Referral networks: The key to TEAM success

Value-based payment models like TEAM make hospital-SNF partnerships more important than ever. Hospitals will be held accountable for patients’ post-acute outcomes and costs, so they are incentivized to steer discharges to high-quality SNFs that can help them succeed.

In past bundled payment programs, a majority of hospitals formed preferred SNF networks, essentially trading referral volume for assurances of better SNF quality and lower costs​.

We can expect the same under TEAM: participating hospitals are likely to create “high-value post-acute care networks” of top-performing SNFs and other providers​. SNFs included in these networks benefit from a steady stream of referrals, while hospitals benefit by reducing complications, readmissions, and overall episode spending in the SNF setting.

Equally important, TEAM explicitly enables financial collaboration between hospitals and SNFs. Hospitals can enter into gainsharing arrangements with SNF collaborators, sharing a portion of any savings achieved during an episode​.

In practice, this means a SNF that helps a TEAM hospital lower costs (through shorter lengths of stay, fewer readmissions, etc.) could earn bonus payments. Indeed, industry experts note that SNFs may negotiate formal collaborator agreements with TEAM hospitals to gainshare in cost reductions​.

However, only SNFs that have forged strong relationships and demonstrated value will be invited to the table. In short, your SNF’s referral network – or lack thereof – will directly impact your ability to participate in TEAM and thrive financially under value-based care.

We’ll explore two scenarios in separate blog posts: this blog will focus on SNFs already embedded in hospital networks, and the next one on those still building connections.