CMS TEAM Model: What Hospitals Need to Know About the New Surgical Bundles

CMS is testing new payment methods for surgical procedures. One of them is the Transforming Episode Accountability Model (TEAM), launching in 2026. It bundles surgical payments to include all related services from pre-op to post-op care. Hospitals get one payment that covers the entire surgical episode instead of separate bills for each service.

The CMS TEAM Model is a bundled payment system for surgical procedures. It combines payments for the surgeon, hospital, anesthesiologist, and follow-up care into one package deal.

CMS pays a fixed amount for each surgery type. The surgical TEAM splits this payment among all providers involved in the patient's care.

How Surgical Bundles Work

CMS looks at historical costs for each surgery type. They set a target price that covers all services for 30 days after discharge. If the team spends less, they keep the savings. If they spend more, they lose money.

The bundle includes:

• Pre-surgery consultations and tests
• Operating room costs and supplies
• Surgeon and anesthesiologist fees
• Hospital stay and nursing care
• Follow-up visits and complications

Which Procedures Are Included

The program focuses on common surgeries with predictable costs. Hip and knee replacements are the main targets. CMS may add cardiac procedures and other major surgeries later.

Current procedures include:

• Hip replacement surgery
• Knee replacement surgery
• Hip fracture repair
• Revision joint surgeries

Why Should Hospitals Participate?

Hospitals can make more money by reducing problems and readmissions. The bundle system rewards efficiency and quality outcomes over volume of services.

Key advantages:

• Shared savings when costs stay low
• Predictable revenue for each surgery
• Incentives to prevent complications
• Better coordination between providers

Problems Hospitals Encounter

Hospitals must keep track of all surgery-related costs. They require new methods to track spending and coordinate care across several providers. Many hospitals struggle with data collecting and reporting.

Common challenges:

• Complex cost tracking requirements
• Need for better care coordination
• Risk of losing money on complicated cases
• Administrative burden of reporting

Implementation Requirements

Hospitals need software that tracks all costs related to each surgical episode. They must coordinate with surgeons, anesthesiologists, and other providers to share financial risk.

TEAM is a mandatory model for selected hospitals in specific geographic regions, which makes early preparation even more important.

Essential requirements:

• Cost tracking systems
• Data reporting capabilities
• Provider agreements on payment splits
• Quality monitoring tools

How Does Bundled Payment Affect Hospital Revenue?

Facilities with fewer challenges and readmissions make more money. Those with high complication rates lose money because they exceed the bundle payment amount.

Revenue factors:

• Length of hospital stay
• Surgical complications
• Readmission rates
• Post-surgery care costs

Getting Ready for Bundle Payments

Begin by determining current surgical prices. Determine where costs can be decreased. Collaborate with surgeons to standardise processes and eliminate variation in care.

Preparation steps:

• Review historical surgery costs
• Identify cost reduction opportunities
• Improve care coordination processes
• Invest in data tracking systems

Takeaway

The TEAM Model CMS changes how hospitals get paid for surgery. Success depends on reducing costs while maintaining quality. Hospitals need better data systems and stronger coordination between providers.

Hospitals that prepare now will profit from bundled payments. Those who wait will struggle to meet the new requirements and may lose money on surgical cases.

Ready to handle CMS bundle payments? 

Persivia offers healthcare platforms that track surgical costs and manage bundled payment programs. Our systems help hospitals coordinate care and monitor financial performance in real-time.

Get Started With Persivia Today.