By Lee-Ann Ruf, Senior Vice President of Product, MDaudit
LinkedIn: Lee-Ann Ruf
LinkedIn: MDaudit
When the Centers for Medicare & Medicaid Services (CMS) launched its Transforming Episode Accountability Model (TEAM) initiative in January 2026, more than 700 hospitals across the country took another significant step toward enacting value-based care.
The five-year, episode-based payment model aims to improve the patient experience by linking hospitals’ financial incentives directly to patient outcomes and seamlessly coordinating care between providers.
TEAM initially focuses on lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedures, six common high-cost surgical procedures that together account for a significant share of Medicare’s spending. CMS estimates TEAM could generate nearly half a billion dollars in savings over five years through fewer readmissions, shorter recovery times and smoother care transitions.
For participating hospitals, the challenge extends beyond surgical excellence. Success in the TEAM program depends upon the ability to turn data into actionable insights and manage each episode of care from pre-operation through recovery.
New Expectations for Accountability
Under TEAM, hospitals will continue billing Medicare fee-for-service (FFS), but CMS will establish a target price for each procedure. If actual spending for a patient’s entire episode of care comes in below that target without compromising quality, hospitals are eligible for a reconciliation payment. If costs exceed the target, hospitals may owe CMS.
CMS plans to apply statistical and multivariate analyses to assess not only costs and outcomes, but also patient access and experience. This emphasis on accountability is an evolution in how CMS measures value. Financial responsibility and the patient experience will no longer begin and end in the operating room.
This means hospitals will have to shift from retrospective performance reporting to proactive, real-time case management. Hence, data on patients will become a catalyst for continuous improvement rather than a mere compliance requirement.
How Data Becomes an Asset
To prepare for TEAM, hospitals must begin by assessing their current analytics capabilities. Closing gaps in data, modernizing infrastructure, and establishing a unified view of cost and quality are essential steps. This means connecting data that has previously been kept separate, for example, clinical records, revenue cycle systems, post-acute care notes, and payer information.
Modern analytics platforms, including AI and machine learning tools, can identify patients at high risk of complications and suggest interventions before a patient’s condition worsens. Predictive modeling can simulate total episode costs and outcomes across different scenarios, helping hospitals plan for resource allocation and discharge more effectively.
Data interoperability is another important piece of the puzzle. EHRs, billing systems, and post-acute care partners must be able to share and interpret data consistently. Building interoperable data pipelines capable of integrating clinical, claims, and cost data in standardized formats will be foundational to success in the TEAM program.
Hospitals should assess whether their current infrastructure is ready for these requirements and if necessary, develop a roadmap for upgrading systems and workflows before TEAM goes live.
Preparing for a Value-Based Future
Hospitals that embrace TEAM as a launching pad for digital transformation can position themselves for long-term success. By establishing a robust data and analytics foundation now, they will be better prepared for future payment reforms and alternative reimbursement models.
Practical steps hospitals can take now include:
- Reviewing past bundled payment performance to identify strengths and weaknesses.
- Reaching out to post-acute and primary care partners early to better coordinate care.
- Creating real-time dashboards and testing new workflows in a “TEAM sandbox.”
- Using historical claims data to model potential gains and losses under TEAM’s pricing methods.
While analytics will be the key to success, they are only as trustworthy as the data that informs them. Strong data governance that is focused on accuracy, completeness, and timeliness is essential. But technology alone won’t be enough to excel in TEAM. Human expertise must be front and center.
Hospitals should prepare clinical, financial, and operational teams to interpret and act on insights gleaned from their data. Staff must understand how TEAM metrics are calculated and how daily actions influence overall performance. Early investment in cross-disciplinary education will help ensure data-driven thinking becomes ingrained in the hospital’s work culture.
A Foundation for Sustained Success
The TEAM program will offer 700 hospitals the opportunity to establish a strong foundation for sustained success as the next phase of value-based care takes shape. Investing in integrated data systems, robust governance, sophisticated analytics, and ongoing staff training will strengthen healthcare providers’ revenue cycle operations far beyond TEAM participation.
By using analytics to track charges, assess reimbursement trends, and forecast payments, hospitals will improve financial performance and compliance through data-driven decision-making, positioning themselves as leaders in the next era of value-based care.