The Centers for Medicare and Medicaid Services (CMS) announced several proposed changes to the Transforming Episode Accountability Model (TEAM) in the fiscal year 2026 Inpatient Prospective Payment System (IPPS) proposed rule, released April 11.

Slated to begin Jan. 1, 2026, TEAM would require all acute care hospitals located within the CMS-selected Core-Based Statistical Areas to participate by testing episode-based payments for CABG and several other orthopedic and surgical procedures, including lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion and major bowel procedure.

Currently, there are 735 mandatory and 10 voluntary hospitals set to participate in the model. Participating hospitals would receive a target price to cover all costs associated with a 30-day episode of care and be required to refer patients to primary care services to support continuity of care and drive positive long-term health outcomes.

Changes introduced by the IPPS proposed rule include:

• Establishing participation rules for new and reorganized hospitals within the CMS-selected Core-Based Statistical Areas.
• Adding the Information Transfer Patient Reported Outcome-Based Performance Measure (Information Transfer PRO-PM).
• Applying a neutral quality measure score for TEAM participants with insufficient quality data.
• Using a 180-day lookback period and Hierarchical Condition Categories (HCC) version 28 for beneficiary risk adjustment.
• Removing Health Equity and the Decarbonization and Resilience Initiative components of the model.

In addition to these proposed policies, CMS is also seeking comments regarding low volume hospitals and the primary care services referral requirement.

For more information, access the full text of the proposed rule, the IPPS press release and IPPS fact sheet.

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