FY26 IPPS Policy Update: What’s Changing Under the TEAM Mandate?
- SolvEdge
- May 23, 2025
- 6 mins read
With the FY26 Inpatient Prospective Payment System (IPPS) update, CMS is setting the stage for one of the most transformative compliance overhauls in recent history—the implementation of the TEAM (Transforming Episode Accountability Model) Mandate.
Here’s what’s new in FY26—and what healthcare leaders must do to navigate the policy shift with confidence.
Understanding the TEAM-IPPS Connection
The FY26 IPPS final rule positions TEAM as a key pillar in CMS’s strategy to:
- Strengthen episode-based accountability
From historical lookbacks to encounter-specific validation
- Improve documentation integrity
- Enhance equity through Social Determinants of Health (SDoH) capture
TEAM is not optional. It’s being embedded into payment models, compliance workflows, and quality reporting frameworks under IPPS.
The TEAM Mandate is CMS’s blueprint for linking condition-specific care episodes with performance-based reimbursement—IPPS is the enforcement vehicle.
FY26 IPPS Policy Updates Tied to TEAM
Here’s a step-by-step playbook:
Mandatory Participation in Episode-Based Bundles
At least 5 new condition-specific bundles (e.g., CHF, COPD, Joint Replacement) will be mandatory
No opt-out for selected hospital systems in pilot MSAs
New Documentation and Coding Requirements
TEAM requires bundle-specific diagnosis clustering
Real-time coding feedback expected via certified tools
Hospitals must meet clinical documentation improvement (CDI) thresholds tied to bundle logic
Expanded Quality Reporting Metrics
Integration of patient-reported outcome measures (PROMs) into quality dashboards
Risk-adjusted outcomes tied directly to MS-DRG reimbursement modifiers
Incentives and Penalties
Positive payment adjustments for TEAM-compliant bundle performance
Penalties for hospitals with high denial rates, poor episode attribution, or low SDoH data capture
The Financial Impact of TEAM Under IPPS
TEAM introduces revenue volatility for organizations unprepared to meet the episode-level expectations of CMS.
| Financial Risk Area | Impact | Strategy |
|---|---|---|
| MS-DRG Bundles | Shift from volume to outcome-based payment | Episode-level cost and outcome forecasting |
| Denials | Higher audit risk for coding inconsistencies | Invest in CDI and coding QA tools |
| Readmissions | Now linked to episode bundles, not general diagnosis | Proactive care coordination post-discharge |
| Risk Adjustment | Tied to real-time HCC scoring within bundles | Integrate AI-based HCC crosswalk tools |
Operational Shifts Hospitals Must Make in FY26
Required Adjustments:
- Upgrade to TEAM-compliant documentation workflows
- Deploy HCC crosswalk logic into inpatient EHRs
- Ensure CDI teams are trained on bundle-specific coding
- Build PROMs collection pathways into patient engagement systems
- Integrate SDoH data collection into intake and discharge planning
SolvEdge Insight – Preparing You for FY26 Compliance
SolvEdge helps hospital systems transition smoothly by offering:
- TEAM-compliant documentation modules
- Real-time bundle analytics with denial prevention tools
- AI-powered HCC crosswalk and episode tagging
- PROM and SDoH integration across the patient journey
- Compliance dashboards for CMS audit readiness
SolvEdge turns TEAM’s complexity into operational clarity.
SolvEdge Insight – Preparing You for FY26 Compliance
Before TEAM enforcement begins, ensure your organization can check these boxes:
- We’ve identified all TEAM-impacted clinical episodes
- We’ve trained CDI and coding staff on new documentation rules
- Our risk capture model aligns with real-time TEAM scoring
- PROMs and SDoH data are actively collected and analyzed
- We have audit-ready reporting aligned with IPPS TEAM indicators
From Policy to Practice—TEAM is Here
The FY26 IPPS update isn’t just a payment adjustment—it’s the activation point for TEAM’s widespread impact on hospital strategy. By aligning clinical, financial, and compliance systems to this mandate, hospital leaders can protect revenue, improve outcomes, and lead confidently into a value-based future..
Don’t let data gaps derail your compliance.
Schedule a free TEAM Infrastructure Readiness Review with SolvEdge and see how our platform closes the compliance loop
