According to CMS, TEAM will “advance prior work on episode-based alternative payment models, including the Bundled Payments for Care Improvement Advanced and Comprehensive Care for Joint Replacement Models.” The model will launch on January 1, 2026, and run for five years, ending on December 31, 2030. As a mandatory model, all model policies are proposed and finalized through rulemaking. This new model was designed based on lessons learned from previous episode-based payment models and from input from stakeholders.
Overview and Purpose
TEAM will be an episode-based, alternative payment model, in which selected acute care hospitals will coordinate care for people with traditional Medicare undergoing one of the surgical procedures included in the model and assume responsibility for the cost and quality of care from surgery through the first 30 days after the Medicare beneficiary leaves the hospital. CMS used Core-Based Statistical Areas (CBSAs) to identify selected geographic regions for the model test. Hospitals paid under the Inpatient Prospective Payment System (IPPS) and located in the selected CBSAs are required to participate in TEAM.
Participants in the model will connect patients to primary care services to help establish “accountable care relationships” and support optimal, long-term health outcomes. The surgical procedures included in the model will be lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft and major bowel procedure. CMS will provide participants with a target price that will represent most Medicare spending during an episode of care, which will include the surgery (including the hospital inpatient stay or outpatient procedure) and items and services following hospital discharge, such as skilled nursing facility stays or provider follow-up visits.
Holding participants accountable for all the costs of care for an episode may incentivize care coordination, improve patient care transitions, and decrease the risk of avoidable readmission.
People with Traditional Medicare undergoing a surgical procedure either in the hospital or as an outpatient may experience fragmented care that can lead to complications in recovery, avoidable hospitalization, and other high costs. This is because in a fee-for-service (FFS) payment system, providers and suppliers are paid separately for each service and procedure, potentially resulting in fragmented care, duplicative use of resources, and avoidable utilization.
TEAM will test an episode-based payment approach in which acute care hospitals participating in the model, identified as TEAM participants, will receive a target price to cover all costs associated with the episode of care, including the cost of the hospital inpatient stay or outpatient procedure and items and services following hospital discharge, such as skilled nursing facility stays or provider follow-up visits. Through the target price, CMS will hold TEAM participants accountable for spending and quality performance.
Model Design
Hospitals required to participate in TEAM will be based on selected geographic regions, CBSAs, from across the United States. The model includes a one-year glide path available to all TEAM participants, which will allow TEAM participants to ease into full financial risk. TEAM will have three participation tracks:
- Track 1 will have no downside risk and lower levels of reward for the first year, or up to three years for safety net hospitals
- Track 2 will be associated with lower levels of risk and reward for certain TEAM participants, such as safety net hospitals or rural hospitals, for years 2 through 5
- Track 3 will be associated with higher levels of risk and reward for years 1 through 5
TEAM participants will continue to bill Medicare FFS as usual but will receive target prices for included episodes prior to each performance year. Target prices will be based on all Medicare Parts A & B items and services included in an episode and will be risk-adjusted based on beneficiary-level and hospital-level factors. Performance in the model will be assessed by comparing the participants’ actual Medicare FFS spending for the episode to their target price, as well as through an assessment of performance on specific quality measures. TEAM participants may earn a payment from CMS, subject to a quality performance adjustment, if the total Medicare costs for the episode are below the target price. TEAM participants may owe CMS a repayment amount, subject to a quality performance adjustment, if the total Medicare costs for the episode are above the target price.
To learn more about TEAM and whether or not your facility is mandated to participate, or for an opportunity to voluntarily participate, please visit the following website: Transforming Episode Accountability Model (TEAM) | CMS.