CMS TEAM is here: Are hospitals ready to manage episode risk?

The CMS Transforming Episode Accountability Model (TEAM) officially launched on Jan.1. Hospitals in selected Core-based Statistical Areas are accountable for episode costs and quality for defined surgical procedures — from the procedure itself through 30 days post-discharge.

After the first month of performance under TEAM, it’s clear: knowing what the model “is” is no longer enough. Real success depends on operationalizing data, tracking episodes and managing risk before reconciliation.

Post-launch insights: What hospitals are learning

1. Episode accountability extends beyond hospital walls

Under TEAM, hospitals are financially accountable for all Medicare care costs during an episode, including post-acute services delivered by skilled nursing facilities (SNFs), home health providers or outpatient clinics.

Hospitals remain financially accountable for emergency department visits, readmissions, post-acute care and other professional services which can drive episodes over target prices if discharge planning and the transition to the next setting of care aren’t closely monitored.

2. Billing accuracy is now strategic

Risk adjustment in CMS TEAM can directly affect final target prices and subsequent reconciliation outcomes. Two categories of risk adjustment in TEAM are derived from claims data, making coding accuracy so important. These are:

• DRG MCC/CC assignment for the anchor inpatient hospitalization: Appropriate coding for complications and comorbidities (CC) and major complications and comorbidities (MCC) during the patient’s hospital stay is not only important for revenue cycle management but is the most significant target adjustment within TEAM that a hospital can control.
• All diagnoses in the six months preceding the episode start date: As a measure of clinical complexity, CMS will evaluate hierarchal condition categories derived from claims diagnoses flagged for TEAM patients in the six months preceding the episode start date. For this component, appropriate coding of all diagnostic conditions during annual wellness visits and during surgical preoperative visits for planned procedures can help improve accurate risk adjustment.
  
  

3. Data should be evaluated across the continuum of care

By using data evaluated across the continuum of care, you can make better informed decisions about care delivery and create alignments with downstream care providers. When changes or interventions are implemented, these data will help hospitals understand if they are working as intended and evaluate both cost and quality outcomes.

4. Quality and cost must be aligned

CMS TEAM links financial performance to quality metrics as a requirement for all advanced alternative payment models. Poor quality measure performance in TEAM can limit potential savings, whereas high quality measure performance in TEAM can reduce potential losses.

Early pitfalls post-launch

Even with preparation, hospitals may encounter some initial challenges under CMS TEAM. Analyses by the American College of Surgeons anticipate that up to two-thirds of participating hospitals may lose revenue under TEAM. This reinforces how critical it is to understand the model’s cost mechanics and manage performance proactively. Some initial CMS TEAM challenges have included:

• potential misattribution of episodes impacting beneficiary notification requirements;

• uncertainty compiling financial arrangement lists and clinical engagement lists;

• handling of delayed and then recalled CMS baseline data; and

• implementation of primary care referral requirements and documentation.

These gaps highlight the need for operational workflows to implement TEAM and analytics to monitor progress throughout the performance year.

How DataGen supports hospitals under TEAM

DataGen’s TEAM solution translates CMS policy into actionable hospital-level insights:

• Episode construction and validation: Ensure correct attribution and identify high-risk episodes early.

• Spend and utilization analytics: Track episode costs and post-discharge utilization trends.

• Quality and financial alignment: Connect clinical outcomes to financial performance.

• Reconciliation forecasting: Model potential upside or downside before CMS reconciliation with predictive episode target prices.

• Benchmark comparisons: Identify opportunities for potential care delivery improvement to beat the regional CMS TEAM target price.

Bottom line: How to succeed and stay ahead of TEAM

Hospitals that do not use their CMS TEAM data effectively will struggle to control costs to Medicare and performance. Those that integrate performance data, predictive analytics and operational workflows may be able to transform TEAM from a compliance obligation into a strategic advantage.

DataGen’s TEAM solution helps hospitals bridge the gap from CMS policy to actionable performance, ensuring teams are prepared, well-informed and responsive under TEAM. Download our dedicated guides to help you navigate the model:

• CMS TEAM hospital success guide: A deep dive into translating complex episode data into a clear, actionable strategy your leadership can execute with confidence.
• TEAM model implementation checklist: A step-by-step readiness framework to help hospitals identify risks, align stakeholders and prepare for 2026 performance accountability.