CMS is rolling out a new mandatory episode-based payment model set to launch on January 1, 2026. The Transforming Episode Accountability Model (TEAM) will run through December 31, 2030 and is designed to improve care coordination and outcomes for patients undergoing certain surgical procedures. TEAM builds on earlier models like Bundled Payments for Care Improvement Advanced and Comprehensive Care for Joint Replacement.
A May 28 blog post by Coronis Health breaks down the model’s design, which hospitals are affected and what it could mean for future care delivery.
Four takeaways:
1. TEAM is mandatory for selected hospitals.
Hospitals paid under the Inpatient Prospective Payment System and located in selected geographical areas will be required to participate in TEAM. The model applies to traditional Medicare patients undergoing five types of surgical procedures: lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedure.
2. More financial accountability
TEAM participants will be responsible for the cost and quality of care from surgery through 30 days post-discharge. Each hospital will receive a risk-adjusted target price covering Medicare Part A and B services related to the episode, including inpatient or outpatient surgical care, post-acute services, and follow-up visits. If actual spending is below the target and quality thresholds are met, hospitals may earn a payment. If spending exceeds the target, they may owe CMS money.
3. TEAM’s three tracks
To ease into the financial model, CMS is offering a one-year “glide path” for all hospitals and longer for safety net facilities. TEAM includes three tracks designed to help providers manage financial exposure while improving patient outcomes.
- Track 1: No downside risk, reduced reward (Year 1, or up to Year 3 for safety net hospitals)
- Track 2: Lower risk and reward (Years 2–5 for select hospitals)
- Track 3: Full risk and reward (Years 1–5)
4. Reduced fragmentation
Under the current fee-for-service system, multiple providers bill separately for each element of care. TEAM seeks to fix an often disjointed process by aligning hospitals with primary care and post-acute providers to streamline care transitions, improve recovery and lower overall costs.
To learn more, visit: Transforming Episode Accountability Model (TEAM) | CMS
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