In January 2026, the Centers for Medicare & Medicaid Services (CMS) will launch the Transforming Episode Accountability Model (TEAM), requiring many hospitals to participate in bundled payment programs for select surgical episodes.
This is more than a reimbursement change, it’s a readiness test for value-based care. TEAM will challenge hospitals to achieve tighter financial, clinical, and operational coordination. For organizations still relying on outdated analytics or siloed reporting systems, the model will quickly expose capability gaps.
This article views TEAM as a catalyst for accelerating value-based maturity, exploring how MedInsight Bundles can help hospitals move beyond compliance to gain a competitive edge.
The policy shift: Why TEAM matters
CMS has set an ambitious goal: enroll all Medicare beneficiaries in value-based care arrangements by 2030. TEAM is a critical step toward that vision, making bundled payments mandatory in 188 Core-Based Statistical Areas across five common surgical episodes:
- Lower extremity joint replacement
- Coronary artery bypass grafting
- Surgical hip femur fracture treatment
- Spinal fusion
- Major bowel procedures
Unlike earlier programs such as BPCI Advanced that were voluntary, TEAM mandates participation for selected hospitals starting January 1, 2026. The first year is a ramp-up period, with potential financial rewards but the ability to avoid penalties, followed by full risk exposure in 2027.
Key aspects of TEAM include:
- Shorter episode window: 30 days post-discharge instead of the longer periods used in past models
- Integrated quality measures: Patient safety, readmissions, and patient-reported outcomes, stratified by health equity factors
- Downside penalties: Applied for poor performance starting in year two
Why this matters: Hospitals must master rapid coordination, real-time monitoring, and precise financial analysis to thrive under TEAM. Past success in voluntary bundles won’t guarantee readiness.
The readiness gap
Many hospitals will enter TEAM without the systems or processes needed to excel. Common pitfalls include:
- Financial blind spots: Without episode-level visibility, losses remain hidden until reconciliation
- Unidentified cost drivers: Legacy reports often miss high-cost services or providers within an episode
- Quality measure gaps: Delayed monitoring can trigger unexpected penalties
- Settlement errors: Inaccurate auditing can lead to payment discrepancies
- Care variation: Lack of standardized metrics allows inefficiencies to persist
These challenges are amplified by the need to coordinate across post-acute providers, ACOs, and clinical networks, each with its own data silos and reporting standards.
Example: A hospital with strong inpatient outcomes for joint replacement might still lose margin due to expensive post-acute rehab stays. Without integrated episode-level analytics, that cost driver could remain invisible until CMS reconciliation, when it’s too late to intervene.
From challenges to opportunity
TEAM’s mandatory nature forces hospitals to act quickly, but it also creates a rare window to modernize analytics, align care teams, and strengthen value-based capabilities before penalties begin.
The ramp-up year in 2026 is a strategic advantage: organizations can test, refine, and standardize workflows without financial downside, if they start prepping now.
Milliman MedInsight Bundles: Purpose-built for TEAM
Milliman MedInsight Bundles is a reporting and analytics application designed to meet the complexity of bundled payment programs like TEAM. It integrates claims data, applies CMS episode definitions, and delivers actionable insights into cost, utilization, and quality.
How Milliman MedInsight Bundles addresses TEAM’s demands:
- Financial performance analysis: See profitability at the episode level and target improvements before penalties hit
- Cost driver identification: Pinpoint high-cost services, providers, or phases of care for intervention
- Real-time quality tracking: Monitor required metrics to prevent penalties and improve outcomes
- Settlement auditing: Validate reconciliation reports for payment accuracy
- Variation analysis: Benchmark provider performance and standardize care pathways
Differentiators:
- Replicates CMS logic for accurate modeling and forecasting
- Flexible, self-service visualization for cross-team collaboration
- Developed by experts with over a decade in bundled payment programs, including a former CMS program designer
- Anticipates evolving reimbursement trends with adaptable analytics
Why acting early matters
With less than 1 month until TEAM’s launch, hospitals must move from awareness to action. Preparation isn’t just about meeting compliance requirements, it’s about building the agility to manage financial risk, improve quality, and lead in the value-based care era.
Early adopters will:
- Identify and address cost drivers before penalties begin
- Build care coordination protocols that improve efficiency
- Gain experience with equity-based quality measures
- Strengthen data integration across the care continuum
From compliance to competitive edge
TEAM is a catalyst. Hospitals that see it only as a reporting requirement will risk falling behind. Those that treat it as a driver of transformation will enter 2027 with stronger margins, higher quality scores, and a proven playbook for success.
Milliman MedInsight Bundles equips organizations to navigate TEAM with precision: integrating data, benchmarking performance, and monitoring quality in near-real time. With the right tools and preparation, hospitals can turn mandatory participation into an opportunity and position themselves for leadership in the 2030 value-based care landscape.
TEAM will test readiness, but it will also reward foresight. The hospitals that act now won’t just comply, they’ll compete, win, and set the standard for the next era of care delivery.
Additional resources
Download the MedInsight Bundles brochure ->
Download the VBC Platform brochure ->
The next generation of Medicare bundled payments: Considerations regarding TEAM – White paper
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