How Will the CMS TEAM Model Impact Home Health Billing?

Late last year, CMS introduced the Transforming Episode Accountability Model (TEAM). It addresses five surgical categories with the intent of improving the quality of care and reducing expenditures. This model directly impacts home health billing from multiple angles.

First announced in 2024, it builds on Bundled Payments for Care Improvement Advanced (BPCI-A) and Comprehensive Care for Joint Replacement models [1]. Revenue cycle leaders responsible for home health billing should review the implementation of the TEAM model to best understand impact on revenue cycle strategy and home health care billing.

The Centers for Medicare & Medicaid Services (CMS) introduced the TEAM model to overhaul how hospitals manage specific surgical procedures [2]. This mandatory payment framework targets five categories: 

• Coronary artery bypass grafts
• Lower extremity joint replacements
• Major bowel procedures
• Surgical hip and femur fracture treatments
• Spinal fusions 

By shifting financial burden to acute care hospitals, CMS intends to refine patient outcomes while reducing federal expenditures. TEAM requires participation for hospitals within designated geographic zones, forcing them to manage the entire cost of a thirty-day care episode. This includes services that cross the boundary of the formal episode. When medical assistance extends past the episode window, CMS uses a proration formula. For example, the agency divides the costs of non-hospital inpatient stays based on the percentage of days spent within the episode timeframe. This specific accounting logic directly impacts home health care billing since administrators have to verify which dates fall under the hospital’s bundled responsibility and which remain external.

Because of this, leaders managing home health billing will need a solid understanding of how these episode-based payments redistribute financial pressure across providers.

To facilitate smoother transitions, the TEAM model provides some regulatory flexibilities. CMS offers waivers for specific telehealth mandates, allowing clinicians to perform virtual check-ins from a patient’s residence. However, these waivers exclude the face-to-face encounter required for initial home health certification. 

These shifts in delivery methods require more sophisticated home health billing services in the USA to ensure that clinicians document and bill virtual visits correctly under the new episode parameters. 

Revenue cycle leadership should be aware that CMS has authority to dissolve the TEAM project if funding evaporates or if the model fails to meet benchmarks. If CMS decides to terminate a specific hospital’s involvement, the facility has a ten-day window to contest that choice with a written notice.

The TEAM model fundamentally changes the relationship between hospitals and post-acute providers. 

Becoming a Preferred Provider

Because hospitals face penalties for exceeding spending targets, they will likely seek out partnerships with agencies that demonstrate high efficiency. Hospitals will use regional data to identify partners that minimize readmissions and optimize recovery timelines. This dynamic turns efficient home health billing into a strategic asset for agencies. 

Agencies that can prove their value through clean claims and predictable costs can improve their chances of securing a spot in a hospital's preferred provider network. During the discharge phase, hospitals must offer patients a list of available agencies, but the underlying financial incentives will naturally steer them toward collaborators who share the risk.

Proration of Services

Revenue cycle leaders should pay close attention to the proration of home health services. CMS stipulates that for services paid under the prospective payment system, the agency calculates the portion of the bill belonging to the TEAM episode by looking at the span between the first and last billable service dates. If a sixty-day home health episode overlaps with a thirty-day TEAM episode, only the overlapping days count toward the hospital's target. This nuance makes home health billing significantly more complex and increases the risk of disputes, delays, and audit scrutiny. Revenue cycle leaders must ensure their software, coders and billers are prepared to accurately track these dates to prevent payment disputes or double-billing errors that could sour a partnership with a primary hospital.

New Revenue Streams Through Telehealth

The integration of telehealth waivers introduces new revenue streams as well as operational hurdles. 

While the model permits more flexible virtual care, the billing department must differentiate between standard Medicare rules and TEAM-specific waivers. Using experienced home health billing providers as outsourcing partners can help agencies navigate these discrepancies and help ensure that the distant site payments and facility fee exclusions align with CMS expectations. 

This requires clear documentation as a primary defense against audits. As hospitals monitor every dollar spent during the thirty-day window, agencies must justify their utilization levels through precise home health billing practices.

The TEAM model forces a higher level of transparency on revenue cycle leadership. Agencies that rely on outdated, manual processes for home health billing and who don’t explore outsourcing as an option will find themselves at a disadvantage. 

3Gen Consulting specializes in helping home health agencies operating in the United States navigate exactly these challenges across Medicare payment models. From home health billing services to OASIS coding support, our team ensures you stay compliant, maximize reimbursement, and adapt quickly to CMS rule changes. 

We can support you in future-proofing your home health revenue cycle against this type of change. Contact us today to discuss how we can help you respond to TEAM updates, strengthen your billing processes, and protect your bottom line.