Navigating CMS’s new TEAM model: A strategic guide for hospitals and health systems

Navigating CMS’s new TEAM model:
A strategic guide for hospitals and health systems

By Lisa Fry, Chief Strategy and Innovation Officer

What is the TEAM model?

The Transforming Episode Accountability Model (TEAM) is a Medicare initiative designed to encourage value-based care.

Starting January 1, 2026, acute care hospitals in selected regions will be held accountable not just for what happens during a patient’s stay, but for the quality and cost of care during the critical 30-day period following discharge.

TEAM focuses on five high-volume, high-cost surgical episodes:

Lower extremity joint replacement

Surgical hip and femur fracture treatment

Spinal fusion

Coronary artery bypass graft

Major bowel procedure

These procedures, along with their subsequent care needs, represent exactly the kind of complex cases where care coordination gaps can lead to poor patient outcomes and avoidable readmissions.

The model’s mandatory requirement affects hospitals in Core-Based Statistical Areas across the United States, with voluntary opt-in opportunities for qualifying hospitals that participated in previous bundled payment programs.

While the ultimate aim is to improve patient outcomes, the model also emphasizes collaboration, care coordination, and cost containment as critical drivers for success.

The critical 30-day window

Research consistently shows that the period immediately following hospital discharge is when patients are most vulnerable.

35-40% of hospital readmissions happen within the first 7 days

The 30-day readmission rate (nationally) has been steady at 13.5-14% in recent years

Readmission rates vary significantly by payor class and by diagnosis grouping

TEAM recognizes the implications of this time frame by extending hospital accountability for their patients’ care journey through the full 30-day post-discharge period.

This extended accountability window means hospitals can no longer rely on traditional discharge planning alone. Instead, they must develop comprehensive care coordination strategies that actively support patients through their recovery journey, especially for certain diagnosis groupings.

Four key requirements for compliance

1. Comprehensive care coordination

Success in the TEAM program necessitates hospitals to coordinate care across all settings—from the initial procedure through post-acute care services including skilled nursing facilities, home health agencies, and outpatient therapy providers.

2. Primary care connectivity

Hospitals must refer beneficiaries to primary care services as part of discharge planning. This isn’t just a handoff—it’s about ensuring seamless transitions that support long-term health outcomes.

3. Quality performance standards

TEAM incorporates quality measures focused on care coordination, patient safety, and patient-reported outcomes. Performance directly impacts financial reconciliation, with composite quality scores adjusting payment amounts by up to 15%.

4. Technology-enabled communication

Success depends on effective communication systems that coordinate care across multiple providers while keeping patients engaged throughout recovery.

Building an effective TEAM strategy

Successful TEAM participation requires a multi-faceted approach that addresses both clinical and operational challenges:

Develop extended care teams: Traditional hospital-based care teams must expand to include patient navigators, care coordinators, and virtual health clinicians who can provide ongoing support throughout the 30-day episode period.

Implement multi-channel communication systems: Patients need support through various channels—phone calls, text messaging, video consultations, and remote monitoring—matched to their individual needs and risk levels.

Create risk stratification protocols: In addition to the TEAM criteria, use clinical data and social determinants of health to identify patients at highest risk for complications, allowing for targeted interventions where they’re needed most.

Establish primary care network: Build relationships with primary care providers and ensure smooth referral processes to meet TEAM’s connectivity requirements.

Invest in data analytics: TEAM’s complex pricing methodology requires sophisticated analysis capabilities to track performance and ensure financial sustainability.

The financial reality

TEAM has graduated risk through different participation tracks to accommodate different levels of risk and reward and allow participants to ease into full-risk participation.

Track 1 provides upside-only risk for all participants in the first year, with no downside financial risk. Safety net hospitals can remain in Track 1 for up to three years.

Track 2 offers lower financial risk and reward for certain participants including safety net hospitals, rural hospitals, Medicare Dependent Hospitals, Sole Community Hospitals, and Essential Access Community Hospitals in years two through five.

Track 3 provides the highest risk and reward levels, including two-sided risk, for most participating hospitals from year two through five (optional year one).

The key to success lies in effective discharge planning, careful consideration of the most appropriate next site of care, and preventing avoidable complications and readmissions through proactive care coordination after discharge.

Preparing for implementation

With TEAM’s January 2026 start date approaching, hospital leaders need to begin preparation now. Participants have important decisions to make about track selection and operational readiness.

The most successful hospitals will be those that view TEAM not as a compliance burden, but as an opportunity to fundamentally improve patient care while achieving sustainable financial performance. This requires moving beyond traditional hospital boundaries to create integrated care experiences that support patients throughout their recovery journey.

The transition won’t be easy, but the potential benefits—improved patient outcomes, reduced readmissions, enhanced reputation, and financial rewards—make it worth the investment. More importantly, TEAM aligns with what we know patients both need and want: coordinated, comprehensive care that supports their recovery and long-term health.

SCP Health’s Connected Care solutions are specifically designed to help hospitals improve care coordination through multi-channel technology platforms, extended clinical teams, and value-based care that support patients during the 30-day period following discharge. To learn how our solutions can help your organization prepare for TEAM compliance, contact one of our team members today.

Related Resources

Enhancing the patient journey with follow-up care
Improving HCAHPS scores with a post-discharge follow-up program
Connecting patients at crossroads in care

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