Home Health Agencies Prepare for Landmark CMS Bundled Payment Model, TEAM
The Centers for Medicare & Medicaid Services’ (CMS) mandatory bundled Transforming Episode Accountability Model (TEAM) is rapidly approaching, prompting proactive home health providers to gear up for a shift in how care is delivered and reimbursed beginning January 1, 2026. The new model presents both significant opportunities and potential financial risks for agencies, hinging on their ability to reduce readmissions and forge strong hospital partnerships.
The TEAM model offers a compelling incentive for home health agencies: increased access to Medicare fee-for-service beneficiaries. This demographic is becoming increasingly valuable as the growth of Medicare Advantage plans, often characterized by tighter margins, continues. However, unprepared providers face potential financial penalties. “The risk is that you aren’t well-positioned in your market,” a senior official stated. “Either you’re not being proactive around forging the team hospital partnerships, or you’re not being creative to do things differently than you’re already doing.”
Understanding the TEAM Model
TEAM fundamentally alters financial accountability for hospitals, making them responsible for both the quality and cost of care for patients undergoing one of five specific procedures: lower extremity joint replacement (LEJR), surgical femur and fracture treatment (SHFFT), spinal fusion, coronary artery bypass graft (CABG), and major bowel procedure. The model bundles payments to cover these procedures and the subsequent 30-day period, whether the patient is recovering at home or in a hospital setting.
Home health providers can engage with TEAM through multiple pathways, according to industry experts. The model incentivizes directing patients to the most cost-effective care setting, often favoring home health over skilled nursing facilities (SNFs), thereby boosting home health utilization. Even when patients initially enter a SNF, home health services may be utilized post-discharge to facilitate smoother transitions and prevent readmissions within the 30-day TEAM timeframe. Furthermore, the model’s integration of inpatient and outpatient services for two of the five conditions may lead hospitals to shift more surgeries to outpatient departments, increasing the demand for home health support during recovery.
The High Stakes of Readmission Rates
A key risk for home health agencies lies in accepting patients under the TEAM model and failing to deliver optimal outcomes. “That’s where home health will have the highest degree of risk,” one analyst noted. Readmissions are particularly critical, as they are “double-counted” within the model. This means a readmission not only triggers a claim for another hospitalization, impacting the financial target price, but also significantly lowers the Composite Quality Score, which directly affects financial results. Therefore, a single readmission carries a substantial financial penalty.
Readiness Levels Among Providers
Several home health organizations are already taking proactive steps to prepare for the launch of TEAM.
ArchCare, a Catholic health care system offering a range of services including home health, has initiated pilot programs mirroring the TEAM model across its facilities. These pilots emphasize shorter lengths of stay and improved communication with hospital partners to ensure continuity of care. “The patients are assured that when they walk in on the day of their procedure … they’ll get the same care management team from that day until they go home, and it will follow them over there,” explained Dr. Taimur Mirza, chief medical officer at ArchCare, during a recent webinar. “We’re really excited about TEAM. I think we’ve already put the right steps in place, and can’t wait to see how this pans out over the next couple of years.”
ArchCare, based in New York City, provides home- and community-based services, residential care, and a comprehensive suite of home health offerings including nursing, physical, occupational, and speech therapy, alongside personal care and companionship services.
A recent poll conducted during a webinar hosted by Aidin, a health care technology company, revealed that a significant majority of stakeholders – including home health administrators, care management leaders, and business development professionals – expressed confidence in their organization’s readiness for TEAM. Approximately 65% reported feeling “very confident” or “somewhat confident” in meeting the model’s requirements by the January 1, 2026, deadline.
One industry observer noted that the level of confidence reported was surprisingly high, suggesting widespread proactive preparation. However, she cautioned that agencies lacking robust metrics and established relationships with hospital systems may struggle to succeed under the TEAM model.
Preparing for Success Under TEAM
Establishing strong relationships with hospitals is paramount for home health agencies seeking to thrive within the TEAM framework. However, preparation must begin well before initiating conversations with potential partners.
Agencies should first conduct thorough data analytics to understand hospital spending and utilization patterns for each of the five conditions covered by TEAM, according to industry advisors. Simultaneously, providers must assess their own performance metrics, including referral response times, readmission rates, and length of stay, to identify areas for improvement. “If they start really looking at those now and determine where they need to start working on, where they need to improve, and where they really need to advertise to the hospitals that they might do great in that [metric] already,” one expert suggested.
Once prepared, agencies should proactively request joint planning meetings with hospitals to align expectations and ensure a collaborative approach. Understanding how an agency performs relative to its competitors is also crucial. “Other bundle payment models have been historical provider price models, which means you just had to beat yourself from the past,” a company release stated. “This is a regional target price model, which means you’ve got to be better than your region.”
These regions are substantial, encompassing three to eight states. Demonstrating a clear understanding of an agency’s competitive position enhances its credibility and increases its value to hospitals.
Furthermore, many post-acute care providers are finding themselves in the position of educating hospitals about the intricacies of the TEAM model and its potential benefits.
Finally, providers must closely monitor updates to the Inpatient Prospective Payment System (IPPS) rule, which governs the TEAM model. The next rulemaking cycle, with a proposed rule expected in late spring and a final rule in late summer, will be critical for understanding potential changes or expansions to the model. “That’s where, if they’re going to change the model, they will do so there,” a senior official said. “If they’re going to expand the model, and CMS has been very transparent that that is their intention, they would do that through rulemaking.”
