What Hospitals Need to Know About TEAM – CMS’s New Episode-Based Model | PurpleLab®

Starting January 1, 2026, the Centers for Medicare & Medicaid Services (CMS) is rolling out a major new payment model called the Transforming Episode Accountability Model, or TEAM. This program will change how hospitals get paid for certain surgeries – and it’s something hospitals need to start preparing for now.

Understanding what it is, who needs to participate and how to get ready is key,  and PurpleLab is here to help.

 

What is TEAM?

TEAM is a five-year mandatory value-based payment model designed to improve care and lower costs for patients who undergo five different surgical procedures.

Right now, Medicare generally pays hospitals and post-acute care providers separately. This fragmentation means hospitals aren’t held accountable for what happens after surgery, and can lead to poor outcomes and avoidable readmissions.

TEAM changes that by bundling payments for surgical episodes of care – meaning CMS will pay a single target price that covers not just the surgery itself, but everything that happens during and after the procedure, including follow-up care for 30 days post-discharge.

Hospitals will be held accountable for the cost and quality of care throughout the episode. Depending on performance, they may receive a bonus or face a penalty.

The goal is to make sure everyone involved in a patient’s care is working together throughout the full recovery process.

 

Who has to participate?

CMS has selected 741 hospitals to take part in TEAM, focusing on acute care hospitals in select metropolitan areas. These include:

• safety net hospitals,
• rural hospitals,
• Medicare-dependent hospitals,
• sole community hospitals
• critical access hospitals.

These hospitals were identified based on experience with bundled payment models, the number of hospitals in the region and the proportion of safety net hospitals in the region.  

If you’re one of those selected – or thinking about voluntarily opting in – it’s crucial to start planning now, since expectations around data and performance are high.

What procedures are included?

In its first year, TEAM will apply to five high-volume surgical procedures:

• Lower extremity joint replacement (LEJR)
• Surgical hip and femur fracture treatment (SHFFT)
• Spinal fusion
• Coronary artery bypass graft
• Major bowel procedure

Each of these episodes has a clearly defined beginning and end, allowing for focused coordination and measurable outcomes.

 

Why TEAM matters

TEAM represents an important shift in how hospitals are evaluated and paid. Here’s why it matters:

• Bundled payments mean more responsibility. Hospitals get a set payment for each type of surgery. If they go over budget, they may have to repay money to Medicare.
• Care quality will improve. Hospitals are judged on quality scores like readmission rates and patient safety. High-quality care could lead to bonus payments – while poor performance could result in penalties.
• Better care coordination. Hospitals will need to work closely with doctors, specialists, rehab centers and other providers to make sure care is as timely and cost-effective as possible.

In other words, TEAM requires hospitals to get serious about clinical pathways and real-time visibility into cost and quality metrics.

 

 

How PurpleLab can help

At PurpleLab, we help hospitals make sense of their data so they can prepare for models like TEAM. Our Episodes of Care (EOC) already tracks care journeys for over 200 types of procedures, and it’s ready to support hospitals with TEAM-specific needs.

Here’s how we can help:

• Pre-built and customizable episodes. We’ve already built a flexible framework that tracks every service related to a patient’s procedure, including costs and outcomes. We can quickly adjust this to match CMS’s exact rules for TEAM.
• Total visibility. Our data covers everything that happens during the episode – from surgery through recovery. We help you track costs and services across departments and providers, so nothing gets missed.
• Fast implementation. Because our EOC system is already built, we can spin up TEAM-specific solutions quickly – well before the 2026 deadline.
• Clear insights for your whole team. Whether you’re looking at budgets, managing patient flow or making sure data is captured correctly, PurpleLab gives your team the tools to succeed under TEAM.

TEAM is a big step forward in how Medicare pays for care – but it also puts more responsibility on hospitals. Getting ahead of it now means you can avoid surprises later – and even come out ahead.

PurpleLab is ready to help your team build a strategy and deliver better care at a lower cost.

Want to learn more about how PurpleLab can support your TEAM planning? Get in contact with our team today.