Following an overview of the state of post-acute care services in Medicare, the Medicare Payment Advisory Commission (MedPAC) identified at its December 4, 2025 meeting four research and exploration focus areas for the coming year related to post-acute care (PAC) services. These include:

• Evaluating the new home health agency and skilled nursing facility (SNF) case mix systems;
• Monitoring the impact of the soon-to-be implemented TEAM bundled payment model on PAC settings;
• Comparing utilization in Medicare Advantage (MA) with Medicare Fee-For-Service; and
• Examining MA’s impact on the SNF and inpatient rehabilitation facility (IRF) financial performance.

LeadingAge welcomes MedPAC taking a closer look at MA’s role in provider payment adequacy and beneficiary PAC access issues.

In response to the overview of the state of PAC services, commissioners expressed interest in strategies to reduce PAC expenditures, including alternative payment models and site-neutral PAC payment approaches among other areas.

Other themes emerged around potential future work of the Commission:

• Need for Patient Experience and Functional Assessment metrics. MedPAC supports collecting and reporting SNF and IRF patient experience data and improving the reliability of functional assessment data across PAC settings.
• Understanding Factors in Hospital Backlogs and Placement Delays. Commissioners expressed concerns about patients remaining in hospitals due to PAC placement delays and requested data to determine the scope and impact of these issues including the role MA plan prior authorizations play and why initiating home health services often take so long.
• Consensus that All Hospital Days Should Count for SNF 3-day Stay Requirement.  Commissioners seem to agree that the 3-day inpatient hospital stay requirement should count all days that an individual patient is in a hospital including observation days. It is unclear whether this may become a recommendation to Congress at some point.
• Questions about whether payment adequacy factors should be reexamined.  Commissioner Gokhan Metan suggested a number of new metrics be considered including: bed and staffing shortages, small provider margins (e.g. rural vs. urban), whether there are rural SNF deserts, case mix trends to determine if SNFs are now “mini acute care hospitals” and how IRFs comply with intense therapy requirements. Other commissioners suggested staff turnover was a better metric than staffing levels. How MedPAC measures geographic access was also challenged suggesting that defining it as the number of SNFs by county didn’t account for drive times that might be prohibitive. This is a great point as counties like San Bernadino can cover thousands of square miles. It will be interesting to see if action is taken to revise the current factors MedPAC uses going forward to assess payment adequacy
• Interest in understanding dramatic increase in IRF growth. It was noted that IRF spending in Medicare has grown 56% in past 10 years but there is much “uncertainty about the value of this care.”

Commissioners also discussed value-based payment programs in PAC with general sentiment that the payment incentives are not large enough to incentivize change. Some commissioners suggested that a significantly larger proportion of provider payment should be tied to provider performance on a more extensive set of metrics. Staff turnover was a metric of particular interest in the discussion.

We expect these debates, dilemmas and discussions to continue in the new year. We will continue to monitor and weigh in.