What Does The CMS TEAM Model Signal About The Future of CMS Payment Models?

The CMS TEAM Model (Transforming Episode Accountability Model) starts in 2026 and runs through 2030. CMS mandates participation for selected hospitals. Hospitals become financially responsible for surgical episodes like joint replacements, spinal fusions, and major bowel surgeries. The model spans 30 days after surgery, measuring both costs and quality. Early participants achieve 4% better pricing compared to national benchmarks while maintaining quality standards.

Mandatory Participation Shows CMS Moving Away from Voluntary Programs

The CMS TEAM Model requires hospital participation, rather than making it optional. Earlier payment models let organizations choose whether to join. CMS picks hospitals by location and how many surgeries they perform. This signals future payment reforms will likely be mandatory rather than voluntary.

Surgical Focus Shows CMS Testing Before Broader Rollout

The TEAM Model CMS focuses on surgeries with known costs and clear outcomes. Joint replacements, spinal fusions, and bowel surgeries follow standard treatment steps. CMS tests episode payments on these procedures first before adding harder-to-predict conditions. This suggests CMS will expand episode payments gradually to other medical areas once surgical episodes prove successful.

Financial Risk Elements

• Spending above episode target prices reduces payments
• Quality score penalties for missed benchmarks
• Readmission costs come from episode budgets
• Post-acute care expenses count toward episode totals

30-Day Windows Indicate Shorter Accountability Periods Ahead

Hospitals are responsible for patient care during the 30 days after surgery. Older bundled payment programs used 90-day windows. The shorter period covers immediate recovery and complications. CMS appears to be checking if shorter episodes work as well with less paperwork. Future payment models may use these condensed timeframes instead of longer periods.

Five Years Shows CMS Commitment to Episode-Based Models

CMS built the TEAM Model to last until 2030. Hospitals operate under these payment rules for five years. This extended timeline means CMS plans serious testing rather than short pilots. Organizations can expect episode-based payments to become a permanent part of Medicare rather than a temporary experiment. This extended timeline indicates CMS plans sustained testing rather than short pilot programs. The duration also gives organizations time to develop care coordination systems and see measurable results.

Dual Metrics Point to Quality-Cost Balance in Future Models

The model measures both spending and clinical outcomes. Hospitals can't succeed by cutting costs alone if quality declines. This dual accountability suggests future CMS models will continue linking financial performance to patient outcomes rather than rewarding cost reduction independently. Expect all future payment reforms to include quality requirements alongside spending targets.

Signals About Future Medicare Policies

The TEAM Model reveals CMS priorities for future payment reforms. Episode-based approaches may expand to additional procedures and conditions. More payment models will likely include downside risk, where providers lose money for poor performance.

CMS appears committed to moving away from pure fee-for-service toward models that reward outcomes and cost management. Organizations unprepared for these payment structures will face financial challenges as Medicare expands alternative payment models.

What Future Payment Models Will Likely Include

• Mandatory participation replacing voluntary programs
• Episode-based payments expanding to medical conditions beyond surgery
• Shorter accountability windows under 90 days
• Combined cost and quality metrics determining payments
• Multi-year implementation periods for system development

Hospital Preparation Needs Start Now

The model starts in 2026, but hospitals need their systems ready earlier. They need software that tracks costs for 30 days after surgery, connects with rehab facilities and home health agencies, and watches quality numbers. Implementation planning should begin well before mandatory participation dates.

About Persivia

Persivia's platforms support healthcare organizations managing episode-based payment models, including the CMS TEAM Model. This technology tracks episode costs, monitors quality performance, and coordinates care across multiple providers. Health systems using Persivia’s solutions achieve better pricing than national averages while meeting quality standards.