--- title: "Transforming Episode Accountability Model: A New Era in Healthcare Financial Management" description: CMS launches TEAM, a 5-year model to improve care coordination and reduce costs for Medicare surgeries, potentially saving $705 million. image: https://blog.becpas.com/hubfs/Transforming%20Episode%20Accountability%20Model%20(TEAM)%20A%20New%20Era%20in%20Healthcare%20Financial%20Management.jpg --- [Twitter ** ](https://www.facebook.com/BrownEdwardsCPAs?utm_source=BE+Website&utm_medium=Website+Icon&utm_campaign=BE+Website+Social+Icon&utm_content=Facebook) [Facebook-f ** ](https://www.linkedin.com/company/brown-edwards/?utm_source=BE+Website&utm_medium=Website+Icon&utm_campaign=BE+Website+Social+Icon&utm_content=LinkedIn) [Linkedin ** ](https://www.youtube.com/channel/UC3ReCSn6AFfdQiCUsH4oopA?utm_source=BE+Website&utm_medium=Website+Icon&utm_campaign=BE+Website+Social+Icon&utm_content=YouTube) [Youtube ** ](https://www.youtube.com/channel/UC3ReCSn6AFfdQiCUsH4oopA?utm_source=BE+Website&utm_medium=Website+Icon&utm_campaign=BE+Website+Social+Icon&utm_content=YouTube) [ Client Portal ](https://becpas.sharefile.com/Authentication/Login) [ Make A Payment ](https://becpas.com/payments/) [ Request Proposal ](https://becpas.com/request-for-proposal/) ![](https://blog.becpas.com/hubfs/Transforming%20Episode%20Accountability%20Model%20(TEAM)%20A%20New%20Era%20in%20Healthcare%20Financial%20Management.jpg) # Transforming Episode Accountability Model: A New Era in Healthcare Financial Management Published by [ Cathryn Johnson ](https://blog.becpas.com/author/cathryn-johnson) on May 27, 2025 8:00:00 AM The Centers for Medicare and Medicaid Services (CMS) finalized a 5-year mandatory bundle payment model called [Transforming Episode Accountability Model (TEAM)](https://www.cms.gov/priorities/innovation/innovation-models/team-model), aimed to address fragmented care experienced by Medicare beneficiaries pre/post-surgery, enhance care coordination, patient transitions, and reduce avoidable readmissions with potential to save $705 million over five years. ## Timeline and Scope - Duration: January 2026 - December 2030 - Coverage: [Hospitals selected to participate](https://view.officeapps.live.com/op/view.aspx?src=https%3A%2F%2Fwww.cms.gov%2Fteam-model-participant-list&wdOrigin=BROWSELINK) are mandated to join ## Bundles and Costs Participating hospitals receive regional target prices in late 2025 to cover all costs for a 30-day episode of care for the following bundles: | **Bundle Name** | **Average National Cost** | **Number of National Episodes** | **MS-DRGs and/or HCPCS codes*** | | --- | --- | --- | --- | | Coronary Artery Bypass Graft Surgery (CABG) | $48,905   | 28,088   | MS-DRG 231, 232, 233, 234, 235, 236 | | Lower Extremity Joint Replacement (LEJR) | $21,063   | 215,957   | MS-DRG 469, 470, 521, 522 HCPCS 27447, 27130, 27702 | | Surgical Hip and Femur Fracture Treatment (SHFFT) | $35,501   | 75,254   | MS-DRG 480, 481, 482   | | Spinal Fusion (non-Cervical) | $46,326   | 65,968   | MS-DRG 402, 426-430, 447, 448, 450, 451, 471-473 HCPCS 22551, 22554, 22612, 22630, 22633 | | Major Bowel Procedure | $29,184 | 59,983 | MS-DRG 329, 330, 331 |   * Note: Ambulatory Surgery Centers (ASCs) will not initiate an episode. ## Accountability and Performance Hospitals must ensure coordinated, high-quality care during the procedure and 30-days post-discharge. Providers will bill Medicare as usual, with annual reconciliation of actual costs against the target price. Bonuses or penalties will be applied based on performance. ## Additional Program Elements - **Participation Tracks:** The program offers graduated risk through different participation tracks to accommodate varying levels of risk and reward. - **Incentive Sharing:** Participants can share incentives with physicians and providers. - **Quarterly Deliverables:** Hospitals must provide updates to Medicare. - **Primary Care Referrals:** Required to support long-term health outcomes. - **Health Equity Plans (HEP) and Environmental Reporting: **Voluntary submission of HEP and greenhouse gas metrics. ## Case Study and Preparation Hospitals will receive historical spend information and target prices in late 2025. For example, a hospital's Lower Extremity Joint Replacement 30-day bundle may reveal significant cost insights: | **Facility Type** | **Cost/Episode Hospital** | **Cost/Episode Regional** | | --- | --- | --- | | All | $23,409 | $17,504 | | Anchor Inpatient | $13,641 | $13,643 | | Non-Anchor Inpatient | $1,099 | $1,084 | | Skilled Nursing Facility | $8,206 | $1,896 | | Home Health Agency | $382 | $674 | | Outpatient | $81 | $207 | ## Future Implications Successful bundles will position hospitals for future success if CMS mandates this program for all hospitals, adds more bundles, or if hospitals pursue commercial and/or Medicaid bundle programs with a goal to manage the total cost of care while maintaining optimal quality and outcomes. ### Contact Us *C**opyright © 2024 BDO USA, P.C. All rights reserved. www.bdo.com* Tags: [Healthcare](https://blog.becpas.com/tag/healthcare) [Back to Blog](https://blog.becpas.com) ## Related Articles ## [State and Local Tax Compliance for Real Estate Professionals: A Complete Guide](https://blog.becpas.com/state-and-local-tax-compliance-for-real-estate-professionals-a-complete-guide) As real estate professionals expand their portfolios across state lines, understanding state and... [Read More ](https://blog.becpas.com/state-and-local-tax-compliance-for-real-estate-professionals-a-complete-guide) ## [Your Guide to the CY 2025 Medicare Occupational Mix Survey Requirement](https://blog.becpas.com/your-guide-to-the-cy-2025-medicare-occupational-mix-survey-requirement) Key requirements, considerations, and best practices to know before the initial June 30, 2026... 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[Read More ](https://blog.becpas.com/healthcare-real-estate-check-up) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Cathryn Johnson", "url" : "https://blog.becpas.com/author/cathryn-johnson" }, "dateModified" : "2025-05-27T12:00:02.661Z", "datePublished" : "2025-05-27T12:00:00.000Z", "headline" : "Transforming Episode Accountability Model: A New Era in Healthcare Financial Management", "image" : [ "https://blog.becpas.com/hubfs/Transforming%20Episode%20Accountability%20Model%20(TEAM)%20A%20New%20Era%20in%20Healthcare%20Financial%20Management.jpg" ], "mainEntityOfPage" : { "@id" : "https://blog.becpas.com/transforming-episode-accountability-model-team-a-new-era-in-healthcare-financial-management", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://blog.becpas.com/hubfs/2021%20BE-Logo-4color-oldgold-3.png" }, "name" : "Brown Edwards & Company, LLP" } } ```