Medicare Advantage Growth Drives Changes in Post-Acute Care

A new report released today by Trella Health revealed major shifts are underway in post-acute care as Medicare Advantage (MA) enrollment grows, care transitions evolve and providers navigate the challenges of value-based care.

The Post-Acute Care Industry Trend Report looked at national and state-level trends in home health, hospice and skilled nursing using the latest Medicare claims and enrollment data.

One of the most significant shifts is the continued rise of MA enrollment.

The report shared that as of February 2025, more than half of Medicare beneficiaries (55.4%) are enrolled in MA plans, with 30 states reporting MA enrollment over 50%. This shift is changing how patients access care—more so in home health.

Between 2023 and 2024, enrollment in PPO (Preferred Provider Organization) plans—which generally use home health services less than HMO plans—jumped by 19.8%. However, HMO enrollment grew just 4.3%. This trend could lead to fewer home health referrals, creating pressure on providers already adapting to new performance metrics and tighter margins, according to Tella Health.

Despite these challenges, some areas of post-acute care are showing signs of recovery.

In the fourth quarter of 2024, it was found that 22.6% of inpatient discharges included a home health referral, up from 22.1% the previous year. This marks the first year-over-year increase since 2020.

Hospice admissions also saw their strongest growth since the COVID-19 pandemic. In fact, total admissions increased by 3.7%, rising from 1.55 million in 2023 to 1.61 million in 2024. In addition, more than half of all Medicare mortalities now occur in hospice, signaling a potential shift toward more supportive end-of-life care.

The report also highlighted the impact of patient behavior on outcomes.

In Q3 of 2024, patients who followed home health discharge instructions had a 30-day hospital readmission rate of 12.7%, compared to 15.1% for those who did not—which is a 2.4-point difference.

These findings share how important patient education and follow-through are for preventing avoidable hospital visits.

When looking at access to care, the report highlights that where a patient lives still plays a major role.

For example, the number of Medicare patients using home health services can differ by more than 25% depending on the state. Skilled nursing use varies by about 23%. These gaps suggest that where a patient lives may affect the kind of care they get after leaving the hospital—not just their medical needs.

To adapt to this shifting landscape, post-acute providers are ramping up efforts to succeed under value-based care models.

Trella’s report included insights from post-acute care leaders who are investing in better infrastructure, technology and clinical training to meet new expectations around cost and quality.

Russ Krengel, CEO of Kindful Health, told Trella that their organization starts with process measures but aims for excellence in both processes and outcomes, “anchored by direct customer feedback. This approach shapes everything we do—from staff training to technology investments—and helps us thrive in a rapidly evolving VBC environment.”

John Wagner, CEO of Advantage Care, added, “Value-based care means more than just meeting—it’s about integrating care coordination and social determinants of health into every patient interaction. We invest heavily in education and partnerships to create holistic care experiences that truly lower costs and improve outcomes.”

Staffing challenges continue to weigh heavily on post-acute organizations as well.

“We’re hearing from our members that staffing remains their number one concern,” said Sheila Clark, president and CEO of the California Hospice and Palliative Care Association. “Recruiting is tough, but retention is even harder—and it’s forcing hospices to think more creatively about flexibility, career ladders, and reducing burnout. Leadership must model compassion not only for patients but for their teams.”

Clark also addressed how MA is influencing hospice care.

“Medicare Advantage is reshaping the hospice landscape,” she said. “Providers that succeed in this new environment are the ones that engage with payers as strategic partners, not just contract administrators.”

“Hospices must be proactive in demonstrating their value—showing how they reduce total cost of care, prevent unnecessary hospitalizations, and deliver high-quality end-of-life care. That’s what gets a seat at the table with payers.”

Other leaders urged the need to make operations more efficient without losing focus on quality.

“Every year we prepare for tighter margins and potential payment reductions,” Sabine Brent, director of referral services at Sentara Home Health and Hospice, said. “Our focus is on streamlining operations and shifting administrative tasks away from clinicians so we can continue to meet quality benchmarks without sacrificing care.”

As the data makes clear, post-acute care is in a period of rapid change.

With new pressures from MA growth, staffing shortages and shifting payment models, providers are being forced to rethink how care is delivered and how success is measured.

This trend report provides a roadmap for navigating that change, and as Tapp said, “Better data leads to better healthcare.”