The Transforming Episode Accountability Model (TEAM) completes its first half-year of performance year one on July 1, 2026. For the 740-plus acute care hospitals required to participate, the model’s upside-only period has provided an early look at episode-level performance data and a runway to prepare for mandatory downside risk beginning on January 1, 2027.
That date has been on the horizon for some time. For many hospital leadership teams, TEAM has been one item on a long list of policy pressures that includes Medicaid reimbursement and coverage reductions, site-neutral payment, and 340B, each carrying significant financial weight. TEAM has felt manageable by comparison, and for hospitals where applicable surgical episodes represent a modest share of total volume, this may have been a reasonable assessment.
That calculus is changing, though, as signals from CMS and the current administration point to TEAM as the first move toward mandatory bundled payment expansion.
CMS Is Signaling Continued Momentum on Mandatory Bundled Payments
In early 2026, CMS announced the Comprehensive Joint Replacement Expanded model (CJR-X), a mandatory bundled payment program covering all lower extremity joint replacement procedures nationally. Lower extremity joint replacement is one of TEAM’s five covered episodes, and it is now also subject to mandatory bundled accountability for every eligible hospital in the country, beyond those in TEAM’s selected Core-Based Statistical Areas. The coexistence of TEAM and CJR-X signals that CMS’ commitment to mandatory episode-based accountability is a durable policy direction, not contingent on the trajectory of any single model.
While CMS did not add clinical conditions to TEAM in this year’s rulemaking cycle, CJR-X is evidence that when CMS identifies a high-volume, high-cost episode amenable to bundled accountability, it is prepared to scale that accountability nationally and make it mandatory from the outset.
CARA Extends the Construct Beyond Mandatory Programs
The CMS-Administered Risk Arrangements (CARA) framework, introduced under the Long-term Enhanced ACO Design (LEAD) Model, represents a second, distinct signal. CARA creates standardized, scalable infrastructure for episode-based risk within the ACO structure on a voluntary basis. Specialty care episodes that may not be in TEAM today, including high-volume medical conditions, are candidates for episode accountability under CARA.
Taken together, TEAM, CJR-X, and CARA represent three expressions of the same policy logic: episode-level variation must be managed, post-acute spending must be accountable, and the construct for doing so is now taking mandatory, scaled mandatory, and voluntary embedded forms across the Medicare payment landscape.
The Post-Acute Network Is a Key Variable in TEAM Performance
Most hospitals maintain post-acute care relationships that function adequately under fee-for-service reimbursement. Bundled payment accountability, however, imposes a distinct set of performance criteria to determine:
- Whether preferred partners demonstrably reduce downstream utilization;
- Whether network coverage sufficiently manages discharge patterns across an episode’s 30-day window; and
- Where episode spending is concentrated.
TEAM’s rigorous performance reporting requirements enable hospitals to deepen their understanding of the quality of care being delivered by their post-acute partners, creating new opportunities to evaluate existing relationships, grow the network, and improve performance. How hospitals leverage these data will differentiate performance under TEAM.
TEAM Participants Face a Narrowing Window
Performance Year 2 begins January 1, 2027, and the organizations preparing now will be best positioned for success. The second half of 2026 is a critical window for assessing episode-level performance, evaluating post-acute network effectiveness, and making operational adjustments before downside risk becomes real.
For hospital and health system leadership working through these questions, ATI Advisory welcomes the conversation.