The Centers for Medicare & Medicaid Services (CMS) proposed and last year finalized plans to implement the Transforming Episode Accountability Model (TEAM) in the FY 2025 Inpatient Prospective Payment System (IPPS) final rule. TEAM will be a mandatory episode-based payment model that builds upon over a decade of experience with Medicare fee-for-service (FFS) bundled payment models. While hospitals are the direct participants, the model has meaningful implications for a broader set of healthcare stakeholders — including post-acute care providers, medical device companies, and other entities that partner with or support hospitals participating in TEAM.
With the recent release of the FY 2026 IPPS proposed rule, CMS has updated and clarified several requirements ahead of its launch on January 1, 2026. Though many of these changes appear modest (e.g., technical refinements to the financial methodology), they could have significant implications for hospitals’ ability to succeed under the model.
This +Insight outlines key changes CMS is proposing, particularly related to episode pricing, quality measurement, and trend factor calculations.
For more on this topic, listen to our Health Policy Breakroom podcast, and read our Regs & Eggs blog post and key takeaways from the FY 2026 IPPS proposed rule.
