CMS Launches Mandatory TEAM Bundled Model in 2026: Implications for Home Health Providers

The Centers for Medicare and Medicaid Services (CMS) is set to launch the mandatory bundled Transforming Episode Accountability Model (TEAM) starting January 1, 2026. This model bundles payments for certain procedures and the subsequent 30-day period post-discharge, holding hospitals accountable for both quality and cost of care related to five specific conditions: lower extremity joint replacement, surgical femur and fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedure. Home health providers have significant opportunities under TEAM, especially as Medicare fee-for-service populations become more valuable compared to the tighter margins in Medicare Advantage. The model promotes sending patients to the lowest-cost settings, often increasing home health utilization over skilled nursing facilities. Post-SNF care or outpatient surgeries shifted to hospital departments are likely to boost demand for home health services. However, the model also introduces considerable risk for home health agencies. Performance metrics like readmission rates are double-counted, affecting both the financial target price and the composite quality score, which together directly impact financial outcomes under the model. Agencies not well-positioned in their local markets or lacking strategic relationships with hospitals risk poor results. To prepare, some providers have piloted initiatives mirroring TEAM to improve care continuity, reduce length of stay, and foster better communication with hospital partners. For instance, ArchCare, a healthcare system in New York City, has implemented programs ensuring consistent care management teams follow patients from procedure to home, aligning with TEAM's goals. Recent surveys indicate a majority of home health agency leaders feel confident or somewhat confident in meeting TEAM's requirements at launch, reflecting widespread advance preparation efforts. Nonetheless, success depends heavily on strong hospital collaborations and rigorous internal analytics. Providers must analyze hospital spending and utilization for the targeted conditions and assess their own performance metrics such as referral response times, readmission rates, and length of stay. Understanding regional benchmarks is critical as TEAM is based on a regional target price model spanning multiple states, demanding agencies to outperform their regional peers. Engaging hospitals proactively through joint planning meetings helps ensure expectations are aligned, while educating hospital partners on TEAM's structure and benefits remains an ongoing task for many home health agencies. CMS's Inpatient Prospective Payment System (IPPS) rule governs TEAM. Providers should monitor upcoming rulemaking cycles, including proposed rules in spring and final rules in late summer, as potential expansions or modifications to TEAM will be introduced through this process. Overall, TEAM represents a significant shift towards value-based care in post-acute settings, incentivizing efficient, coordinated care and positioning home health agencies at the center of postoperative recovery management under bundled payment arrangements.