Optimizing Routine Post-Op Care Under CMS TEAM: Outpatient PT vs. Home Health

As the Centers for Medicare & Medicaid Services (CMS) rolls out the Transforming Episode Accountability Model (TEAM) in 2026, hospitals and health systems will face greater accountability for episode-wide spending and patient outcomes. This is particularly true for procedures like primary hip and knee replacements.

For uncomplicated, low-risk total joint replacement patients, one of the biggest early levers to control costs and maintain quality is where you send patients for routine rehabilitation:

Outpatient physical therapy (OP PT) or home health agency (HHA) care.

Aligning Care With ERAS and AAHKS Guidelines

Guidance from the Enhanced Recovery After Surgery (ERAS) Society and the American Association of Hip and Knee Surgeons (AAHKS) emphasizes the value of early mobility, structured therapeutic exercises, and task-specific activity practice.

For uncomplicated patients, these goals are well-served in outpatient PT programs, where care teams can closely monitor progress and adjust treatment plans as needed.

That said, home health remains the better choice for patients with added complexity such as those with significant comorbidities, unsafe home environments, or functional limitations that make travel difficult.

The key is to define clear patient criteria so your team can confidently match the right level of care to the right population.

Understanding PT Services and Codes

Outpatient PT for lower joint replacements typically includes a focused set of services designed to restore mobility, strength, and balance. These may involve therapeutic exercises, neuromuscular re-education, gait training, manual therapy, and task-specific activities.

Medicare uses CPT codes to reimburse these services, and standardizing which codes are used can help reduce variation and keep spending aligned with TEAM performance benchmarks.

Typical PT services & CPTs include:

• Therapeutic exercise 97110
• Neuromuscular re-education 97112
• Gait training 97116
• Manual therapy 97140
• Therapeutic activities 97530
• PT evaluations 97161–97163 (complexity-based)

How the Costs Compare Between Outpatient PT and Home Health

For hospitals participating in TEAM, understanding the financial side of post-op care is critical. In outpatient PT settings, Medicare Part B pays per 15-minute unit, averaging about $30 to $35 per unit before locality adjustments. A typical uncomplicated visit involving three to four units falls between $100 and $140.

In contrast, home health services are reimbursed under PDGM at a national standardized rate of about $2,057 for a 30-day period, before wage and case-mix adjustments. If patients receive fewer visits than PDGM thresholds, a Low-Utilization Payment Adjustment (LUPA) applies, meaning reimbursement shifts to a per-visit basis instead of the full lump sum.

The financial difference here is significant, especially when managing bundles under TEAM. Steering the right patients into outpatient care can lower episode spending without compromising recovery outcomes.

Why Outpatient PT Is Often the Better Choice

For healthy patients recovering from total hip or knee replacements, outpatient rehab is typically both more cost-effective and equally effective compared to home health care. Under the Patient-Driven Groupings Model (PDGM), home health agencies receive a 30-day lump sum payment once visit thresholds are met. However, for patients who only need a light course of therapy, the total cost of care often remains far lower when they’re referred to outpatient PT instead.

In addition, outpatient settings also make it easier to standardize therapy content, track functional progress, and ensure patients stay on a structured recovery pathway.

Research and clinical guidelines support this approach, provided that transportation or safety issues aren’t barriers for the patient.

How to Implement an Effective Post-Op Strategy Under CMS TEAM

Successfully managing post-op care under CMS TEAM requires a structured approach that combines clear patient pathways, financial awareness, and clinical consistency. Hospitals and care teams can follow these five steps to ensure both cost efficiency and high-quality outcomes:

1. Define Your Healthy Cohort and HHA Exception Criteria

Start by creating clear criteria to identify low-risk patients who are strong candidates for outpatient PT. Establish exception triggers for those who may require home health services, such as significant comorbidities, safety concerns, or mobility limitations.

2. Make Outpatient PT the Default

Hardwire the process so that outpatient PT is the standard referral pathway for uncomplicated cases. Book the first therapy appointment before discharge, ideally within three to five days, to keep recovery on track.

3. Standardize Outpatient PT Protocols

Use a consistent set of PT HCPC/CPT codes aligned to functional recovery goals. Encourage uniform documentation and typical unit counts to minimize variability and improve financial predictability under TEAM.

4. Manage Home Health Exposure

Educate discharge planners on LUPA thresholds and the financial impact of crossing visit thresholds under PDGM. Partner with your HHA providers to use LUPA forecasting tools and make informed decisions about patient placement.

5. Track TEAM-Relevant Metrics

Monitor key measures like episode spending (especially post-acute spend), unplanned ED visits, readmissions, and patient-reported outcome measures (PROMs). Give surgeons and care teams access to dashboards that tie adherence to standardized pathways with both clinical and financial performance.

Key Takeaways

Under CMS TEAM, optimizing routine post-op care pathways can significantly affect both episode costs and patient outcomes. Outpatient PT should be the first-line option for most healthy hip and knee replacement patients, while home health should be reserved for those with safety, mobility, or complexity concerns.

By standardizing care protocols, improving referral processes, and closely tracking TEAM-relevant metrics, hospitals can balance cost efficiency with high-quality recovery.

To learn more about how the Avant-garde software can help you succeed under TEAM, contact us today to schedule a demo!

Sources

• CMS TEAM overview: Centers for Medicare & Medicaid Services
• ERAS/AAHKS outpatient orientation for THA/TKA: AAHKS | Educate. Advocate. Investigate. ERAS® Society
• Common PT HCPCs: Centers for Medicare & Medicaid Services
• CMS PFS Look-Up Tool: Centers for Medicare & Medicaid Services
• CY2025 HHA national 30-day payment; LUPA mechanics & thresholds: Centers for Medicare & Medicaid Services