Editor’s Note: An aging population and shifting reimbursement models are spurring acute care and post-acute care (PAC) providers to work more collaboratively. Increasingly, hospitals and health systems are forming PAC preferred provider networks that support the exchange of clinical information, align care management protocols and share savings. In a new article for Hospitals and Health Networks Magazine, summarized below, Manatt Health shares how preferred provider networks can help hospitals integrate PAC providers into their care delivery models. To read the full article, click here.


As the percentage of older Americans grows and the incidence of chronic disease increases, new models of care that extend outside of hospitals’ walls and leverage medical advances across nonhospital sites of care will be required. Simultaneously, new value-based payment models incentivize acute care and PAC providers to work together to improve care coordination, quality and cost efficiency.

Responding to these trends, an increasing number of hospitals and health systems are forming PAC preferred provider networks (PPNs). These networks are partnerships between hospitals and PAC providers that focus on facilitating smooth transitions between care settings, preventing unnecessary hospital readmissions, and optimizing health outcomes for patients. While some hospitals are looking to buy or build PAC services as part of their own network of services, more organizations are instead looking to align with PAC providers by creating PPNs.

The Benefits of PPNs

Both hospitals and PAC providers benefit from PPNs. Mutual benefits for hospitals and PAC providers include:

  • A care coordination and patient management infrastructure that is collaborative and seamlessly connects providers along the care continuum
  • Joint development of quality improvement initiatives and shared clinical pathways
  • Consistent patient transfer and clinical protocols and processes
  • Data integration and data sharing, allowing for a heightened focus on analytics and more targeted interventions
  • Competitive differentiation, an enhanced brand and stronger patient loyalty
  • Preparation for success in population health and value-based payment initiatives

PPNs also provide important benefits specific to hospitals, including:

  • Immediate and consistent access to high-quality PAC services, placing patients in the optimal levels of care, regardless of payer type
  • Reductions in readmissions and emergency department visits
  • Increased hospital throughput, a reduced average length of stay and a more efficient discharge process

Forming PAC PPNs

The formation of PAC PPNs is complex and requires a clear understanding of referral patterns to PAC providers, PAC financial and quality performance, PAC providers’ capacity and ability to serve patients from certain geographies, and varying levels of acuity. Network formation also requires identifying the hospital’s need for PAC services based on patient demographics, as well as its knowledge of associated legal and compliance risks. Thoughtful planning is essential to developing a robust network with an agreed-upon set of standard policies and procedures that optimize patient care.

Getting Started

There are four initial steps that hospitals should take in evaluating the strategic benefits of forming a PPN:

1. Document organizational objectives for PAC. Establish a small team of stakeholders to document the organization’s objectives for working with a group of partners to manage the PAC population.

2. Conduct a PAC population assessment. Develop a data-driven assessment, including an analysis of all discharges to the PAC setting.

3. Perform a discharge/care-transitions assessment. Conduct a thorough and candid self-assessment of discharge planning and transition-of-care processes to understand major issues and areas for improvement.

4. Evaluate potential partners and begin initial discussions. Assess the performance and capabilities of local PAC providers and their potential inclusion in the PPN. Develop an evaluation framework and criteria for selecting high-quality partners. Once the short list is created, hold work sessions to understand and document potential partners’ objectives for joining the PPN.

Beyond these initial steps, hospitals must define the terms of PPN participation (i.e., terms related to discharge planning, patient choice, information sharing, care coordination and follow-up, and clinical support). Hospitals also must assess the legal and regulatory implications of developing PPNs; develop quality scorecards for measuring, reporting and benchmarking outcomes regarding utilization, clinical outcomes, patient experience and other performance metrics; and implement continuous process improvements.


PAC providers play a critical role in ensuring patients receive the care they need to recover after a hospital discharge, as well as helping to minimize readmissions and emergency department visits. Integrating PAC providers into care delivery models can deliver powerful benefits, including improved care, lower costs and more appropriate service utilization.