The rules of healthcare are shifting fast. Value-based care isn’t just a buzzword anymore—it’s becoming the standard, and CMS is driving the change with increasing force. The latest and most impactful initiative? The new Transforming Episode Accountability Model (TEAM). And it’s not optional.
For hospitals nationwide, TEAM represents a major shift in how payments for certain surgical episodes will be managed, bringing both financial incentives for success and steep penalties for falling short.
TEAM signals the growing expectation that hospitals deliver consistent, connected care far beyond discharge. The time to understand the fine print and prepare is now—before the financial impact hits.
What is the CMS TEAM Mandate?
Effective January 1, 2026, the CMS TEAM model mandates participation for hospitals in selected geographic areas for specific surgical episodes, including:
- Lower Extremity Joint Replacement
- Surgical Hip/Femur Fracture Treatment
- Spinal Fusion
- Coronary Artery Bypass Graft
- Major Bowel Procedures
Unlike previous voluntary bundled payment programs, TEAM is mandatory for included hospitals and those that offer the surgeries listed are required to participate. Financial performance will be directly tied to the organization’s ability to manage costs and, crucially, improve patient outcomes across the entire episode of care.
Why “Can’t Wait” is the New Mantra
Many hospitals are accustomed to a fee-for-service model where payment is rendered for each service provided. TEAM flips this on its head.
Under TEAM, hospitals will be accountable for the total cost and quality of care for a defined episode, from the initial hospital stay through 30 days post-discharge.
To succeed, be prepared to meet the following operational realities head-on:
- Financial penalties are looming. Hospitals that exceed target prices for these episodes or fail to meet quality metrics, will face financial penalties. This isn’t just about missing out on incentives; it’s about losing revenue.
- Maximizing incentives requires proactivity. Conversely, hospitals that efficiently manage costs and achieve excellent patient outcomes can earn significant incentives. But this doesn’t happen by accident. It requires proactive planning, robust care coordination and consistent patient engagement from pre-admission through recovery.
- Overhauling operations is not instantaneous. Implementing the necessary programs, workflows and technologies to succeed under TEAM takes time. From refining patient education pathways to establishing seamless post-discharge follow-up and monitoring, these are complex operational changes that cannot be rushed.
- Your EHR alone is not enough. While your Electronic Health Record (EHR) is foundational, it’s designed for documentation and billing, not comprehensive, patient-centric episode management across the continuum of care. Relying solely on your EHR will leave critical gaps in your TEAM strategy.
These challenges make one thing clear: hospitals must move quickly to adapt or risk falling behind.
The Bottom Line
The CMS TEAM mandate signals a decisive shift toward value-based care. Organizations that step up now, through building the right programs and technologies to manage costs and improve outcomes, can avoid penalties and unlock new revenue. Those that delay risk serious financial disadvantage.
This isn’t just a regulatory update—it’s a call to protect your financial future and raise the standard of care.
Stay tuned for our next post, where we’ll explore the hidden costs of inaction and why a proactive TEAM strategy offers the best protection.
