New Model to Improve Health and Reduce Costs for Millions of Americans Undergoing High-Spend Medical Procedures

A new policy released today by the Centers for Medicare & Medicaid Services (CMS) will launch the Transforming Episode Accountability Model (TEAM) at 742 hospitals nationwide on January 1, 2026. The innovative blueprint aims to reduce complications and reward quality for doctors and hospitals providing knee and hip replacements, heart bypass, and other major surgeries. The new model will improve patient experience and outcomes, helping them recover more quickly after surgery and undergo smoother coordination of care. Hospitals will now have the sole responsibility to coordinate and pay for entire episodes of care, increasing accountability.

Key Takeaways:

• The new Transforming Episode Accountability Model (TEAM) will reduce complications and reward quality for doctors and hospitals providing knee and hip replacements, heart bypass, and other major surgeries.
• The model will improve patient experience and outcomes, helping them recover more quickly after surgery and undergo smoother coordination of care.
• Hospitals will now have the sole responsibility to coordinate and pay for entire episodes of care, increasing accountability.
• Every year, Medicare pays $19.2 billion for the five highest-spend surgical procedures: lower extremity joint replacement, spinal fusion, coronary artery bypass graft, major bowel procedures, and hip/femur fracture treatment.
• The quality of the outcomes associated with these procedures vary dramatically, with a recent Medicare study finding a ~16% complication rate for total knee arthroplasties (lower extremity joint replacement).
• The TEAM approach will eliminate unnecessary costs by empowering hospitals to improve coordination and quality, resulting in better patient outcomes.
• Select high-performing health systems can earn up to 20% in additional reimbursements, yielding more than $100 million in cost savings per system.
• The 742 facilities participating in TEAM will gain $3 billion in additional revenue via incentive payments by adhering to the new model.
• The new rule will require hospitals to collect, standardize, and report on patient outcomes, providing high-quality care coordination and post-acute care.
• The policy decision by CMS to implement a program of this size and scope signals the importance of value-based reimbursement as national health policy.
• Outcome-based care is pivotal in providing quality healthcare to patients, as stated by Rob Bart M.D., Chief Medical Information Officer at UPMC.

Statistics:

• $19.2 billion: Annual Medicare spending on the five highest-spend surgical procedures.
• 20%: Estimated potential increase in additional reimbursements for select high-performing health systems participating in TEAM.
• $100 million: Potential cost savings per system for high-performing health systems participating in TEAM.
• $3 billion: Additional revenue gained by participating hospitals through incentive payments.
• 742: Number of hospitals participating in the Transforming Episode Accountability Model (TEAM) nationwide.
• 5: Number of high-spend surgical procedures targeted by the new model: lower extremity joint replacement, spinal fusion, coronary artery bypass graft, major bowel procedures, and hip/femur fracture treatment.
• ~16%: Complication rate for total knee arthroplasties (lower extremity joint replacement) as found in a recent Medicare study.

Sources:

• "Final rule released today will improve health and reduce costs for millions of Americans undergoing the five highest-spend medical procedures"
• PRNewswire, "Centers for Medicare & Medicaid Services (CMS) issues 2026 policy codifying the Transforming Episode Accountability Model (TEAM)"
• Rainfall Health, About Us
• University of Pittsburgh Medical Center, [UPMC website](https://www.hopkinsmedicine.org/news/articles/new-multimillion-dollar-funding-deal-signed-by-upmc)
• Source: Rainfall Health

Note: The sources listed above are in the exact format as mentioned in the original text.