Subtle modifications have never been a hallmark of the Centers for Medicare & Medicaid Services (CMS). It causes disturbances when it moves. This time, it is implementing a mandated, countrywide bundled payment model that is already creating a lot of excitement and conflict among post-acute providers and hospitals. The Transforming Episode Accountability Model, or CMS TEAM Model, is a revolutionary change in the way Medicare pays for and provides care. It is not a choice. Its scope is not constrained. It is completely redefining accountability.
Thinking, what is CMS Team Model? Well, under five crucial conditions, the model binds providers to a 30-day, episode-based financial risk program. This is a shift in clinical processes, quality metrics, and the need to do more with less, but it is not simply about money. The goal, scope, and scale are all very clear: force providers to take more aggressive measures to control costs and outcomes, or face the financial consequences.
Five Episodes, One Model, Zero Room for Error
CMS is not taking a tentative approach to reform. It is going all out, introducing the TEAM Model in five specific clinical episodes:
- Acute Myocardial Infarction (AMI)
- Congestive Heart Failure (CHF)
- Pneumonia
- Surgical Hip/Femur Fracture Treatment (SHNF)
- Lower Extremity Joint Replacement (LEJR)
Every episode lasts 30 days and starts with a hospital discharge. Regardless of the care site or provider, the originating hospital is responsible for the whole episode window’s cost of treatment, from inpatient to post-acute. This implies that downstream providers such as SNFs, HHAs, and IRFs are essentially operating under the first acute care hospital’s financial shadow.
Mandatory Participation No Opt-Out Clause
CMS will choose 25% of Metropolitan Statistical Areas (MSAs) at random to use the TEAM Model starting in January 2026. There will be no other option for hospitals in certain places. This is a stark contrast to previous bundled payment programs, which were mostly voluntary or limited in scope.
Implications of Mandatory Rollout:
- Providers cannot decide to remain silent.
- Preparing financially and operationally is a must.
- Health systems need to begin evaluating post-acute relationships, risk, and cost variance immediately.
A New Benchmarking Method: Fair or Flawed?
Additionally, CMS is redefining benchmarking. The TEAM Model suggests a regional benchmark technique that would put more expensive providers or those in underserved regions at a disadvantage, as opposed to BPCI Advanced’s combination of peer comparisons and historical performance.
Benchmarking Factors Include:
Average episode expenses by area throughout time
- Adapting risk for clinical complexity
- Metrics for quality performance
- Standardization by geography to eliminate biases in wage indexes
High-cost areas find it more difficult to sustain margins under this paradigm, which forces them to find clinical savings that many have not yet mastered.
Quality Metrics That Matter
Reaching satisfaction goals and preventing readmissions are no longer sufficient. In three main areas, CMS will directly link remuneration to performance:
| Metric Area | Key Focus |
| Readmissions | 30-day unplanned readmissions |
| Mortality Rates | All-cause within 30 days of discharge |
| Patient Safety & Access | Based on HCAHPS and clinical complication reporting |
Even if their episode expenditure is below goal, hospitals that score poorly on these might experience a decrease in their reconciliation payments.
Payment Reconciliation: It’s Not What You Earn, It’s What You Save
For every episode, the model compares actual costs to the benchmark aim using retrospective reconciliation. Hospitals might receive incentive payments if they achieve quality standards while spending less. They will have to repay the money if they spend more or do not get the quality.
Reconciliation Basics:
Quarterly computations
- Modified by quality ratings
- Includes post-acute providers’ shared accountability.
- Eliminates outliers by using the cap criteria.
It is increasingly necessary for hospitals to monitor and oversee care long after release, particularly during SNF, HHA, or IRF transitions, as any inefficiencies in that continuum have an impact on their own finances.
Post-Acute Care: Under the Microscope
One significant component of the cost equation is post-acute expenditure. SNFs and HHAs are now under scrutiny from hospitals that rely on their effectiveness to thrive under this paradigm, in addition to CMS. Anticipate:
- Networks of preferred providers to strengthen
- Monitoring of referral leaks to rise
- Data exchange across acute and post-acute environments will be required.
Hospitals will probably gravitate toward Digital Health Platforms that offer real-time insight into readmission risk, medication adherence, and post-acute outcomes. Without it, it is hard to manage care across environments.
Winners and Losers: What Will Separate the Two
The TEAM Model will work well for some organizations. Others will suffer or incur losses. What makes them different?
Strong Governance Models
Hospitals will have a significant edge if they include clinical and financial leadership in episode planning and decision-making. In a bundled world, financial, quality, and care delivery silos cannot endure.
Deep Data Integration
The infrastructures of digital health platforms that provide a 360-degree perspective of patient journeys will be crucial to the winners. Real-time data is essential for risk grading and care transfers.
Aligned Post-Acute Networks
A post-acute care network alone is insufficient. That network has to be performance-managed, responsible, and integrated. Real-time reporting on expenses, duration of stay, and results is essential for hospitals.
Early Risk Identification
Identifying high-risk patients before discharge using AI-powered data will distinguish proactive teams from reactive ones.
Compliance and Oversight: Prepare for More Scrutiny
CMS has said unequivocally that hospitals will be held responsible for both their actions and the outcomes that follow a patient’s departure. Anticipate more regulatory monitoring in:
- Coding integrity
- Data reporting accuracy
- Referral tracking
- Episode integrity audits
There is pressure. You can no longer hide behind loudness. Value has teeth now.
Strategic Timeline: When You Need to Act
| Date | Milestone |
| Mid-2025 | MSA Selection Announced |
| Late 2025 | Participant Notification Begins |
| January 2026 | First Performance Year Starts |
| Quarterly (2026-2028) | Payment Reconciliations Conducted |
By Q4 2025 at the latest, hospitals must make investments in technology enablement and care coordination methods.
Is CMS TEAM Just Another Model?
No. It is not a choice. It is not a theory. It is the most radical change since the implementation of DRGs due to its breadth, magnitude, and financial risk. It transforms what was formerly experimental (such as CJR or BPCI) into a national policy that is required. And that brings with it both opportunity and risk. The takeaway for hospitals is straightforward: Act now or suffer the consequences later.
Why Persivia Stands Out
Persivia provides a demonstrated benefit for clinicians negotiating this difficult shift. Its unified Digital Health Platform combines risk scoring, real-time analytics, AI-driven care management, and smooth data aggregation throughout the care continuum. Hospitals and post-acute providers can use it to align clinical workflows with TEAM Model compliance without sacrificing effectiveness or results.