The Center for Medicare and Medicaid Innovation’s (CMMI) mandatory Transforming Episode Accountability Model (TEAM) begins on January 1, 2026 and runs through December 31, 2030. Like the Comprehensive Care for Joint Replacement (CJR) and Bundled Payments for Care Improvement (BPCI-A) models before it, TEAM has significant implications for skilled nursing facilities (SNFs) and inpatient rehabilitation facilities (IRFs).
What Is TEAM?
TEAM creates a retrospective 30-day bundled payment for five high-volume procedures:
- Lower extremity joint replacement (LEJR)
- Surgical hip femur fracture treatment (SHFFT)
- Coronary artery bypass graft (CABG)
- Spinal fusion
- Major bowel procedure
These procedures account for approximately 15% of Medicare inpatient covered charges.1 Two of the bundles—LEJR and spinal fusion—include both inpatient and outpatient procedures, creating site-neutral prices for lower acuity cases. For TEAM episodes, CMS is making available a waiver of the three-inpatient-day stay requirement. However, TEAM participants may only use the three-day waiver to discharge a TEAM beneficiary to a SNF that meets quality requirements.
Approximately 740 IPPS hospitals are mandated to participate. In selecting core-based statistical areas—and the hospitals geographically located within these areas—CMMI intentionally oversampled markets with a higher density of safety net hospitals and lower participation rates in prior bundled payment models. In addition, those hospitals currently participating in the CJR and BPCI-A models may opt in to TEAM.
The model’s target price includes almost all covered Part A and B services occurring from the date of the triggering admission/procedure through 30 days post-discharge/procedure. The target price is based on three prior years of regional spending data, incorporates patient-specific risk adjustment, and includes hospital-specific factors, trend and normalization factors, and an episode-specific discount factor to help ensure CMMI savings. While the amount of actual risk a hospital bears for TEAM episodes of care will depend on the type of hospital and the performance year in question, it could be as much as 20% of the aggregate target prices of all TEAM episodes.
Post-Acute Lessons From BPCI-A
Participating hospitals are performing current state assessments of their TEAM financial performance to inform care redesign and improve clinical pathways for selected episodes. Understanding performance through this unique episodic lens is the first step toward earning TEAM performance-based bonuses and avoiding TEAM financial penalties. This assessment requires access to the full Medicare claims data for multiple years to establish a baseline period.
Like BPCI-A and CJR, the greatest opportunity for hospitals to succeed financially in TEAM is to reduce post-acute care (PAC) spending. The only way to reduce Medicare spending on TEAM beneficiaries is to change care pathways, thereby reducing utilization of PACs when clinically appropriate; hospitals may not negotiate an alternative fee schedule with providers for TEAM episodes of care. Therefore, TEAM participants will look for opportunities to adjust discharge patterns, rewriting the care pathway based on each beneficiary’s most clinically appropriate care setting.
CMMI’s evaluation report of BPCI-A finds that hospitals reduced discharges to long-term care hospitals (LTCHs), IRFs, and SNFs by 8.4% for surgical episodes. Shifts in first discharge location for participating hospitals, coupled with efforts to decrease lengths of stay (LOS) when patients were discharged to SNFs, translated into 11.7% fewer SNF days. As a result of changes in care pathways, payments to IRFs decreased by 37.5% from the baseline period to the most recent performance period for BPCI-A participants compared to hospitals in the control group. SNF payments for BPCI-A participants’ surgical episodes decreased by 11.4% in the same period compared to hospitals in the control group.
Model details and specifications have changed from BPCI-A, but one strategy remains consistent: establishing a beneficiary’s post-surgical plan with an eye toward clinical efficacy, quality, coordination, and efficiency starts with—and is significantly influenced by—the first post-acute care setting and provider.
Beyond shifting the first setting of post-discharge care, reducing unnecessary readmissions and emergency department (ED) utilization is also an important opportunity to improve patient outcomes and reduce costs. Hospital participants in BPCI-A surgical episodes reduced readmission rates by 3.2% compared to nonparticipating hospitals for similar episodes.
TEAM Implications for SNFs & IRFs
To help discharge patients to the most appropriate initial post-acute care site and reduce readmissions, TEAM participants will form high-value post-acute care networks. These hospitals will use the current state assessment to identify high-performing IRFs and SNFs that will collaborate to reduce care fragmentation. TEAM regulations stipulate that beneficiaries maintain the freedom to choose their care, so participating hospitals must both respect beneficiaries’ choices and effectively advocate for certain high-value, high-quality, highly aligned providers.
While TEAM presents a risk to IRF and SNF volume among its highest reimbursing Medicare fee-for-service (FFS) patients, participating in a TEAM hospital’s high-value PAC network may backfill volume shifted to lower acuity settings. Similar to what Forvis Mazars has observed in the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) model, IRFs and SNFs may benefit by negotiating a “collaborator agreement” with a TEAM participant to gainshare a portion of the cost reduction they help participating hospitals achieve.
Next Steps for SNFs & IRFs: A Current State Assessment
SNFs and IRFs in or near core-based statistical areas (CBSAs) that are mandatory for TEAM (or those near CJR or BPCI-A hospitals that volunteer for the model) should perform a current state assessment for the TEAM baseline period by using available performance data, i.e., Medicare claims data. The results of the assessment will help these providers understand the origin of admission, the average post-acute Medicare spend, and the historical performance for the TEAM episode of care. For each participating hospital in the CBSA and TEAM episode, the PAC provider assessment should provide information including:
- Number of cases in each episode for which the provider cared to understand the potential exposure
- Average and median cost of a stay for the provider compared to other competitors (including other types of post-acute care providers) in the marketplace
- Average and median SNF LOS for the SNF and competitors in the marketplace
- Readmission and ED visit rates for the provider and competitors in the marketplace
With this information, SNFs and IRFs can analyze their performance relative to other facilities. This will help them identify areas where they perform better than in-market peers, e.g., lower LOS for SNFs, lower readmissions/ED visit rates, making them a valuable addition to a TEAM hospital’s post-acute network. It will also help them identify and develop plans to address improvement opportunities. For a SNF or IRF seeking to capture more referrals from a shrinking pool by joining a high-value network, this knowledge is necessary to create a compelling value proposition for a TEAM hospital.
How Forvis Mazars Can Help
Forvis Mazars has deep experience assisting hospitals and post-acute providers with current state assessments and performance improvement plans for episode payment models. If your SNF or IRF is in a market selected for TEAM, please reach out to our professionals for assistance preparing for the start of the model.
- 1 “Analysis of 2022 CMS data for MS-DRG volume by hospital,” data.cms.gov.