Earlier this year, CMS finalized the Transforming Episode Accountability Model (TEAM), a bundled payment model that will be mandatory for one in ten hospitals in the United States.¹

TEAM is paid under the Medicare Inpatient Prospective Payment System (IPPS) in 188 selected Core-Based Statistical Areas² (CBSAs). It is one of the latest value-based care (VBC) models from the Center for Medicare and Medicaid Innovation (CMMI).

TEAM is mandatory for 741 hospitals nationwide,³ and hospitals that wish to voluntarily opt in to the model may do so until the end of either their Bundled Payments for Care Improvement (BPCI) or Comprehensive Joint Replacement (CJR) models. TEAM will begin on January 1, 2026, and will run for five years.⁴

TEAM will apply to five high-volume and traditionally high-margin procedures that are done in the inpatient setting (and reimbursed via Medicare’s Inpatient Prospective Payment System). It will also apply to the outpatient setting for two of the five procedures.

Participants in TEAM will see a discount factor — similar to a rate reduction — retroactively applied to their Medicare reimbursement for almost all Medicare Part A and Part B payments associated with the five included procedures. Physician, therapist, and post-acute care services are included in the model. CMMI finalized a 1.5% discount factor for two of the procedures and a 2% discount factor for the other three⁵: