SNF Bundling Models: What Every Skilled Nursing Facility Needs to Know
Category: Reimbursement & Regulatory | Audience: SNF Operators, Administrators, DONs, Billing Teams
On April 10, 2026, CMS released the FY2027 Hospital Inpatient PPS Proposed Rule — and buried inside it were two updates that every skilled nursing facility in the country needs to understand: changes to the TEAM Bundling Model and a proposed nationwide expansion called CJR-X.
If your facility receives referrals from acute care hospitals — and nearly every SNF does — these models will affect your census, your referral relationships, and your Medicare revenue. Here’s everything you need to know.
What Is SNF Bundling?
Bundling is a Medicare payment model designed to reduce costs by holding hospitals financially accountable for the total cost of a patient’s care episode — from admission through post-acute recovery.
CMS sets a “target price” for each bundled episode. That episode includes the hospital stay and all Medicare Part A and Part B costs through 30 days post-hospital discharge — which includes your SNF stay.
- If the total episode cost comes in under the target price, CMS shares the savings with the hospital.
- If costs come in over the target price, the hospital may owe CMS the difference — or at minimum, forfeits any bonus payment.
- Hospitals must also meet quality performance thresholds to receive any savings reward.
The hospital controls the money. But the pressure lands squarely on post-acute providers.
The TEAM Model: What SNFs Need to Know Now
The Transforming Episode Accountability Model (TEAM) is a mandatory CMS bundling program that launched January 1, 2026 and runs through December 31, 2030.
Which Diagnoses Are Included?
TEAM covers five diagnoses:
- Coronary Artery Bypass Graft (CABG)
- Major Bowel Procedure
- Lower Extremity Joint Replacement (LEJR)
- Surgical Hip and Femur Fracture Treatment (SHFFT)
- Spinal Fusion
Any patient who discharges from a TEAM-participating hospital with one of these diagnoses is automatically included in the model — regardless of where your SNF is located. What matters is the location of the discharging hospital, not your facility.
Which Hospitals Are Participating?
721 hospitals across 44 states, Washington D.C., and Puerto Rico are participating in TEAM — 189 mandatory locations plus 10 voluntary participants.
You can check whether your referral hospitals are on the list at cms.gov/team-model-participant-list.
What Does This Mean for Your SNF?
Once a hospital is financially accountable for the full episode cost, their behavior toward post-acute partners changes. Here’s what to expect:
Preferred provider pressure. Hospitals will actively seek SNF partners with strong quality measure performance. If your Five-Star rating, readmission rates, and discharge function scores aren’t where they need to be, you may find referral streams shifting.
Length-of-stay expectations. Hospitals will push for shorter SNF stays for patients with these five diagnoses. Your clinical team needs to be prepared to demonstrate the value of each additional day.
Home health diversion. Hospitals may attempt to route bundled patients directly to home health rather than SNF-level care. Know your differentiators and be ready to make the case for skilled nursing when it’s clinically appropriate.
The 3-Day Waiver Opportunity
Here’s an opportunity many SNFs are leaving on the table.
When a patient discharges from a TEAM-participating hospital with one of the five bundled diagnoses, your SNF may be able to skill them under Medicare A — even with a very short or no qualifying hospital stay.
Key details:
- These patients can be billed under Medicare A with only a 1 or 2-day hospital stay, or even no hospital stay at all.
- Your SNF must have a 3-star rating or higher for at least 7 out of the past 12 months to be eligible for the waiver.
- Billers must enter “A9” in Treatment Authorization Field (63) of the UB04 to bypass the standard 3-day requirement.
If your facility qualifies and your referral hospitals are TEAM participants, this represents a meaningful census and revenue opportunity — but only if your billing team knows to act on it.
Note for Enhance Therapies partner facilities: A separate payer can be added for these residents in the system upon request. Contact your Enhance Therapies clinical or billing liaison for support.
CJR-X: The First Nationwide Mandatory Bundling Model
The original Comprehensive Joint Replacement (CJR) model ran from April 2016 through December 2024, covering hip and knee replacements in 34 locations across 20 states. CMS deemed it a success — costs went down without a reduction in quality.
Now CMS is proposing to go much bigger.
CJR-X would expand the model to virtually every eligible acute care hospital in the country, covering Lower Extremity Joint Replacement (hip and knee replacements). Hospitals already participating in TEAM would be excluded, as would acute care hospitals in Maryland due to their unique rate-setting structure — but almost every other hospital would become a mandatory participant.
If finalized, CJR-X would be the first-ever nationwide mandatory bundling model — meaning the referral dynamics described above for TEAM would apply to hip and knee patients at nearly every hospital that sends you referrals.
How to Prepare Your SNF
The facilities that will thrive under bundling models are those that can demonstrate value to hospital partners through measurable outcomes. Here’s where to focus:
1. Know your quality scores. Pull your Five-Star rating, readmission rates, and discharge function scores today. These are the metrics hospitals will use to evaluate preferred SNF partners.
2. Check your referral hospitals. Review the TEAM participant list and identify which of your referral sources are already in the model. Those relationships are changing — get ahead of it.
3. Brief your billing team. The 3-day waiver is a real opportunity for qualifying facilities. Make sure your billers know the A9 code and the UB04 field requirement before your next eligible admission.
4. Prepare for LOS conversations. Develop clinical documentation protocols that clearly support the medical necessity of each day of skilled care for the five TEAM diagnoses.
5. Track CJR-X. The proposed rule is still in comment period. Final rule decisions will shape whether and when CJR-X takes effect. Stay informed.
