Navigating the CMS TEAM Model FY2026 Final Rule: Key Insights for Healthcare Providers
- SolvEdge
- 6 mins read
In the rapidly changing world of healthcare payment models, understanding the latest updates from the Centers for Medicare & Medicaid Services (CMS) is essential for hospitals and health systems looking to optimize care delivery and financial performance. The final rule for the Transforming Episode Accountability Model (TEAM) for FY2026 marks a significant step forward in bundled payments, aiming to enhance coordination and efficiency across episodes of care. At SolvEdge, we specialize in helping providers navigate these complexities with practical strategies. In this blog, we’ll unpack the core elements of the TEAM final rule, highlight its implications, and offer actionable guidance to prepare your organization—drawing on our expertise to deliver value without the jargon overload.
Understanding the TEAM Model: A Quick Overview
TEAM is a mandatory, episode-based payment model set to run from January 2026 through December 2030. It focuses on five major surgical categories: lower extremity joint replacements, spinal fusions, hip and femur procedures (excluding major joints), major bowel surgeries, and coronary artery bypass grafts. Building on prior CMS programs like CJR and BPCI Advanced, TEAM encourages integrated care from hospitalization through post-acute recovery, with the goal of reducing unnecessary costs while maintaining quality.
The final rule confirms most of the initial proposals, projecting substantial savings for Medicare—around $368 million over the model’s duration. For healthcare leaders, this isn’t just about compliance; it’s an opportunity to refine operations, foster collaborations, and potentially share in savings. By emphasizing value over volume, TEAM pushes providers toward data-driven decisions that can improve patient outcomes and streamline workflows.
Breaking Down the Final Rule's Core Updates
CMS has incorporated feedback to make TEAM more practical and less administratively intensive. Here’s a distilled look at the key changes, designed to help you assess their fit for your facility:
- Mandatory Participation and Exemptions: The model applies to acute care hospitals in designated areas, with options for low-volume providers (fewer than 31 episodes per category) to avoid downside risk. New hospitals can request deferrals, providing breathing room for emerging facilities. This structure supports smaller or specialized providers in gradually adopting bundled payments, minimizing disruption.
- Enhanced Quality Metrics: CMS introduces measures like the Hybrid Hospital-Wide Readmission (HWR) rate, initially relying on claims data for simplicity. From year three, patient-reported outcome measures (PRO-PMs) will come into play, with neutral scoring for incomplete data to ease reporting burdens. These shifts highlight the need for strong analytics to monitor readmissions and patient feedback, turning potential challenges into levers for quality improvement.
- Refined Pricing and Adjustments: Pricing is now regionalized and adjusted for procedure codes, with a 180-day lookback for risk factors using the updated HCC Version 28. The switch to a Community Deprivation Index better captures socioeconomic influences, ensuring equitable benchmarking. These tweaks aim to create a fairer playing field, rewarding efficient care without penalizing complex cases
- Operational Efficiencies: To reduce overhead, CMS eliminated requirements for health equity reporting and simplified waivers for skilled nursing facility stays. Beneficiary choice in referrals remains protected, aligning with patient-centered trends. Overall, these adjustments cut red tape, allowing teams to prioritize clinical excellence over paperwork.
From our work at SolvEdge, we’ve observed that providers who proactively address these elements—such as through targeted care pathways—can achieve cost reductions of 10-20% per episode. It’s about seeing TEAM not as a mandate, but as a framework for sustainable growth.
Strategic Preparation: Turning Insights into Action
With the final rule in place, preparation is your best defense against risks and pathway to rewards. Here are insightful steps tailored for healthcare executives and clinicians:
- Evaluate Your Data Foundation: Start by analyzing past episode performance to pinpoint inefficiencies. Advanced tools for predictive modeling can simulate TEAM scenarios, helping you forecast financial impacts and identify quick wins like optimized discharge protocols.
- Strengthen Care Networks: Collaborate with surgeons, rehabilitation specialists, and community providers to build seamless care transitions. In our experience, these partnerships not only lower readmission rates but also enhance referral volumes, creating a virtuous cycle of trust and efficiency
- Leverage Technology for Compliance and Beyond: Invest in integrated platforms that handle data sharing, quality tracking, and risk adjustment. SolvEdge’s customized solutions have helped clients automate these processes, freeing up resources for innovation rather than administration.
- Focus on Patient-Centric Outcomes: Emphasize PRO-PMs early by incorporating patient feedback loops. This not only boosts scores but also drives loyalty, as satisfied patients become advocates in a competitive landscape
By implementing these strategies, providers can mitigate downside risks (up to 20% in later years) while positioning for shared savings. Remember, success in TEAM hinges on agility—regularly reviewing performance data to adapt as needed.
How SolvEdge Can Elevate Your TEAM Strategy
At SolvEdge, we’re more than consultants; we’re partners in transforming healthcare delivery. Our deep dive into models like TEAM equips providers with bespoke plans that align with your unique goals, from cost containment to quality enhancement. Whether you’re refining existing processes or starting fresh, our team delivers measurable results, backed by proven methodologies.
Curious about your readiness for TEAM? Reach out to SolvEdge for a no-obligation consultation. Let’s collaborate to make FY2026 a milestone of success for your organization.
