The Transforming Episode Accountability Model (TEAM): A new era in healthcare

The Transforming Episode Accountability Model (TEAM) is set to revolutionize how hospitals coordinate care for Medicare beneficiaries undergoing high-risk, high-volume surgical procedures. Slated to start in January 2026, this 5-year, mandatory model will focus on improving patient care quality while controlling costs.  

Here’s an in-depth look at what TEAM entails and its potential to transform the healthcare landscape. 

What is TEAM? 

TEAM is designed to address the challenges of fragmented care for patients undergoing major surgical procedures. When patients undergo complex surgeries, like lower extremity joint replacement, spinal fusion, or coronary artery bypass graft, their recovery can be complicated by poor care coordination. This often leads to rehospitalization, extended recovery times, and higher healthcare costs. 

The TEAM model will hold participating acute-care hospitals accountable for providing coordinated care throughout the patient's entire surgical episode, from the hospital admission through the 30 days post-discharge. Hospitals must ensure smooth transitions across various healthcare settings, including:  

• Inpatient care 

• Outpatient services 

• Home health 

• Skilled nursing facilities.  

They also must foster communication with patients and their families. 

TEAM’s objectives 

TEAM’s goals are ambitious yet crucial: 

1. Improved recovery: By focusing on better coordination and support for patients during recovery, the model aims to ensure quicker recoveries after surgery. 
2. Reduced hospital visits: By minimizing avoidable hospital readmissions and emergency department visits, TEAM seeks to reduce unnecessary healthcare use. 
3. Lower costs: Reducing the overall cost of care for these high-expenditure procedures while maintaining or improving quality is a key driver. 
4. Equitable health outcomes: TEAM emphasizes the need for equitable healthcare outcomes, particularly for underserved populations. 
5. Seamless transitions: Ensuring patients have continuous care after discharge, including a referral to primary-care services, will help improve long-term health outcomes. 

How does TEAM work? 

Acute-care hospitals participating in TEAM must manage the entire care episode, which includes services such as inpatient hospital services, outpatient therapy, clinical laboratory services, durable medical equipment, and hospice care. This comprehensive care model ensures patients don’t fall through the cracks in their recovery journey. 

The model’s payment structure is based on a target price for all services related to an episode. If the participating hospital can provide care for a patient at a cost below the target price, they may earn a bonus. If the hospital's spending exceeds the target price, they may owe a repayment to CMS. This creates a strong financial incentive for hospitals to reduce unnecessary spending while ensuring quality care. 

Evaluating success 

Success in TEAM will be measured through several metrics: 

• Quality of care: Hospitals will be evaluated on patient safety, readmissions, and patient-reported outcomes. 
• Cost effectiveness: Actual spending will be compared to the target price, with hospitals either receiving a payment or incurring a penalty based on their performance. 
• Patient experience: A focus on improving patient satisfaction and the overall experience throughout the episode is integral to the model’s design. 

Flexibility and participation 

TEAM is structured to accommodate hospitals at various levels of risk. There are 3 participation tracks: 

1. Track 1: For hospitals with no downside risk and lower reward potential in the first year, with an extended period for safety-net hospitals 
2. Track 2: For hospitals with lower levels of risk and reward, especially for hospitals serving rural and underserved populations 
3. Track 3: For hospitals that are willing to take on higher levels of risk and reward, with more substantial financial incentives or penalties based on performance 

Safety-net hospitals, in particular, will be given the opportunity to participate with reduced financial pressure, ensuring they can still engage in value-based care without fear of excessive financial risk. 

Health equity in TEAM 

A key focus of TEAM is health equity. Hospitals serving underserved populations may face additional challenges in managing care, and the model accounts for these factors through social risk adjustment. This means target prices will be adjusted to reflect the additional resources needed to care for patients facing social and economic challenges.  

Furthermore, participants are encouraged to submit health-equity plans, report sociodemographic data, and screen for health-related social needs. This will help drive continuous improvement in quality and equity. 

Looking ahead 

When TEAM rolls out in 2026, it will represent a significant shift toward value-based care for Medicare beneficiaries. By focusing on coordinated, comprehensive care for patients undergoing major surgeries, TEAM promises to improve recovery outcomes, reduce unnecessary healthcare use, and lower costs. This model not only aligns with the broader goals of CMS but also ensures that hospitals, especially those serving vulnerable populations, can thrive in an evolving healthcare system. 

The success of TEAM will set a precedent for future episode-based care models, demonstrating how healthcare can evolve to be more patient-centered, cost-effective, and equitable. 

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