending December 31, 2025) and the Comprehensive Care for Joint Replacement Model, or CJR, (ended in 2024) are well-known Traditional Medicare programs designed and run by the CMS Innovation Center, or CMMI. Medicare Advantage plans and commercial payers also can and do design acute episodes of care programs using the flexibility in benefit design they are afforded.

In both ACOs and acute episodes of care programs, participating providers do not need to include post-acute providers. However, astute post-acute providers can partner with these entities to help them succeed, and can consider negotiating with them for financial rewards based on their contribution to the financial success of the program. Remember, in VBC models, financial rewards are only possible if quality of care either improves or does not decline from baseline.

The bottom line: Providers who have either chosen to or have been mandated into (CJR and the upcoming Transforming Episode Accountability Model, or TEAM) alternative payment models (anything NOT fee-for-service that’s all volume-based for success) will strategically prioritize investments in care transformation that help them meet their financial goals. After all, healthcare is a business in America.

If I’m a primary care practice, the teams I develop and strategies I employ will focus on things like care management, access to care, care coordination, patient engagement, etc., with the goal of more days at home and lower use of unnecessary and avoidable high-cost interventions.

If I’m a hospital in an episodes of care program, the teams I develop and strategies I employ will focus on acute care mobility, patient and care partner education, acute care team transformation, partnerships with home-based and outpatient care providers to transition as many patients home as possible, and identifying and appropriately transitioning patients who need inpatient post-acute to the collaborative and high-value providers in the community.

So if I was a post-acute provider, especially a skilled nursing facility owner or operator who depends almost entirely on admissions after acute care admissions at the local hospitals, I would be investing in data, expertise, and the capabilities needed to partner in new ways with the health systems and advanced primary care teams in my geography. I’d understand my data-driven improvement opportunities and proactively approach my local partners with ways to make them more successful. And I would understand the success levers of each model at least as well as the participants themselves.

Committing to a new paradigm is now crucial to success over the next 1-3 years.

While I’ve been sharing this perspective and the inevitability of this shift with post-acute providers for over a decade, we are truly entering a new reality. Mandatory alternative payment models, models focusing on appropriate care and not just quality of interventions that have already happened, will change the post-acute landscape. Add:

• a growing Medicare Advantage population with lower utilization of post-acute care and generally lower rates that that of Traditional Medicare

• the 2026 Outpatient Prospective Payment System (OPPS) proposed rule that includes a removal of the inpatient-only (IPO) list, which will reduce admissions to hospitals that lead to SNF-qualifying stays

• an Administration laser-focused on reducing “waste, fraud, and abuse,” (avoiding high-variability, low-value care that doesn’t correlate via data to better outcomes)

• CMS's new Wasteful and Inappropriate Spending Reduction model (WISeR) and the Ambulatory Specialty Model (ASM) both incentivize more conservative, evidence-based, upstream care. Their shared goal: reduce avoidable and unnecessary high-acuity care—and by extension, reduced post-acute utilization.

—and I don’t know what else post-acute providers, especially SNFs, need to know to prioritize care transformation and new, high-value revenue strategies. The time for denial is over.

My prediction: organizations clinging to fee-for-service models will find themselves increasingly marginalized with dwindling referrals.

Field Notes

Trella Health’s 2025 Post-Acute Care Trend Industry Report (linked here)

Their 2025 Post-Acute Care Industry Trends Report provides compelling evidence that post-acute providers must adapt to a Value-Based Care and Medicare Advantage-dominated landscape or risk obsolescence. Some standout snips from the Report:

• "The shift toward value is accelerating. Medicare Advantage penetration continues to rise, and commercial payers are extending VBC expectations deeper into the post-acute sector," the report states. This transformation is driving care away from facilities and toward home-based models, with home health referrals rising for the first time since 2020.

• The data shows MA beneficiaries use post-acute services differently, with shorter stays and more selective admissions. Providers who embrace this change stand to benefit: "Patients who adhered to home health discharge instructions had a 30-day readmission rate of 12.7%, compared to 15.1% for those who did not"—demonstrating measurable value to the entity taking financial risk when patients who are recommended to home health accept the referral.

• "Providers that invest now in the systems, talent, and leadership strategies necessary to thrive under VBC will be better positioned to secure preferred network status, improve patient satisfaction, and achieve sustainable margin growth in the years ahead."

Spending on Postacute Care After Hospitalization In Commercial Insurance and Medicare Around Age Sixty-Five (article linked here)

This should be mandatory reading for all post-acute providers and all acute care hospital providers preparing to succeed in the TEAM model

The Pulse

Medicare's $60 Billion Post-Acute Care Problem Is A Call for Provider Adaptation

Medicare spends over $60 billion per year on post-acute care services. A staggering 48% of that goes to skilled nursing facility (SNF) services, making them the largest slice of the post-acute care pie. But here's the problem: this spending varies dramatically by geography and shows little correlation with better patient outcomes.

Greater healthcare spending in SNFs (primarily through high admission rates and longer lengths of stay) is not correlated with better outcomes. The Bundled Payments for Care Improvement-Advanced (BPCI-A) model demonstrated that reduced post-acute spending—through fewer SNF discharges and shorter stays—led to lower costs without compromising quality. This successful experiment has evolved into the mandatory Transforming Episode Accountability Model (TEAM), launching January 1, 2026. 25% of the acute care hospitals in the country are mandated into this model, and failure to succeed will have major financial impacts.

Why hasn't this issue received more attention? According to David Grabowski, a leading researcher at Harvard Medical School and an advocate for SNF reform, ageism has influenced the lack of scrutiny on cost and quality concerns in SNFs. COVID-19 finally brought these issues into plain sight, but memories fade quickly.

Times are changing, however. With tightening budgets and a growing Medicare population, spending that doesn't yield better outcomes is being disrupted at the root. As I note in “The Frame,” policymakers are increasingly shifting incentives through alternative payment models, and where CMS leads, other payers follow.

Many of us working in healthcare or health tech don't realize how dependent post-acute providers are on Traditional Medicare/Fee-for-Service reimbursement structures. It’s their life blood. 

Here are the main takeaways for post-acute providers:

1. The fee-for-service era has an expiration date, and it’s being accelerated like gas on a fire by policymaker priorities, budget constraints, and poor American health outcomes that can no longer be ignored.

2. Home is the new healthcare hub and will become the default post-acute setting. The question hospital teams ask now? “Why not home?” Add technology, changes in health policy accelerated by the COVID pandemic, and consumer preferences to the other drivers of healthcare reform and home is an increasingly viable and popular way to receive care.

3. Risk-based partnership will drive provider success regardless of care setting. The successful arrangements structured and reconciled around solid data align incentives around preventing readmissions, optimizing recovery trajectories, and managing total cost of care.

Field Kit

Action Steps for Providers

For post-acute leaders and clinicians who want to navigate this transforming landscape, here are some action steps to consider:

1. Conduct a comprehensive assessment of your organization's readiness for value-based care, including data analytics capabilities, care coordination resources, and clinical protocols.

2. Analyze your current payer mix and referral patterns to identify exposure to Medicare Advantage and other value-based programs.

3. Develop relationships with ACOs, Medicare Advantage plans, and other risk-bearing entities in your market, positioning your organization as a valuable partner in managing total cost of care.

4. Invest in technologies that support care coordination, remote monitoring, and outcomes tracking.

5. Redesign clinical workflows to emphasize efficiency, standardization, and evidence-based interventions.

6. Develop specialized programs for high-risk, high-cost patient populations, demonstrating your ability to manage complex care needs effectively.

7. Educate clinicians about new payment models and their implications for clinical practice, fostering a culture of continuous improvement and cost-consciousness.

8. Establish dashboards to track key performance indicators valued by risk-bearing entities, including readmission rates, functional improvement, and patient satisfaction.

Worth Revisiting

An article I wrote last year on hospital mobility programs. I predict we will see more of them soon!

One Quote:

"The future of post-acute care will be defined by technology-enabled home care models that leverage remote monitoring and artificial intelligence. Organizations that can seamlessly integrate these technologies into their care delivery will not only improve patient outcomes but will also position themselves as preferred partners for value-based care arrangements with payers."

• Dr. Bruce Leff, Professor of Medicine at Johns Hopkins University School of Medicine and Director of The Center for Transformative Geriatric Research

This insight was shared during Dr. Leff's presentation at the 2024 National Association for Home Care & Hospice (NAHC) Annual Conference. For more of Dr. Leff's perspectives on home-based care models, visit: Johns Hopkins Medicine Faculty Profile