Understanding The CMS TEAM Model: What Healthcare Leaders Need To Know

The Centers for Medicare & Medicaid Services' Transforming Episode Accountability Model (TEAM) represents a major shift in healthcare payment systems that demands attention. Starting January 1, 2026, this mandatory bundled payment model will impact hospitals performing five key procedures: 

• Lower extremity joint replacements
• Surgical hip femur fracture treatments
• Spinal fusions
• Coronary artery bypass grafts
• Major bowel procedures 

The financial implications are substantial with these procedures accounting for approximately 6% of hospitals' Medicare inpatient volumes nationwide. Healthcare leaders need a clear understanding of the CMS Team Model structure, requirements, and potential impacts to develop effective strategies for success under this new model.

How TEAM Works

The TEAM Model creates a framework focused on episodes of care rather than individual services. Under this mandatory program:

• Selected acute-care hospitals must coordinate care for Medicare beneficiaries from surgery through the first 30 days post-discharge
• Hospitals assume responsibility for both cost and quality outcomes during this period
• All participating hospitals must refer patients to primary care services to support continuity of care
• The model will cover over 200,000 episodes annually across selected hospitals based on core-based statistical areas (CBSAs)

TEAM includes three distinct tracks with varying levels of risk and reward. Track 1 offers no downside risk with lower reward levels for the first year. Track 2 provides lower risk/reward levels for certain facilities (including safety net hospitals) for years two through five. Track 3 features higher risk/reward potential throughout the five-year model period. This tiered approach allows for some customization based on hospital capacity and readiness.

Implementation Considerations

Successfully navigating the Team Model CMS requires careful planning and strategic adjustments:

Financial Impact Assessment

Hospitals should thoroughly evaluate their current volumes of the five included procedures to understand potential financial exposure. As Optum's Rob Nation notes, different hospitals will face different challenges depending on their size, resources, and the percentage of contribution margin driven by these procedures.

Care Coordination Infrastructure

Hospitals require strong systems for monitoring patients across care settings. Why? Because TEAM places a strong emphasis on synchronization from surgery through the 30-day post-discharge period. This includes:

• Developing seamless handoff protocols
• Establishing relationships with post-acute providers
• Creating systems for monitoring patient progress after discharge
• Implementing care management programs for high-risk patients 

Data Analytics Capabilitie

Success under the Team Model CMS framework requires strong data analysis capabilities to:

• Identify cost-reduction opportunities
• Monitor quality metrics
• Track performance against benchmarks
• Predict patient outcomes and risk

Challenges and Opportunities

The CMS TEAM Model presents both significant challenges and potential benefits.

Key Challenges

• Potential "model overload" for hospitals already participating in other value-based programs
• Financial strain for smaller facilities with limited resources
• Implementation burden during ongoing financial pressures
• Mandatory nature that forces participation regardless of readiness

Potential Benefits

• Improved care coordination across settings
• Enhanced focus on post-discharge outcomes
• More predictable payment structures
• Incentives aligned with quality improvement
• Opportunity to build capabilities that support other value-based models 

As industry expert Brian Fuller noted, TEAM represents "the most significant mandatory bundled payment model we've ever seen," signaling CMS's commitment to advancing value-based care.

Next Steps For Healthcare Leaders

Healthcare leaders should begin preparation now, despite the 2026 implementation date. Start by assessing your organization's exposure to the five procedures included in the CMS TEAM Model and evaluating your current care coordination capabilities. Persivia's CareSpace® platform offers specialized tools for bundled payment success, including episode tracking, post-acute care coordination, and predictive analytics for identifying high-risk patients. With experience supporting organizations through previous bundled payment initiatives, Persivia helps healthcare providers transition smoothly to new payment models while maintaining financial stability.

For a customized assessment of your organization's readiness for the TEAM Model, contact Persivia's team of value-based care experts today.