CMS’s newly finalized TEAM payment model holds hospitals accountable for entire surgical episodes

Editor's Note

As part of the Centers for Medicare and Medicaid Services (CMS) newly issued 2026 Final Rule, the Transforming Episode Accountability Model (TEAM) will hold hospitals and health systems accountable for the entire episode of care for major surgeries, from admission through 30 days post-discharge. HIT Consultant reported the news July 31.

As detailed in the article, TEAM begins on January 1, 2026. It will apply to 742 mandated facilities and will include five surgical procedures: lower extremity joint replacement, spinal fusion, coronary artery bypass graft, major bowel procedures, and hip/femur fracture treatment. The goal is to reduce complications and reward quality through tech-enabled, outcome-based care payment models.

According to HIT Consultant, these five procedures account for about 20% of current annual Medicare reimbursement at the hospitals that will be required to participate. Medicare currently pays $19.2 billion annually for these procedures, yet outcomes vary significantly. A recent Medicare analysis cited in the article found that total knee arthroplasty has a 16% complication rate, adding $812 to $2,443 per case in additional costs. TEAM is designed to reduce these unnecessary expenses by improving care coordination and quality.

Hospitals will be responsible for overseeing patient care from admission or outpatient procedure through 30 days after discharge, including communication and coordination among providers, patients, and families, the outlet reports. Over the five-year model, select high-performing health systems can earn up to 20% in additional reimbursements, generating more than $100 million in cost savings per system. Across all mandated sites, the total potential incentive payments amount to $3 billion.

The article concludes by urging providers performing any of the covered procedures to visit the CMS website to confirm whether they are directly mandated to participate in TEAM starting in 2026.