TEAM: CMS Releases the Most Significant Mandatory Bundled Payment Model to Date

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AUTHOR – ATI Advisory


ATI Advisory CEO Anne Tumlinson and Brian Fuller, Managing Director of ATI’s Value-Based Care Design and Delivery Practice, presented an overview of the Transforming Episode Accountability Model (TEAM), CMMI’s new mandatory five-year, episode-based alternative payment model. The release of this model comes as part of a broader push to move 100% of Medicare beneficiaries into value-based care models by 2030. The CY 2025 Inpatient Prospective Payment System (IPPS) Proposed Rule outlines a 30-day episode bundled payment model, with five major surgical procedures as initial targets.  

Key Components of TEAM   

  1. Who participates in TEAM?: Unlike previous voluntary models, this program mandates participation for acute care hospitals within selected Core-Based Statistical Areas (CBSAs). Participation offers hospitals an opportunity to harness savings, invest in care coordination, and build high-quality care networks. It serves as a gateway to expanding value-based care initiatives and payer relationships. 
  1. Which beneficiaries are included?: Beneficiaries must meet five criteria at the start of an episode to be eligible for inclusion in TEAM.  
  1. What are the episodes?: The initial focus includes high-cost, high-volume surgical procedures: Lower Extremity Joint Replacement (LEJR), Coronary Artery Bypass Graft (CABG), Major Bowel Surgery, Surgical Hip/Femur Fracture Treatment (SHFFT), and Spinal Fusion. 
  1. What is the episode duration?: The model spans 30 days, covering the acute care hospital setting and the post-discharge period, with a retrospective payment approach. 
  1. What costs are included in an episode?: All Medicare Part A and Part B costs including inpatient hospital services (including readmissions), clinical laboratory services, physician services, durable medical equipment and primary care, medications, outpatient therapy services, skilled nursing facilities, hospice, and home health services. The model excludes hospital admissions and readmissions for specific categories of diagnoses (e.g., oncology, trauma medical admissions). 
  1. Model Implementation: Fuller also highlighted broader Model implementation details. The Model is set to begin January 1, 2026, with three risk tracks available to different types of participants. TEAM couples the 3% discount factor with additional adjustments, similar to past CMMI models. Payment is linked to quality measures, with a composite quality score influencing financial incentives. TEAM will also include a broadly-defined beneficiary “social risk adjustment.”  


With support from CMS, hospitals will need to reduce costs on high-cost episodes and could achieve significant shared savings under TEAM. Hospitals will need to build high-quality networks and continue the business and operational transition to value-based care. Hospitals will need to understand value-based contract design, identify savings opportunities and benchmarks, and optimize post-acute care networks.

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