Medicare's payment reforms often come and go, but the CMS TEAM Model stands out from the crowd. Starting January 2026, this mandatory episode-based payment system isn't just another healthcare acronym – it's reshaping how hospitals approach patient care and cost management. While previous models dabbled in value-based care, the TEAM model brings advanced risk adjustment and health equity to the forefront of healthcare delivery.The financial framework of the TEAM model gets interesting. Unlike previous systems, this model employs a nuanced approach that considers multiple factors simultaneously. This sophisticated design helps ensure fairness while promoting efficiency:

Target prices factor in hospital size and safety net status, creating a more level playing field
Quality scores directly influence payment adjustments, with clear metrics for success
Site-neutral pricing eliminates arbitrary cost differences between care settings
Strategic discounts: 1.5% for CABG and bowel procedures, 2% for orthopedic cases
Risk adjustment methodology accounts for social determinants of health