Understanding Hospital QMs, Episodic Care & the Impact on Post-Acute Providers
In post-acute care, providers are accustomed to monitoring Minimum Data Set (MDS) accuracy and focusing on clinical programs in quality measure target areas in order to drive Five Star Rating performance. The Five- Star Rating System can significantly impact everything from admissions and hospital referrals to insurance contracts and financing costs. Hospitals also have quality metrics publicly displayed on Care Compare, but due to the urgent nature of acute care, consumers may not have time to research quality outcomes. As referral partners, however, it is important to understand hospital quality metrics. This week’s blog provides an overview of evolving hospital quality metrics…
Hospital quality metrics encompass several areas including:
- Inpatient outcomes (e.g., timely and effective care, complications and mortality rates).
- Unplanned hospital visits.
- Maternal health.
- Health equity.
- Patient- reported outcomes.
- Payment and value of care.
Each of the above listed categories contains numerous subcategories, totaling nearly 200 quality metrics.
Payment and Value of Care Metrics
This area is particularly relevant to post-acute care providers, who have collaborated with hospitals and physicians for nearly 15 years on value-based programs, bundled payment models, rehospitalization penalties, and more.
In August of 2024, CMS announced the launch of a new mandatory episodic payment program for hospitals, the Transforming Episode Accountability Model (TEAM), to be implemented in January of 2026. This program focuses on 5 major procedure categories:
- Lower extremity joint replacements.
- Coronary artery bypass graft surgery.
- Major bowel procedures.
- Spinal fusion.
- Surgical & femur fracture treatments.
The TEAM program applies to Medicare Fee-for-Service (FFS) beneficiaries and is designed to run for 4-years. An episode of care will include all costs for 30 days post-procedure, encompassing both part A and part B expenses.
How TEAM Works
The program is mandatory for selected hospitals, but CMS did allow for hospitals participating in some bundled payment programs (BPCI- advanced, CJR) to opt in as well. The goal of the TEAM program is to improve quality of care while reducing cost, to address fragment care that often leads to complications, and to emphasize health equity and access to care in underserved areas.
CMS will establish a target price for each procedure/episode.
The hospital’s actual spending is subtracted from the target to calculate the Net Payment Reconciliation Amount (NPRA).) Hospitals will earn a profit if their spending is within the target. If they exceed the target, they will incur financial losses.
CMS will apply risk adjustments on factors such as morbid obesity, dialysis status, cardio-respiratory failure and shock, protein calorie malnutrition and many more. Additionally, quality metrics—such as all-cause readmissions, patient safety indicators, and hospital harm rates—will contribute to a quality adjustment.
What This Means for Post-Acute Providers
Hospitals will dedicate significant resources to preparing for the TEAM program, aiming to optimize both clinical outcomes and financial performance. Successful outcomes will, in part, depend on trusted partnerships with post-acute providers.
How Can Post-Acute Providers Prepare?
- Identify and Collaborate: Connect with selected and voluntary hospitals in your area to establish partnerships.
- Coordinate Care: Begin working with hospitals before 2026 to align care coordination for targeted episodes, addressing risks with patient-specific interventions.
- Assess Length of Stay and Discharge Planning: Evaluate your current processes for potential gaps and opportunities to improve.
- Educate Your Team: Provide training on clinical pathways for these conditions to ensure your staff can deliver effective care and maintain strong communication with physicians and hospital teams.
Proactive Can Help! Contact us for more information on consulting services related to case management programs, clinical pathways, and treat in place models.
