5 Steps to Prepare for TEAM Bundled Payment Model

The new Transforming Episodic Accountability Model (TEAM) is required for hospitals in 188 selected regions across the county and applicable to roughly 750 hospitals. It’s the first large mandatory payment model from the Centers for Medicare and Medicaid Services (CMS) in many years.

While hospitals must participate, TEAM also presents opportunities or liabilities for other health care providers in those same regions.

TEAM model recap

TEAM was finalized last year and is set to launch January 1, 2026. It will run for five years. TEAM is a two-sided bundled payment model for five specific surgical or procedural groups:

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

Participation is mandatory for hospitals paid under the Medicare prospective payment system (PPS) in 188 Core-Based Statistical Areas (CBSAs). The model is applicable to Medicare fee-for-service (FFS) patients.

TEAM Collaborator, Collaboration Agent
ACOs	Skilled nursing facility (SNF)
Home health agency	Long-term care hospital
Inpatient rehab facility	Physicians
Nonphysician practitioners	Therapist in private practice
Providers of outpatient therapy	Physician group practice
Hospitals, incl. critical access	Therapy group practice
Nonphysician provider group practice

Episodes are triggered at TEAM hospitals. Those hospitals are then held accountable for the cost and quality of the surgery or procedure plus 30 days of post-acute care. This is why hospitals may look to other health care providers — physicians, nursing home and others — as “collaborators” or “collaboration agents.” Only these collaborators can participate in financial arrangements with the TEAM hospital. Other providers may be involved as preferred providers or with certain waiver options like the three-day inpatient stay or telehealth.

TEAM proposed modifications

CMS released several model changes in its proposed fiscal year (FY) 2026 hospital inpatient prospective payment system (PPS) rule but left the bulk of the model intact. One of the proposed changes relates to the three-day inpatient stay waiver.

The current waiver only applies to SNFs and requires a three-star rating or better. CMS proposes expanding the waiver beyond SNFs to include hospitals — rural PPS and critical access — with swing beds. Unlike SNFs, these hospitals are not required to have a certain quality rating since they are not covered by the CMS SNF Star rating program.

Several other proposed TEAM modifications include:

• Replacing the Area Deprivation Index with the Community Deprivation Index in beneficiary risk adjustments, and extending the look-back period to 180-days when establishing Hierarchical Condition Categories (HCC) scores
• Making several changes to the quality scoring approach
• Removing health equity plans, social needs data reporting, and decarbonization and resilience initiative options

5 steps to take now to prepare for TEAM

Hospitals, nursing homes, physicians, home health, and others can review these immediate next steps to determine TEAM’s impact on your organization.

Steps	Hospitals	Other Providers
Determine whether you are in a mandatory CBSA	Are you an acute care hospital paid under the PPS system and located in any of the 188 CBSAs?	Are you located in or around any of the 188 CBSAs?
Determine your exposure to the bundles	How many of these surgeries or procedures do you perform annually for Medicare fee-for-service patients?	Do you currently or want to treat or provide care to patients from these hospitals related to these surgeries or procedures?
Develop collaborators, network	Are specific collaborators important to your performance under the model?	Are you willing to enter into a financial sharing arrangement as a collaborator?
Understand waiver potential	Do you intend to use the three-day stay or telehealth waivers? Do you have preferred providers?	Do you qualify for the three-day stay waiver? What’s your relationship with referring hospitals?
Know the data	Have you analyzed your data to better understand your current performance on these surgeries? What are your quality and patient-reported outcomes? Have you reviewed the data of potential collaborators or providers in your region?	What are your quality ratings? How do ER visits, readmission rates, length of stay or other outcomes look for you on these types of patients? How do you compare with your peers?

How CLA can help with the TEAM model

While it may seem like 2026 is a long time away, it’s not. For hospitals, it will take time to understand the TEAM model, analyze your data, prepare your teams, and establish collaborations or preferred provider networks.

For other health care providers, it will also take time to understand the role you could play in the model, review your referral relationships, improve or maintain your star ratings, and determine whether you want to be a collaborator with a financial sharing arrangement.

CLA can help. We can advise on model details, help you understand if you’re required to participate or if hospitals in your regions are required to participate, analyze your referrals relationships, provide financial insights, and more.

Contact us

Start getting ready now for the new TEAM bundled payment model. Complete the form below to connect with CLA.