What You Should Know:
– The Centers for Medicare & Medicaid Services (CMS) today issued the 2026 Final Rule that officially codifies the Transforming Episode Accountability Model (TEAM), an innovative new blueprint for tech-enabled, outcome-based care payment models.
– Starting in 2026, TEAM will hold hospitals and health systems accountable for the entire episode of care for major surgeries, from admission through 30 days post-discharge, with the goal of reducing complications and rewarding quality.
The five surgical procedures included in TEAM—lower extremity joint replacement, spinal fusion, coronary artery bypass graft, major bowel procedures, and hip/femur fracture treatment—make up about 20% of the current annual Medicare reimbursement for mandated hospitals. Annually, Medicare pays $19.2 billion for these procedures, but the quality of outcomes varies dramatically. For example, a recent Medicare analysis found that total knee arthroplasties have a 16% complication rate, leading to an additional average spend of $812–$2,443 per procedure. The TEAM model aims to eliminate these unnecessary costs by empowering hospitals to improve care coordination and quality, ultimately resulting in better patient outcomes.
Increased Accountability and Financial Opportunity for Hospitals
In an unprecedented move, the new model will make hospitals solely responsible for coordinating and paying for entire episodes of care, increasing accountability and driving improved patient experience and outcomes. Over the course of the five-year model, select high-performing health systems can earn up to 20% in additional reimbursements, yielding more than $100 million in cost savings per system. The 742 facilities mandated to participate stand to gain a total of $3 billion in additional revenue via these incentive payments by adhering to TEAM.
“With the billions in additional incentive payments from TEAM also comes staggering requirements for the mandated hospitals and health systems. Starting next year, they will need to collect, standardize and report on patient outcomes – providing high quality care coordination and post-acute care in ways that simply can’t be done manually,” said Eddie Qureshi, CEO and Founder of Rainfall Health. “It’s clear that hospitals who can quickly adapt to AI-powered solutions will be able to better manage the volume of healthcare data collection that will be required. I’m excited about the potential that our technology at Rainfall Health can have in achieving this – all with the goal of improved patient outcomes.”
Beginning January 1, 2026, all mandated sites will oversee a patient’s care and cost from hospital admission or outpatient procedure through 30 days after the patient leaves the hospital, including coordination and communication between providers across all care settings and with the patient and family.
If you are a provider in the United States and you perform these procedures, visit this website to see if you are directly mandated to participate in TEAM on January 1, 2026.
