FAQ webinar recap: Structuring smart sharing arrangements under the CMS TEAM Model

A must-watch DataGen and Nixon Peabody joint webinar

The CMS TEAM model introduces mandatory episode-based accountability for hospitals that began on Jan. 1. One complex aspect of the model is structuring sharing relationships.

In this FAQ recap of TEAM up for 2026: Structuring smart sharing arrangements, DataGen's Alyssa Dahl, Vice President, Advanced Analytics, and Nixon Peabody's Whitney Phelps, Partner, break down how TEAM sharing and distribution arrangements work, what hospitals can and cannot do under federal and state law and how data, governance and partner strategy come together to support success under TEAM.

How do payments under CMS’ TEAM work?

Under TEAM, hospitals and all providers delivering care during a 30-day episode continue to be paid through traditional Medicare fee-for-service. The hospital that initiated the episode of care is considered the TEAM participant and will bear responsibility for care coordination and accountability for financial results under the model. CMS will reconcile total Medicare episode spend in comparison to a regionally-based target price after each performance year ends.

• Below target: Hospitals receive a reconciliation payment from CMS.
• Above target: Hospitals owe a repayment to CMS.

Similar to prior models, TEAM allows hospitals to share gains — and in some cases losses — with collaborators, creating new opportunities for alignment across the continuum of care.

It is important to note that TEAM participants are not required to share gains and/or losses.

What are sharing arrangements in TEAM?

CMS allows TEAM participant hospitals to enter financial sharing arrangements, directly and indirectly, with accountable care organizations (ACOs) and other providers or suppliers (known as TEAM collaborators) involved in the episode of care. Examples of TEAM collaborators include skilled nursing facilities, home health agencies, physicians, group practices and ACOs. TEAM collaborators must be a Medicare enrolled provider and must play a role in the hospital’s TEAM performance.

Team collaborators also may enter distribution arrangements with collaboration agents (e.g., ACO participants or group practices) and those collaboration agents may enter into downstream distribution agreements with downstream collaboration agents (e.g., individual physicians and licensed providers employed with a collaboration agent).

These arrangements are designed to align financial incentives across collaborators participating in TEAM activities in a concerted effort to reduce care fragmentation, increase coordination and improve beneficiary care transitions.

CMS will track all financial arrangements established under TEAM, which requires the TEAM participant hospital to submit to CMS a list of all entities and individuals in which they have a financial arrangement. This list can be updated quarterly.

Are fraud and abuse laws waived under TEAM?

No, fraud and abuse laws are not waived under TEAM. This means hospitals must remain compliant with the:

• Stark law;
• anti-kickback statute;
• civil monetary penalties law; and
• applicable state fraud and abuse regulations.

However, TEAM arrangements are intended to fit within existing CMS-sponsored model safe harbors, provided hospitals meet strict regulatory and contractual requirements.

What types of financial arrangements are allowed under TEAM?

TEAM permits three types of arrangements: sharing, distribution and downstream distribution. All arrangements must be executed in writing before any impacted episode of care begins.

1. Sharing arrangements

• Agreements between the participating TEAM hospital and TEAM collaborators that may include upside gainsharing and downside alignment payments.

2. Distribution arrangements

• Agreements between TEAM collaborators that are ACOs or group practices to distribute gainsharing payments received with collaboration agents.

3. Downstream distribution arrangements

• Agreements for a collaboration agent that is both a group practice and an ACO participant, used to further distribute distribution payments to downstream collaboration agents.

How much financial risk can hospitals share with TEAM collaborators?

CMS places certain restrictions on alignment and gainsharing payments:

• paid out no more than once per year;
• must be derived from a CMS reconciliation payment or internal cost savings;
• gainshare payments must be clearly identified as a “gainsharing payment” on the transaction;
• aggregate alignment payments have limits:
  • ACOs: up to 50% of the hospital’s repayment obligation; and
  • Non-ACOs: up to 25% of the hospital’s repayment obligation.

How should hospitals select TEAM collaborators?

If a participating TEAM hospital seeks to enter into a sharing arrangement, when evaluating providers or suppliers to be TEAM collaborators the hospital should consider:

• quality performance (readmissions, fall rates, patient experience);
• experience and minimum number of services standards;
• compliance checks (Medicare enrollment, exclusion lists); and
• participation in care coordination and TEAM activities.

Importantly, hospitals cannot require referral volume as a condition of participation.

The participating TEAM hospital must execute a written sharing arrangement with the provider identified as a TEAM collaborator. This agreement must be executed prior to any episode of care being covered under the sharing arrangement.

What role does data analytics play in CMS TEAM success?

Advanced analytics are foundational to TEAM readiness. Hospitals must be able to:

• analyze historic care patterns in comparison to the region and targets;
• identify efficient/inefficient downstream providers;
• evaluate quality and readmission trends; and
• monitor collaborator performance over time.

Access to episode and claim-level CMS data enables hospitals to identify providers that are best positioned to improve outcomes and manage risk under TEAM.

Are ACOs allowed to participate in TEAM?

Yes. CMS allows hospitals to work with Medicare ACOs under TEAM. Participation in TEAM does not exclude providers from participating in other CMS value-based programs.

This flexibility allows hospitals to align incentives across multiple value-based care initiatives.

What compliance steps should hospitals take now?

To prepare for TEAM, hospitals should:

• update compliance programs to include oversight of TEAM sharing arrangements;
• execute sharing arrangement that include audit and recoupment rights;
• implement data-sharing and business associate agreements as needed; and
• plan for public disclosure of TEAM collaborators.

If a hospital opts to participate in a sharing arrangement, early planning is critical, as all arrangements must be in place before episodes begin.

How should hospitals think about TEAM beyond Medicare fee-for-service?

Hospitals should consider whether TEAM-style arrangements could extend to:

• Medicare Advantage;
• commercial payers; and
• other risk-based contracts.

Drafting agreements with future scalability in mind can reduce administrative burden and support long-term value-based care strategies.

Final takeaway: Positioning for CMS TEAM success

The CMS TEAM model represents a major shift in how hospitals are held accountable for episode-based care. Success in TEAM requires more than cost control. It demands data-driven decision-making, strong clinical partnerships to meet quality metrics and compliant financial alignment.

Hospitals that invest early in analytics, governance and collaborator strategy will be best positioned to thrive under CMS TEAM and future value-based payment models. Learn how you can turn your episode data into strategy.