Preparing for 2026: What Healthcare Providers Should Know About the CMS Team Model

Healthcare providers across 797 regions need to gear up for a major payment shift. Starting January 2026, the Centers for Medicare & Medicaid Services will roll out a mandatory episode-based payment system that changes how hospitals get paid for surgical procedures. What is cms team model exactly? It's a five-year accountability program that bundles payments for entire surgical episodes, making hospitals responsible for both costs and quality outcomes from surgery through recovery.

What Does the CMS TEAM Model Actually Mean?

The Transforming Episode Accountability Model (TEAM) replaces fee-for-service payments with bundled episode payments. Hospitals receive one payment covering the entire surgical episode - from pre-op through post-discharge care.

Cms team model operates differently from traditional Medicare payments. Instead of billing separately for each service, hospitals get paid upfront for the complete episode. If actual costs exceed the target price, hospitals pay the difference. If they spend less while maintaining quality, they keep the savings.

Which Hospitals Must Participate?

TEAM participation is mandatory for hospitals in selected metropolitan areas. CMS identified 797 core-based statistical areas where hospitals must join the program.

This isn't optional like previous bundled payment models. Hospitals in these regions cannot opt out of TEAM participation.

What Surgical Episodes Are Covered?

The model focuses on high-volume surgical procedures where care coordination makes the biggest impact:

• Orthopedic surgeries - joint replacements, spine procedures • Cardiac procedures - bypass surgery, valve replacements
• General surgery - gallbladder removal, hernia repairs • Specialty surgeries - selected procedures based on volume and standardization

How Should Hospitals Prepare Right Now?

Start with data analysis. Review your current performance on these surgical episodes. Look at historical costs, readmission rates, and length of stay patterns.

Build post-acute partnerships. Since episodes extend beyond hospital discharge, establish relationships with skilled nursing facilities, home health agencies, and rehabilitation centers.

Assess your care coordination systems. TEAM requires seamless communication between surgical teams, discharge planners, and post-acute providers.

What Are the Key Deadlines?

CMS will release baseline data to participating hospitals in late 2025. This gives hospitals roughly 17 months to prepare before the January 2026 start date.

2024-2025: Assessment and planning phase Late 2025: Baseline data release from CMS January 2026: TEAM model implementation begins

What Financial Risks Should Hospitals Expect?

Hospitals face both upside and downside financial risk. Poor performance means paying back money to Medicare. Strong performance allows hospitals to keep savings from efficient care delivery.

The model includes quality measures focusing on patient safety, care coordination, and patient-reported outcomes. Hospitals must meet quality thresholds to earn shared savings.

How Will Success Be Measured?

TEAM uses a combination of cost and quality metrics:

• Cost performance - actual episode costs versus target prices 

• Quality measures - patient safety indicators, readmission rates 

• Patient outcomes - functional improvement, patient satisfaction 

• Care coordination - communication between providers’

Conclusion

The CMS TEAM model represents healthcare's shift toward value-based care. Hospitals that start preparing now will be better positioned to succeed when mandatory participation begins in 2026. Focus on data analysis, care coordination, and post-acute partnerships to build a foundation for episode-based success.

Ready to navigate the complexities of healthcare transformation? Persivia helps healthcare organizations prepare for value-based care models like TEAM through strategic planning, data analytics, and operational optimization. Our healthcare experts understand the nuances of episode-based payments and can guide your organization through successful implementation. Partner with us to turn regulatory challenges into competitive advantages.

CMS TEAM Model & Its Impact On Surgical Episode Reimbursement

The CMS TEAM Model fundamentally alters how Medicare pays for surgical care, replacing traditional fee-for-service with episode-based bundled payments starting January 1, 2026. This mandatory program affects 741 hospitals across 76 metropolitan areas, bundling all surgical costs into single payments that cover 30 days post-discharge. Hospitals face financial risk as they become accountable for both costs and quality outcomes during these episodes.

How Does the CMS TEAM Model Change Surgical Reimbursement?

The TEAM Model CMS replaces individual service billing with predetermined episode payments. The bundled payment will cover all items and services covered under Medicare Part A and B during the 30-day episode period.

CMS sets target prices for each surgical episode based on historical data and regional factors. Hospitals receive this fixed amount regardless of the actual services provided during the episode.

TEAM covers these five procedures:

• Coronary artery bypass grafting
• Hip and femur fracture repairs
• Lower extremity joint replacement
• Spinal fusion
• Dialysis shunt procedures

What Are Episode-Based Payments?

Episode-based payments bundle all costs related to a surgical procedure into one payment. Participating hospitals would receive a target price to cover all costs associated with a 30-day episode of care from admission through discharge, plus 30 days.

This includes:

• Hospital facility costs
• Physician services
• Post-acute care
• Readmissions
• Complications

How Are Target Prices Calculated Under the TEAM Model CMS?

CMS calculates target prices using historical Medicare spending data for each procedure type. Hospitals that meet the quality threshold can receive up to a 10% increase in any positive NPRA earned or a reduction of up to 15% in any negative NPRA based on their quality performance.

Target price factors include:

• Regional wage adjustments
• Hospital case mix
• Historical episode costs
• Quality performance scores

CMS updates these prices each year using Medicare cost data and economic factors.

What Financial Risks Do Hospitals Face?

Hospitals lose money when episode costs exceed target prices. A single complicated case can wipe out profits from multiple successful episodes. If hospitals spend less than the target price and meet quality standards, they will receive a payment from Medicare. However, if they spend more than the target price, they will owe Medicare a repayment.

Financial outcomes depend on cost management:

• Under target spending: Shared savings payments
• Over target spending: Repayment obligations to CMS
• Quality failures: Reduced payments or increased penalties

Poor quality scores can eliminate shared savings entirely.

How Do Quality Measures Affect Reimbursement?

The Medicare TEAM Model directly ties payments to quality performance through composite quality scores (CQS). Under the TEAM program, participant performance on quality measures will influence their composite quality score (CQS), which in turn directly affects payment reconciliation at the end of each performance year.

Quality measures include:

• Care coordination metrics
• Patient safety indicators
• Patient-reported outcomes
• Readmission rates
• Complication rates

Perhaps the most unique update in this proposed model is the direct tying of reimbursement to quality measures as reported by patients themselves via PROs. This patient feedback directly impacts hospital payments.

Implementation Challenges

Hospitals will experience the most direct impact. Through the hospitals' required participation in the TEAM model, they will assume financial responsibility for "episodes" and may have to facilitate physician change management and make operational updates as a result.

Major challenges include:

• Care coordination across multiple providers
• Post-discharge monitoring systems
• Quality data collection and reporting
• Physician alignment and engagement
• Technology system integration

How Can Hospitals Profit from TEAM?

Hospitals that control episode costs while maintaining quality earn shared savings. The key is preventing complications and readmissions.

Benefits include:

• Reduced unnecessary services
• Better care coordination
• Improved patient satisfaction
• Shared savings opportunities
• Enhanced quality metrics

Final Call

The CMS TEAM Model eliminates fee-for-service billing for surgical episodes. Hospitals now get paid once per episode, not for each service provided. Preparation is critical. Hospitals need episode tracking systems, care coordination protocols, and quality monitoring tools before January 2026.

Transform your surgical episode management with confidence. 

Persivia offers comprehensive healthcare analytics platforms that help hospitals optimize episode-based care delivery and maximize performance under the CMS TEAM Model. Our solutions provide real-time episode cost tracking, quality measure monitoring, and care coordination insights that drive better outcomes and financial performance.

Don’t navigate episode-based payments alone. Partner with Persivia and turn the CMS TEAM Model into a competitive advantage for your hospital.

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Understanding the CMS Team Model: A Shift in Medicare Payment Reform

Healthcare is getting a major makeover, and the CMS Team Model is leading the charge. Starting January 1, 2026, hospitals across 797 regions will operate under new rules that fundamentally change how Medicare pays for surgical care. Instead of the traditional fee-for-service approach, hospitals will now be accountable for both the cost and quality of care for 30 days after surgery.

What is the CMS Team Model?

The CMS Team Model (Transforming Episode Accountability Model) is a mandatory payment system where hospitals take financial responsibility for surgical episodes. Hospitals receive a target price to cover all costs from surgery through 30 days post-discharge, including follow-up visits and skilled nursing care.

This model affects five major surgical procedures:

• Lower extremity joint replacement
• Surgical hip and femur fracture treatment
• Spinal fusion
• Coronary artery bypass graft
• Major bowel procedures

How Does the Team Model Work?

The team model cms operates through episode-based payments. Hospitals get a predetermined target price for each surgical episode. If actual costs fall below this target, hospitals keep the savings. If costs exceed the target, hospitals must pay the difference.

Each episode begins when a patient undergoes surgery and ends 30 days after hospital discharge. The model includes three participation tracks with different risk levels, giving hospitals flexibility based on their capabilities.

Who Must Participate?

Participation is mandatory for acute care hospitals in selected geographic areas. CMS chose approximately 25% of eligible regions using stratified random sampling. Hospitals currently in BPCI Advanced or CJR models can voluntarily opt in during January 2025.

Safety net hospitals and rural hospitals receive special considerations, including extended glide paths and reduced financial risk options.

What Are the Financial Implications?

The model aims to save Medicare $481 million over five years. Hospitals can earn payments when episode costs stay below target prices, but they face repayment obligations when costs exceed targets.

Quality performance directly affects payments. Hospitals must meet specific quality measures, including readmission rates and patient safety indicators. Poor quality performance can reduce payment rewards or increase repayment amounts.

Key Benefits for Healthcare Providers

The model encourages better care coordination between hospitals and post-acute care providers. Hospitals must now think beyond discharge, focusing on:

• Reducing readmissions
• Improving care transitions
• Connecting patients to primary care
• Coordinating with skilled nursing facilities

What This Means for Patients

Patients should expect more coordinated care throughout their surgical journey. Hospitals will invest in better discharge planning and follow-up care since they're financially responsible for 30-day outcomes.

The model also promotes primary care connections, helping patients establish long-term healthcare relationships beyond their surgical episode.

Preparing for Implementation

Hospitals have until January 2026 to prepare. CMS will provide baseline data and target prices at least one month before each performance year begins. Hospitals must select their participation track and establish data sharing agreements with CMS.

The model requires significant operational changes, from care coordination systems to financial risk management strategies.

Conclusion

The CMS Team Model represents a fundamental shift from volume-based to value-based healthcare payments. By holding hospitals accountable for surgical episode outcomes, this model aims to improve care quality while reducing Medicare spending.

Healthcare organizations need strategic guidance to navigate this transformation successfully. Persivia specializes in helping healthcare providers adapt to value-based care models like TEAM. Our expertise in Medicare payment reform and care coordination strategies positions healthcare organizations for success in this new era of accountability. Partner with Persivia to turn regulatory challenges into competitive advantages.

AI in Care Management Program: Real-Time Risk Scoring & Patient Stratification

Healthcare organizations handle enormous patient datasets while trying to pinpoint who needs urgent care. AI in care management Program technology converts this data overload into clear action items, spotting high-risk patients before crises hit.

It means using smart systems to watch patient data around the clock and predict health problems before they happen. These platforms pull information from medical records, insurance claims, and social factors to build complete patient pictures.

What sets this apart from old-school methods:

• Crunches thousands of data points fast
• Spots trends that slip past human eyes
• Updates patient risk levels as things change
• Ranks who needs help first based on medical evidence

How Does Real-Time Risk Scoring Work?

Real-time risk scoring assigns numbers to show how likely a patient is to have serious health problems. The system changes these numbers automatically when new information comes in.

AI in Care Management Programs looks at key health signals:

• Past hospital stays and ER visits
• Whether patients take their medications
• Living situations and access to transportation
• How chronic diseases are progressing
• Test results and vital signs

The scoring updates immediately when fresh data arrives. A patient's risk level jumps from medium to high after skipping several medication pickups, which alerts care coordinators right away.

What is Patient Stratification in Healthcare?

Patient stratification sorts people into risk groups so care teams can target their efforts. Instead of treating everyone the same, Care Management Programs put energy where it counts most.

Medical stratification breaks down like this:

• High-risk: Patients facing hospital admission within 30 days
• Rising risk: Patients whose health is getting worse and needs watching
• Stable: Patients doing okay with regular checkups
• Low-risk: Healthy patients who need preventive care

This method lets care teams use their time wisely. Complex patients get intensive attention while stable ones get appropriate check-ins.

Why Organizations Need AI-Driven Care Management

Medical costs keep climbing while patients' health is deteriorating, and care is becoming more complicated. Old care management depends on reading charts by hand and checking in periodically, which misses important changes between appointments.

Care Management Programs with AI tackle these issues:

• Cut ER visits by catching problems early
• Stop expensive readmissions by flagging discharge risks
• Get patients to take medications through automated tracking
• Link care between different doctors and specialists

Organizations using these systems see better patient results while spending less per person. The technology pays for itself by preventing emergencies and using resources smarter.

How Healthcare Providers Implement AI Care Management

Getting started means connecting data from current systems. Most healthcare facilities already gather what they need via EHRs, billing systems, or patient apps.

Main steps for rollout:

• Link data sources to build complete patient profiles
• Train clinical staff on new processes and alerts
• Create rules for responding when risk scores change
• Build dashboards so care teams can coordinate

Success comes from picking platforms that work with existing technology while giving care teams the information they can act on fast.

Takeaway

AI-powered care management shifts healthcare from fixing problems to preventing them. When you combine real-time risk scoring with smart patient grouping, care organizations can focus their efforts where they matter most, all while getting better results across all patients.

Reform your care management approach today.

Persivia offers platforms that work with your current systems, giving you real-time insights that help care teams make smart decisions quickly. Our solutions have helped healthcare organizations cut readmissions and boost patient satisfaction while keeping costs under control.

Explore Persivia's Care Management Solution Today. 

How Health Data Management Platforms Improve Interoperability and Workflow

Hospitals run on dozens of software systems that can't share information. Health Data Platforms bridge these gaps so doctors can access complete patient records instead of hunting through separate databases.

Health Data Management Platforms (HDMPs) pull patient records from all the different computer systems in a hospital or clinic network. They take information scattered across lab systems, imaging databases, and doctors' notes and put it all in one place.

What they do:

• Connect systems that normally can't share data
• Turn medical records into a format everyone can read
• Give doctors one place to find everything about a patient

How Do These Platforms Improve Interoperability?

Interoperability means different medical systems can share information. HDMPs create connections between incompatible systems by converting data formats and establishing communication protocols.

When a patient gets an X-ray at one hospital, their primary care doctor often never sees those results. Data management platforms ensure medical information moves with patients across different healthcare facilities.

What Workflow Problems Do They Solve?

Medical staff waste hours every day trying to find patient information. Nurses call other hospitals asking for test results. Doctors order the same blood work twice because they can't find the first results.

HDMPs stop this waste:

• No more duplicate tests because doctors can't find the original results
• Less time spent on the phone asking for records
• Faster referrals to specialists
• Fewer medical mistakes from missing information

How Do They Speed Up Patient Care?

Doctors make decisions faster when they have all the facts. In the emergency room, knowing a patient's drug allergies right away can save their life instead of waiting three hours for their regular doctor's office to fax records.

The systems also handle boring data entry work. Lab results show up in patient charts automatically instead of someone typing them in by hand.

What Security Features Protect Patient Data?

Patient records need serious protection. HDMPs use multiple locks on the data, encryption, password controls, and logs that track everyone who looks at patient information.

Security features:

• Only certain staff can see certain types of records
• The system kicks you out if you walk away from your computer
• Every time someone looks at a patient's record, the system records it
• All data gets scrambled when it moves between computers

How Do They Reduce Healthcare Costs?

These platforms save money by stopping waste. Hospitals don't repeat expensive MRI scans when they can see the results from last week's scan at another facility.

The biggest savings come from less paperwork. Staff spend time with patients instead of hunting down medical records. Bills get paid faster when all the patient information is in one place.

What Implementation Challenges Exist?

Connecting legacy systems with modern platforms costs significant time and money. Many hospitals operate computer systems installed in the 1990s that require extensive modifications before they can interface with current HDMPs.

Training staff represents another major hurdle. Medical professionals must learn different workflows and adapt to new methods of accessing patient information.

How Do Patients Benefit?

Patients get better care when their whole medical team knows their complete story. They don't have to repeat their medical history at every appointment or worry about dangerous drug combinations.

When all doctors treating a patient can see the same information, they coordinate better. This means fewer medical errors and better treatment results.

Takeaway

Health data management platforms solve a basic problem in healthcare - getting patient information to the right people at the right time. They connect systems that hospitals have been using separately for years.

Healthcare organizations looking to connect their scattered data systems need platforms that actually work with existing hospital technology. Persivia offers health data management platforms that link different medical systems, cut down on wasted time, and help medical teams coordinate patient care better.

See How Persivia Works. Get Started Today.