The CMS TEAM Model started on January 1, 2026, shifting from fee-for-service to episode-based payments for five major surgical procedures. Single payments are currently given to hospitals as full treatment programs starting with the hospitalization and ending with 30 or 90 days after the release.
The classical care TEAMs charge on a case-by-case basis and hand the patient over on discharge. The CMS TEAM Model requires the combined activities of hospitalization, post-acute interventions, and home-based recovery. Hospitals are accountable for total episode costs, quality outcomes, and care management through post-discharge recovery. This comparison tells why, what changed, and why hospitals need to evolve surrounding episode-based care as it transforms the way hospitals operate up to 2030.
What Is the CMS TEAM Model?
The Medicare TEAM Model bundles payments around complete treatment episodes rather than individual services. Medicare sets target prices based on historical costs and regional benchmarks. Hospitals spending below targets receive bonus payments. Those exceeding targets face financial penalties.
Five procedures fall under mandatory TEAM coverage:
- Lower extremity joint replacements
- Surgical hip and femur fracture treatments
- Spinal fusion procedures
- Coronary artery bypass grafts
- Major bowel surgeries
Episode windows begin at hospital admission. Most procedures carry 30-day post-discharge accountability periods. Major bowel procedures extend to 90 days.
How Traditional Care Teams Function
The old hospital TEAMs have a departmental scope of operations. Some surgeons offer the procedures, nurses who offer bedside care, and therapists who offer rehabilitation. Each professional bills Medicare separately for services rendered. Payment relies on service volume rather than outcomes.
The process of care coordination occurs unofficially in the form of phone calls and faxed documents. There is little continuity in communication between discharge planners and post-acute placements. As soon as patients are discharged to skilled nursing health care facilities or sent home, the hospitals lose track of the progress of recovery.
Key characteristics include:
- Responsibility ends at hospital discharge
- Limited interdepartmental communication
- Quality metrics are tracked separately from payment
- Minimal post-acute care oversight
Core Differences Between Models
The shift from traditional structures to episode-based accountability changes fundamental hospital operations. Payment methods, care coordination requirements, accountability timelines, and technology needs all transform under the new model.
Payment Structure Transformation
- Traditional approach: Hospitals bill separately for surgery, anesthesia, room charges, medications, lab tests, and imaging. More services generate more revenue. Financial success comes from high patient volumes and maximized ancillary service utilization.
- CMS TEAM Model approach: Single episode payment involves all services in the form of admission up to post-discharge recovery. Medicare bases its target prices upon past expenditures and geographic modifications. Quality performance directly affects final reconciliation amounts.
Hospitals face financial risk for total episode costs. A patient requiring readmission for surgical complications costs the hospital twice, once for treating the complication and again for reduced episode margin. Extended skilled nursing facility stays erode profitability even when clinically appropriate.
Care Coordination Requirements
Traditional models rely on informal coordination through phone calls and faxed documents between care settings. The TEAM Model CMS demands structured workflows with defined accountability points throughout the patient journey.
Episode coordinators oversee the complete care episode, from pre-admission evaluation to post-discharge rehabilitation. They book pre-operative assessments, manage post-acute placements, and follow up with patients once they have been discharged. Real-time monitoring tracks patient progress during recovery periods with rapid intervention when issues develop.
Structured touchpoints include:
- Scheduled patient check-ins at 24 hours, 72 hours, one week, and 30 days post-discharge
- Direct communication between hospital TEAMs and post-acute facilities
- Immediate escalation protocols when complications arise
Care coordinators maintain continuous contact with patients and receiving facilities. When a joint replacement patient reports increased pain during follow-up, TEAMs schedule same-day evaluations rather than waiting for emergency visits.
Accountability Timeline Extension
The accountability window creates the starkest difference between models.
| Aspect | Traditional Model | CMS TEAM Model |
| Responsibility Period | Admission to discharge | Admission through 30-90 days post-discharge |
| Post-Acute Oversight | None required | Mandatory tracking and intervention |
| Readmission Impact | Separate penalty program | Direct episode payment reduction |
| SNF/Home Health Costs | Not a hospital concern | Included in episode budget |
Traditional TEAMs focus on discharge readiness, stable vital signs, controlled pain, and basic mobility. Episode-based TEAMs must ensure successful home recovery, therapy completion, and complication prevention weeks after discharge.
Quality Measurement Integration
Both models measure quality, but financial consequences differ dramatically. Traditional quality programs run parallel to fee-for-service payments with modest payment reductions for hospital-acquired conditions. Patient satisfaction surveys affect star ratings independently from service billing.
Medicare TEAM Model quality scoring directly adjusts episode payments through reconciliation calculations. High performers receive larger shares of savings while poor performers face steeper penalties. Hospitals cannot achieve financial success without strong quality performance across multiple domains.
Quality measures include:
- Complication rates during hospitalization
- Patient-reported outcomes at 30 and 90 days
- Mortality within episode windows
- Emergency department visits post-discharge
The model inseparably links payment and outcomes, making quality performance essential for financial viability.
Technology Infrastructure Needs
Episode success depends on integrated data systems that traditional hospital technology cannot support. Legacy electronic health records document care within hospital walls only. Quality nurses manually review charts quarterly for reporting. Care managers juggle disconnected software platforms that don’t communicate, creating visibility gaps.
Essential Digital Capabilities
TEAM Model CMS requires platforms that consolidate data from multiple sources into unified dashboards. Real-time episode identification automatically flags patients qualifying for TEAM procedures. Predictive analytics using AI identifies high-risk patients before complications develop.
Critical platform features:
- Care coordination workflows with automated task assignments
- Bidirectional data exchange with post-acute facilities
- Live financial tracking against episode targets
- Automated quality data collection and CMS submission
TEAM Structure and Roles
Traditional hierarchies organize TEAMs by clinical discipline with clear departmental boundaries. Episode-based care requires expanded TEAMs with new roles focused on longitudinal patient management across care settings.
New Episode-Based Positions
Episode coordinators oversee complete patient journeys from pre-admission assessments through post-discharge recovery. They schedule pre-operative evaluations, coordinate post-acute placements, and monitor patients after hospital discharge.
Care navigators maintain direct patient contact throughout episodes. They make organized follow-up calls, problem-solve recovery barriers, and have the ability to escalate the issue to clinical TEAMs in the event of complications arising.
Additional specialized roles include:
- Data analysts tracking episode performance and identifying cost drivers in real-time
- Post-acute liaisons are building collaborative relationships with skilled nursing facilities
- Care managers focusing on high-risk patient populations
Frequent interdisciplinary rounds are substituted with daily huddles. The TEAMs examine high-risk patients, debate cost outliers, and make changes to the care plans as per real-time information.
Financial Risk Distribution
Fee-for-service payment shields hospitals from financial risk. Medicare reimburses submitted claims minus denied services, creating revenue predictability. Post-acute care costs belong to downstream providers with no hospital accountability.
Episode-Based Risk Management
Episode payments flip the risk equation entirely. Hospitals own total cost of care within episode windows, including index hospitalization expenses, related readmissions, skilled nursing facility stays, home health services, outpatient therapy, and emergency department visits.
A patient requiring readmission for surgical complications costs the hospital twice, once for treating the complication and again for reduced episode margin. Extended skilled nursing facility stays erode profitability even when clinically appropriate.
CMS adjusts target prices for patient complexity using hierarchical condition categories. However, hospitals must carefully manage resource utilization across all episode components.
Performance year reconciliation happens months after episode completion. Hospitals submit quality data and await final payment reconciliation. Those meeting savings and quality targets share gains with Medicare. Those exceeding targets and missing quality benchmarks repay CMS through recoupment.
Performance Measurement Comparison
Traditional models measure quality through distinct programs: hospital-acquired condition reduction, readmission reduction, and value-based purchasing. Each uses specific methodologies and applies separate payment adjustments. Hospitals optimize for individual program requirements independently.
Composite Quality Scoring
The TEAM Model CMS combines multiple quality domains into composite scores directly affecting reconciliation payments. Clinical outcomes are used to monitor complication rates, mortality, and emergency visits in an episode. Patient experience is used to measure satisfaction with pain management, quality of communication, and quality of care coordination.
The patient-reported outcomes evaluate functional status at 30 and 90 days utilizing validated tools. The care transitions assess discharge planning, medication reconciliation, and follow-up appointments.
Both categories are given the same weight, which requires the hospitals to do well in all areas. High patient experience scores are required alongside clinical excellence to meet quality thresholds. The quality thresholds dictate the sharing of savings or a complete repayment of losses to the hospitals.
Final Call
The move from traditional care TEAMs to the CMS TEAM Model marks a major shift in healthcare reimbursement. Hospitals must transition from volume-based delivery to value-driven care that spans the full patient journey. Success depends on strong care coordination, integrated technology, and collaboration beyond hospital walls. Organizations that adapt early are better positioned for sustainable performance and improved outcomes.Persivia delivers the tools hospitals need to succeed under episode-based payment models. CareSpace® unifies analytics, AI-powered care coordination, and post-acute connectivity into one streamlined platform. Hospitals gain real-time visibility, reduce readmissions, and manage episode costs more effectively. Proven results, including significant savings and improved outcomes, make CareSpace® a strategic advantage.