How Hospitals and Post-Acute Providers Can Prepare Now for CMS’ Mandatory TEAM Model

Beginning January 1, 2026, the Centers for Medicare & Medicaid Services (CMS) will launch its latest mandatory payment reform initiative: the Transforming Episode Accountability Model (TEAM). The program targets five high-volume, high-cost surgical episodes—including spinal fusion, major joint replacements, and coronary bypass procedures. TEAM aims to reduce variation, improve outcomes, and drive cost-efficiency across the entire episode of care, from procedure through 30 days post-discharge.

Unlike voluntary models of the past, TEAM will be required for hospitals in 188 designated Core-Based Statistical Areas (CBSAs), signaling CMS’s deeper push into value-based specialty care. But while the model officially begins in 2026, the window to prepare is rapidly narrowing—and both hospitals and post-acute providers must act with urgency.

With this change, providers will need to go beyond adjusting contracts to overhauling infrastructure, relationships, and workflows that extend care beyond the hospital walls. As post-acute services account for a significant portion of care episode costs, selecting the right partners and aligning on protocols will be the difference between success and setback.

So, what should hospitals and post-acute providers (PACs) be doing now?

Understanding the Shift: From Discharge Coordination to Episode Management

Under TEAM, hospitals aren’t just accountable for what happens inside their own walls—they’re on the hook for quality and cost throughout the entire episode of care. This entails expanding oversight to multiple touchpoints, including skilled nursing facilities (SNFs), inpatient rehabilitation facilities, and home health providers.

Expanding this scope means discharge planning is no longer regarded as a siloed, transactional activity, but rather as a strategic lever. Hospitals will need to work collaboratively with PAC partners that can effectively manage complex patients, reduce readmissions, and provide consistent, data-informed care.

Some hospitals still operate with fragmented PAC networks, limited visibility into downstream performance, and outdated referral processes. This all contributes to less safe hand-offs: roughly 1 in 5 patients (20%) may experience suboptimal or unsafe care around the time of discharge from a hospital, primarily due to failures in care transitions. To succeed under TEAM, that must change.

Five Best Practices to Prepare for TEAM

To get ready for TEAM’s financial and clinical demands, hospitals and PACs should begin strengthening these five foundational practices now.

1. Evaluate Post-Acute Performance—Objectively

Often, hospital systems rely on habit or convenience when referring to post-acute providers. Now is the time to assess partners using hard data by analyzing readmission rates, average length of stay (LOS), Star Ratings, and patient satisfaction scores. Consider not only whether a facility accepts patients, but also whether they meet quality and cost goals.

2. Invest in Bidirectional Communication and Feedback Tools

Hospitals need visibility into what happens after discharge. Whether it’s through shared platforms, structured feedback loops, or real-time alerts, communication must flow both ways. Teams should be aware when a patient’s condition worsens or if a readmission is likely, before it occurs. This requires consistent communication and feedback from internal care management teams as well as the PACs they collaborate with through care transitions post-discharge.

3. Standardize Pathways Across Settings

Clinical pathways shouldn’t end at discharge. Collaborate with PACs to extend care plans into the post-acute setting. For example, a heart failure pathway should include SNF and home-health interventions that align with hospital protocols, ensuring patients receive consistent, effective care throughout their recovery for optimal outcomes. Pathways are evidence-based and a coordinated clinical guide to facilitate a patient’s journey through the healthcare system, from acute hospital care to rehabilitation, outpatient services, and home care. It’s about ensuring seamless transitions, reduced variability, and optimized outcomes across the entire continuum of care.

4. Engage PACs Early and Continuously

Strong PAC networks aren’t passive. They’re dynamic systems where partners meet regularly, review performance, and identify opportunities for improvement. Whether through monthly meetings, readmission assessments, or root-cause reviews, carve out time for discussing accountability and continuous learning. As hospitals turn inward to reevaluate their infrastructure and protocols, it’s critical to bring their downstream partners into the planning process early. PACs, especially SNFs, are ready and willing to participate in TEAM alignment—we just need to give them a seat at the table before implementing new systems.

5. Align Incentives with Outcomes

Some health systems are developing tiered, preferred provider networks that recognize high-performing PACs. Others are exploring shared savings arrangements. Whatever the structure, incentives should reward quality, efficiency, and proactive communication—not just bed availability.

Three Key Hospital Priorities for the Next Six Months

With the clock ticking toward implementation, these three priorities should be at the top of every hospital and PAC leader’s six-month roadmap.

• Close technology gaps: Hospitals must quickly assess whether they have the digital infrastructure to support TEAM success. This includes considering platforms that support patient tracking, outcome reporting, and real-time communication.
  
• Upskill PAC staff and build capacity: PAC providers face staffing challenges, from high turnover to training gaps. Hospitals can’t solve this alone, but they can help. Consider partnering on staff training, offering education on hospital protocols, or co-developing onboarding materials for preferred partners.
  
• Identify—and activate—preferred partners:Begin developing formal preferred PAC networks now. Set expectations early, align on protocols, and conduct readiness assessments to ensure a smooth process. The goal is not to create exclusive relationships, but to build shared accountability and clinical alignment. 

Importantly, you don’t need to wait for SNFs to approach you. Initiate conversations now and assess not just their clinical capabilities, but also their appetite and readiness for collaborative work under TEAM. Many SNFs are eager to engage and will benefit from joint planning and resource sharing.

What Makes a High-Performing PAC Partner?

As hospitals reevaluate their networks, these criteria are emerging as essential for effective post-acute collaboration:

• Star Ratings of 3 or higher
• Low rates of hospital readmission and return-to-ED
• Efficient LOS management
• Demonstrated success with at-home care transitions
• Technical capacity and willingness for data sharing and reporting
• Cultural and clinical alignment with hospital standards
• Participation in shared training programs and cross-continuum planning sessions

Preferred partners should not only deliver high-quality care but also collaborate in designing new workflows and reporting mechanisms. Hospitals can’t bear this alone. They need to seek out and identify PACs that are ready—and willing—to step up.

What a Best-in-Class PAC Collaborative Looks Like

At high-functioning health systems, preferred PAC partners aren’t mere discharge destinations. They’re strategic collaborators who can mean all the difference for patients’ healing journeys. These organizations:

• Participate in joint training sessions and case reviews
• Attend quarterly alignment meetings with hospital leadership
• Share real-time patient updates and outcome data
• Customize care plans based on hospital protocols
• Escalate issues early and proactively resolve concerns
• Support at-home transitions and reduce institutional dependency
• Managing LOS strategically together 

Some systems have even co-developed condition-specific programs with their PACs, using color-coded zone systems for chronic disease management or creating mobile alerts to detect patient deterioration. These efforts can reduce readmissions, improve the patient experience, and, perhaps most importantly, cultivate trust.

The Risk of Standing Still

Hospitals that wait until late 2025 to prepare for TEAM will be playing catch-up. The possible consequence? Poor performance, which could result in missed financial targets, damaged reputations, and most critically, subpar patient outcomes.

Readmissions that were once attributed to bad luck may be seen as preventable failures. Delays in discharge planning will become costly missteps. And fragmented PAC networks could threaten entire care episodes.

Providers shouldn’t view TEAM readiness as simply another regulatory task, but rather as a shift in how care is delivered, measured, and reimbursed. And facilities that embrace this moment won’t just survive the TEAM mandate. They’ll lead through it.

This also isn’t just a hospital challenge. If SNFs are left behind, even the most advanced hospital protocols will falter. Mutual readiness must be the new standard—and it starts with hospitals inviting their PAC partners into the process today.