The SNF operators building new clinical programs without large capital reserves are not doing it by waiting for a better balance sheet. They are finding partners who have a financial stake in the same problem and letting that shared interest fund the solution.
A managed care organization that cannot place dialysis-dependent members has a financial problem. An SNF that builds an in-house dialysis unit solves it. That alignment of interest is the foundation of every successful strategic partnership in this industry and operators who understand it are building clinical programs that would have taken years to self-fund, in months, with outside capital.
This is not a financing strategy. It is a market positioning strategy. And the SNFs using it are pulling ahead of the ones still waiting for margin improvement before they can invest in anything new.
Table of Contents
The Partnership Ecosystem SNF Operators Are Missing
Before getting into specific partnership models, it is worth understanding the scale of the value-based care ecosystem that most SNF operators are operating outside of.
In 2024, there are about 13.7 million people with Traditional Medicare aligned to an ACO meaning ACOs are now serving nearly half of the people with Traditional Medicare (CMS, 2024). That is 480 accountable care organizations actively managing cost and quality across a patient population that includes the same residents SNFs are competing to serve.
Now consider how many SNFs are inside that ecosystem: less than 2,000 SNFs roughly 10% of all facilities actively participate in ACOs. And nearly 70% of ACOs have no SNF representation whatsoever (NAACOS / AHCA, 2024).
That gap between the ACO ecosystem managing half of Traditional Medicare and the 90% of SNFs operating outside it is the single largest untapped strategic partnership opportunity in post-acute care. The operators inside that gap are competing for referrals on the terms the market sets. The ones building ACO relationships are shaping those terms in their favor.
The same pattern holds with managed care organizations. As MA enrollment pushes past 55% of Medicare beneficiaries, the MCOs managing that enrollment have enormous financial incentives to direct members to high-performing, clinically capable SNF partners. The facilities that have built those relationships are not competing for referrals. They are receiving them.
What Being a Preferred Partner Actually Requires
Preferred network status with an ACO or MCO is not a relationship that gets built over lunch. It is an operational commitment and understanding what that commitment looks like is what separates operators who talk about partnership from those who actually achieve it.
More than half of ACOs have established preferred SNF networks, with the most common expectations being cost and quality data sharing (62% of ACOs), automatic notification of patient admission or discharge (53%), and meeting length-of-stay targets (52%) (AJMC, 2024).
Those three requirements tell you exactly what operational capabilities a SNF needs to build preferred partner relationships. The ability to share cost and quality data means your outcomes are tracked, documented, and reportable on demand not assembled when someone asks. Automatic admission and discharge notification means your clinical information system can send real-time alerts to ACO care coordinators, not a fax 24 hours after the fact. Meeting length-of-stay targets means your care planning and discharge coordination is optimized around the patient’s recovery trajectory, not around maximizing Medicare per-diem days.
These are technology and process requirements as much as they are relationship requirements. The SNF that cannot share data electronically, cannot notify partners automatically at admission and discharge, and cannot demonstrate consistent length-of-stay performance is not a viable preferred partner regardless of how strong the personal relationship with the discharge planner is.
How MCOs Fund Clinical Program Innovation
The most direct form of strategic partnership in skilled nursing and the one most operators are not pursuing is getting a managed care organization or hospital system to financially back a clinical program build.
The model works like this. An operator identifies a specific high-acuity patient type that their referral partners are struggling to place dialysis-dependent members, ventilator-dependent patients, complex CHF cases. The operator approaches the referral partner the MCO, the hospital, the ACO with a credible clinical and financial case: here is the patient population you cannot place, here is the program we would build to serve them, here is the revenue model for both of us, here is what we need to fund the build.
When the referral partner has a strong enough financial interest in the solution when a managed care organization is spending significant dollars on out-of-network dialysis placements because there is no in-network SNF that can provide in-house dialysis the capital conversation becomes a business case conversation rather than a loan application.
In documented cases, MCOs have financially backed dialysis unit expansions at SNFs, adding a second shift once the initial program demonstrated the placement volume. What started as a medium-term ROI investment turned into a short-term return because the partner’s volume commitment was built into the model from the start. The American Heart Association partnership model where SNFs pursue heart certification through collaboration with local hospitals and outpatient centers follows the same pattern. The hospital has a financial and quality interest in having a reliable post-discharge placement for CHF patients. The certification creates the referral pathway. The partnership structures the clinical program around the partner’s need.
Hospital Partnerships and the $57 Billion Referral Market
The financial scale of what strategic partnerships are competing for is significant.
Medicare spent nearly $57 billion on post-acute care in 2023 with skilled nursing facilities representing the largest share of that spending (MedPAC, 2023). Hospital systems, ACOs, and managed care organizations are all actively trying to manage that spending down and the SNF partners that help them do it are the ones that receive consistent, growing referral volume.
Hospitals are building preferred SNF networks not just to improve discharge efficiency, but because their own Hospital Readmissions Reduction Program scores are affected by how well their discharge partners manage the post-acute episode. A hospital whose preferred SNF partners consistently achieve low readmission rates gets a better HRRP score. That financial alignment creates a genuine institutional interest in the hospital’s ability to identify, develop, and maintain high-performing SNF relationships.
The SNF operators who understand this are positioning themselves as solutions to the hospital’s HRRP problem — not just as discharge destinations. That reframing changes the conversation. A facility that approaches a hospital discharge planning director with its readmission rate data, its length-of-stay performance, and a proposal for closer clinical coordination is having a different conversation than one that simply has beds available.
University and Data Partnerships | The Long Game
Not every strategic partnership is about capital or referral volume. Some of the most durable and differentiating partnerships in skilled nursing are built around outcomes data.
Academic medical centers and research universities need access to clinical outcomes data from real-world care settings. SNFs with robust clinical documentation systems and consistent data collection are natural research partners and the research relationship creates something the capital relationship does not: published evidence about the quality of care at that facility.
A SNF that has partnered with a university to study outcomes in its memory care unit, or that has contributed data to a regional geriatric care research initiative, has a story to tell referral partners and families that no marketing campaign can replicate. It is also a relationship that costs relatively little to build the academic partner often brings the grant funding and generates credibility that compounds over time.
These partnerships require the same operational foundation as ACO and MCO relationships: reliable clinical documentation, consistent data collection, and the ability to report outcomes in a structured and defensible format.
What This Means for Your Operations
Every strategic partnership model described in this blog has the same operational prerequisite: your clinical data has to be accurate, accessible, and shareable.
An ACO that wants automatic admission and discharge notifications needs your clinical information system to be capable of sending them. An MCO that wants quality data sharing needs your outcomes to be tracked in a system that can produce that data on demand. A hospital partner that wants readmission rate transparency needs your clinical documentation to be complete enough to support that analysis.
Integrated clinical documentation that connects MDS workflows, care planning, incident reporting, and outcomes tracking in a single platform is what makes a SNF a viable preferred partner. Facilities running disconnected systems separate platforms for clinical documentation, scheduling, and reporting cannot produce the data integration that preferred network relationships require.
The partnership opportunity is real and it is open. The operational infrastructure to access it is what most facilities are still building.
What Being a Preferred Partner Actually Requires
Preferred network status with an ACO or MCO is not a relationship that gets built over lunch. It is an operational commitment and understanding what that commitment looks like is what separates operators who talk about partnership from those who actually achieve it.
More than half of ACOs have established preferred SNF networks, with the most common expectations being cost and quality data sharing (62% of ACOs), automatic notification of patient admission or discharge (53%), and meeting length-of-stay targets (52%) (AJMC, 2024).
Those three requirements tell you exactly what operational capabilities a SNF needs to build preferred partner relationships. The ability to share cost and quality data means your outcomes are tracked, documented, and reportable on demand not assembled when someone asks. Automatic admission and discharge notification means your clinical information system can send real-time alerts to ACO care coordinators, not a fax 24 hours after the fact. Meeting length-of-stay targets means your care planning and discharge coordination is optimized around the patient’s recovery trajectory, not around maximizing Medicare per-diem days.
These are technology and process requirements as much as they are relationship requirements. The SNF that cannot share data electronically, cannot notify partners automatically at admission and discharge, and cannot demonstrate consistent length-of-stay performance is not a viable preferred partner regardless of how strong the personal relationship with the discharge planner is.
How MCOs Fund Clinical Program Innovation
The most direct form of strategic partnership in skilled nursing and the one most operators are not pursuing is getting a managed care organization or hospital system to financially back a clinical program build.
The model works like this. An operator identifies a specific high-acuity patient type that their referral partners are struggling to place dialysis-dependent members, ventilator-dependent patients, complex CHF cases. The operator approaches the referral partner the MCO, the hospital, the ACO with a credible clinical and financial case: here is the patient population you cannot place, here is the program we would build to serve them, here is the revenue model for both of us, here is what we need to fund the build.
When the referral partner has a strong enough financial interest in the solution when a managed care organization is spending significant dollars on out-of-network dialysis placements because there is no in-network SNF that can provide in-house dialysis the capital conversation becomes a business case conversation rather than a loan application.
In documented cases, MCOs have financially backed dialysis unit expansions at SNFs, adding a second shift once the initial program demonstrated the placement volume. What started as a medium-term ROI investment turned into a short-term return because the partner’s volume commitment was built into the model from the start. The American Heart Association partnership model where SNFs pursue heart certification through collaboration with local hospitals and outpatient centers follows the same pattern. The hospital has a financial and quality interest in having a reliable post-discharge placement for CHF patients. The certification creates the referral pathway. The partnership structures the clinical program around the partner’s need.
Hospital Partnerships and the $57 Billion Referral Market
The financial scale of what strategic partnerships are competing for is significant.
Medicare spent nearly $57 billion on post-acute care in 2023 with skilled nursing facilities representing the largest share of that spending (MedPAC, 2023). Hospital systems, ACOs, and managed care organizations are all actively trying to manage that spending down and the SNF partners that help them do it are the ones that receive consistent, growing referral volume.
Hospitals are building preferred SNF networks not just to improve discharge efficiency, but because their own Hospital Readmissions Reduction Program scores are affected by how well their discharge partners manage the post-acute episode. A hospital whose preferred SNF partners consistently achieve low readmission rates gets a better HRRP score. That financial alignment creates a genuine institutional interest in the hospital’s ability to identify, develop, and maintain high-performing SNF relationships.
The SNF operators who understand this are positioning themselves as solutions to the hospital’s HRRP problem not just as discharge destinations. That reframing changes the conversation. A facility that approaches a hospital discharge planning director with its readmission rate data, its length-of-stay performance, and a proposal for closer clinical coordination is having a different conversation than one that simply has beds available.
University and Data Partnerships | The Long Game
Not every strategic partnership is about capital or referral volume. Some of the most durable and differentiating partnerships in skilled nursing are built around outcomes data.
Academic medical centers and research universities need access to clinical outcomes data from real-world care settings. SNFs with robust clinical documentation systems and consistent data collection are natural research partners and the research relationship creates something the capital relationship does not: published evidence about the quality of care at that facility.
A SNF that has partnered with a university to study outcomes in its memory care unit, or that has contributed data to a regional geriatric care research initiative, has a story to tell referral partners and families that no marketing campaign can replicate. It is also a relationship that costs relatively little to build the academic partner often brings the grant funding and generates credibility that compounds over time.
These partnerships require the same operational foundation as ACO and MCO relationships: reliable clinical documentation, consistent data collection, and the ability to report outcomes in a structured and defensible format.
What This Means for Your Operations
Every strategic partnership model described in this blog has the same operational prerequisite: your clinical data has to be accurate, accessible, and shareable.
An ACO that wants automatic admission and discharge notifications needs your clinical information system to be capable of sending them. An MCO that wants quality data sharing needs your outcomes to be tracked in a system that can produce that data on demand. A hospital partner that wants readmission rate transparency needs your clinical documentation to be complete enough to support that analysis.
Integrated clinical documentation that connects MDS workflows, care planning, incident reporting, and outcomes tracking in a single platform is what makes a SNF a viable preferred partner. Facilities running disconnected systems separate platforms for clinical documentation, scheduling, and reporting cannot produce the data integration that preferred network relationships require.
The partnership opportunity is real and it is open. The operational infrastructure to access it is what most facilities are still building.
Frequently Asked Questions
A preferred SNF network is a group of skilled nursing facilities that an accountable care organization has identified as high-performing partners for managing post-acute care. ACOs direct Medicare patients to preferred SNFs based on quality, cost, and care coordination performance. More than half of ACOs have established preferred networks, with common requirements including quality data sharing, automatic admission and discharge notification, and consistent length-of-stay performance. Preferred SNF status typically means more consistent, higher-volume referral flow from ACO-affiliated hospitals.
The most effective approach is to start with data know your readmission rate, your length-of-stay performance, your PDPM accuracy, and your Five-Star quality measures before you approach an ACO. ACOs are looking for partners who can demonstrate performance, share data electronically, and coordinate care across the post-acute episode. Approaching an ACO care coordinator or hospital discharge planning director with your outcomes data and a proposal for clinical coordination is a more productive conversation than simply expressing interest in being included in a preferred network.
In documented cases, managed care organizations have financially backed clinical program expansions at skilled nursing facilities particularly dialysis units and specialty care programs when the operator presented a credible model showing how the program solves the MCO's placement problem. The financial backing typically takes the form of volume commitments, guaranteed referral flow, or direct capital contribution in exchange for preferred placement access. The conversation works when the operator approaches it as a business case identifying the MCO's financial pain point and showing how the clinical program addresses it.
The most common data requirements include cost and quality metrics such as readmission rates, length-of-stay performance, and PDPM accuracy; real-time or near-real-time admission and discharge notifications; and care plan status and clinical transition documentation. Some ACOs also require regular performance reviews comparing the SNF's outcomes against network benchmarks. These requirements make electronic clinical documentation systems and data sharing capabilities a prerequisite for preferred partner status not an optional upgrade.
The SNF operators funding innovation through strategic partnerships are not waiting for better margins. They are identifying partners who have a financial stake in the clinical problem being solved and building relationships that fund the solution before the balance sheet can.
The ACO ecosystem serves nearly half of all Traditional Medicare beneficiaries. Less than 10% of SNFs have any active relationship with it. That is not a static situation. It is a window and operators who build the clinical performance, the data sharing capability, and the referral relationships to participate in value-based care networks will be the ones receiving consistent referral volume when the window closes.
The partnership opportunity is open. The operational infrastructure to access it is where the work starts.
If you want to see how LTC Apps supports the clinical documentation and data sharing capabilities that preferred SNF partner relationships require request a demo and we will walk you through it.
