A Complete Guide to the CMS TEAM Model: What Hospitals Need to Know

As the Centers for Medicare & Medicaid Services (CMS) continues to push toward value-based care, hospitals across the U.S. are preparing for the launch of a new, mandatory payment model—the Transforming Episode Accountability Model (TEAM) Model. The program is set to begin on January 1, 2026 and is poised to change how hospitals are reimbursed for a range of common surgical procedures.

In this comprehensive guide, we’ll dive into common questions about the CMS TEAM Model including:

• What is the CMS TEAM model?
• How does it work?
• Performance Expectations & Quality Measures
• Timeline for Implementation
• How to Prepare and Strategies for Success

We'll also introduce the Avant-garde Health TEAM Model program and product, designed to help hospitals succeed in this new environment.

Let’s jump in!

What Is the CMS TEAM Model?

The Transforming Episode Accountability Model (TEAM) is a five-year, mandatory, episode-based payment model developed by CMS to enhance care quality and reduce costs for Medicare beneficiaries undergoing specific surgical procedures. The model focuses on holding hospitals financially accountable for the cost and quality of care over a defined episode of care.

TEAM is part of CMS’s broader strategy to move away from traditional fee-for-service (FFS) models and toward value-based care, where healthcare providers are rewarded for outcomes rather than volume.

How Does the CMS TEAM Model Work?

Episode Definition and Scope

The TEAM model focuses on five specific surgical episodes:

1. Lower Extremity Joint Replacement (LEJR)
2. Surgical Hip/Femur Fracture Treatment (SHFFT)
3. Spinal Fusion
4. Coronary Artery Bypass Graft (CABG)
5. Major Bowel Procedures

Each episode begins on the date of the surgical procedure—whether inpatient or outpatient—and extends 30 days after the patient is discharged.

All services during this 30-day period are bundled into a single episode, including hospital stays, physician services, post-acute care, and readmissions.

Payment Model

Hospitals will continue to receive traditional FFS payments during the care episode. At the end of the performance year, CMS compares the total episode costs to a pre-set target price based on three years of historical data, adjusted for regional and hospital-specific factors.

• If the actual costs are below the target and quality standards are met, hospitals may receive a reconciliation payment – a performance bonus.
• If costs exceed the target, hospitals may owe CMS money unless they are in a non-risk or limited-risk track.

Additionally, performance on quality measures can modify these reconciliation payments by up to +-10%, making quality performance essential.

CMS TEAM Performance Track Overview

TEAM offers hospitals a choice of three participation tracks with different levels of financial risk and reward:

Track 1: Upside-Only Risk

• Available in Performance Year 1 (PY1) for all hospitals.
• Safety-net hospitals can remain in this track for up to three years.
• Eligible for up to 10% of the episode target price in bonus payments.
• No downside financial risk.

Track 2: Moderate Risk

• Available in PY2 and beyond for safety-net and rural hospitals.
• Includes both upside and downside risk capped at 10%.
• Offers a balanced risk-reward profile for hospitals ready to take on more responsibility.

Track 3: Full Risk

• Available from PY1.
• Carries both upside and downside risk up to 20%.
• Best suited for hospitals with strong data infrastructure and care coordination capabilities.

Hospitals must select their participation track before the start of each year. If no selection is made, they will automatically default to Track 1.

Quality Measures for CMS TEAM

CMS incorporates quality performance into the TEAM model to ensure that cost savings are not achieved at the expense of patient care. Quality measures are used to adjust financial reconciliation amounts and include both clinical and patient-reported outcomes.

Performance Year 1 (PY1)

• Hybrid Hospital-Wide All-Cause Readmission Measure
• Patient Safety and Adverse Events Composite (PSI 90)
• THA/TKA Patient-Reported Outcome-Based Measure (for LEJR episodes)

Performance Years 2–5 (PY2–PY5)

• Hybrid Hospital-Wide All-Cause Readmission Measure
• Hospital Harm – Falls with Injury
• Hospital Harm – Postoperative Respiratory Failure
• 30-Day Risk-Standardized Death Rate among Surgical Inpatients with Complications (Failure to Rescue)
• THA/TKA Patient-Reported Outcome-Based Measure (for LEJR episodes)

The data will for these quality measures will be pulled from existing CMS quality reporting programs, including the Hospital Inpatient Quality Reporting (IQR) Program and the Hospital-Acquired Condition (HAC) Reduction Program.

When Does the CMS TEAM Model Start? Looking At Key Dates for CMS TEAM

The TEAM model officially begins on January 1, 2026, and will run through December 31, 2030.

Based on the information provided in the CMS Final Rule, here is an overview of the key dates and deadlines for the Transforming Episode Accountability Model (TEAM):

1. Model Launch: January 1, 2026: The TEAM model begins its 5-year performance period.

2. Model End: December 31, 2030: Completion of the TEAM model’s testing phase.

3. One-Year Glide Path Opportunity: January 1, 2026 – December 31, 2026: The initial year of participation will allow hospitals to adjust to the program without full financial risk.

4. CMS Target Price Announcements: Annually, before the start of each performance year: CMS will publish target prices for episodes, based on historical trends and adjustments.

5. Quality Reporting (Ongoing): Participants must submit required data for quality metrics to remain eligible for financial incentives.

These dates reflect the initial implementation timeline and operational structure for the TEAM model. Further rulemaking or CMS updates might refine these deadlines closer to the launch date.

How to Prepare for the CMS TEAM Model

1. Assess Your Baseline Performance

Begin by analyzing your hospital’s current performance in cost and quality metrics. Understand where you stand in terms of readmissions, complications, and patient satisfaction.

2. Strengthen Care Coordination

Improving communication and coordination between providers across the care continuum is critical. This includes inpatient teams, primary care providers, post-acute facilities, and home health services.

3. Invest in Data Analytics

You’ll need robust analytics to track performance, predict costs, and identify trends. High quality data that provides meaningful insights will be your greatest ally in making decisions that reduce costs while maintaining high-quality care.

4. Educate and Engage Staff

Ensure clinical and administrative staff are aware of the TEAM model and its implications. Leadership, physician champions, and quality improvement teams should be aligned and involved in strategic planning.

5. Explore Technology Solutions

Partnering with experts in bundled payment models and analytics can give your hospital a competitive edge. Technology platforms that offer real-time monitoring and predictive insights can streamline compliance and boost performance.

Strategies to Succeed Under CMS TEAM Model

Data Analytics and Benchmarking: Use data analytics to understand historical costs, patient demographics, and outcomes. Identify variations in care that lead to higher costs/poor outcomes and benchmark against industry standards to set realistic targets and continually measure performance.

Care Coordination and Management: Implement coordinated care pathways to streamline the patient journey with a team-based approach involving physicians, nurses, social workers, and care coordinators.

Effective Patient Selection and Risk Stratification: Use risk stratification tools to identify patients who may require additional support or specialized care, allowing the organization to allocate resources more effectively.

Standardization of Clinical Protocols: Standardize care protocols for specific conditions to ensure that care is consistent and evidence-based.

Post-Acute Care Optimization: Develop strong relationships with post-acute care providers, such as rehabilitation centers, skilled nursing facilities, and home health services.

Avant-garde Health’s CMS TEAM Model Product

Avant-garde Health has developed a comprehensive TEAM solution tailored to help hospitals navigate the complexities of this new model. Their platform combines advanced analytics, cost benchmarking, and strategic consulting to improve quality performance and maximize savings.

Key features include:

• Identification of clinical variation and cost drivers
• Episode-of-care benchmarking
• Performance monitoring dashboards
• Compliance support for CMS quality measures

By partnering with Avant-garde Health, hospitals gain access to actionable insights that align clinical decision-making with financial performance under the TEAM model.

To learn more about Avant-garde Health’s TEAM solution or schedule a consultation, you can contact us here!

Preparing for Success Under the CMS TEAM Model

The CMS TEAM model represents a major shift in Medicare’s approach to surgical care reimbursement. By holding hospitals accountable for cost and quality outcomes, TEAM encourages more efficient, patient-centered care. With proper preparation, the right partnerships, and a strong focus on data-driven care coordination, hospitals can not only comply with this new model but thrive within it.

As the 2026 launch approaches, now is the time to evaluate your readiness, build internal capabilities, and align with proven experts like Avant-garde Health.

Taking action today will pave the way for success under TEAM tomorrow.