Navigating 2026 TEAM Bundles: Risk Mitigation Strategies for Mandatory Joint Replacement Payments
- SolvEdge
- Feb 04, 2026
- 6 mins read
The Transforming Episode Accountability Model (TEAM), launched by the Centers for Medicare & Medicaid Services (CMS) on January 1, 2026, represents a major shift in Medicare reimbursement for surgical care. This mandatory episode-based payment model holds selected acute care hospitals accountable for the quality and total cost of care during a 30-day episode surrounding specific high-volume, high-cost surgeries. It covers about 25% of Medicare spending on these procedures nationwide, with a strong emphasis on lower extremity joint replacements (hip and knee), among others.
TEAM builds on lessons from prior models like the Comprehensive Care for Joint Replacement (CJR) and Bundled Payments for Care Improvement (BPCI) Advanced, but introduces mandatory participation for roughly 740-750 hospitals in selected Core-Based Statistical Areas (CBSAs). Hospitals must coordinate care from the anchor procedure (inpatient or outpatient) through 30 days post-discharge, including post-acute services like skilled nursing, home health, and readmissions.
Key Procedures Covered in TEAM
TEAM focuses on five surgical episodes:
Lower Extremity Joint Replacement (LEJR) — hip and knee replacements (inpatient and outpatient settings)
Surgical Hip and Femur Fracture Treatment (SHFFT)
Spinal Fusion
Coronary Artery Bypass Graft (CABG)
Major Bowel Procedure
For orthopedic leaders, LEJR episodes are particularly critical, as they represent a large portion of Medicare’s joint replacement volume and have historically shown potential for savings through better coordination.
Why Risk Mitigation Matters Now
Under TEAM, hospitals face financial accountability: Spending below a risk-adjusted target price (based on historical data) can yield reconciliation payments (with quality adjustments), while overspending triggers repayments. The model includes upside and downside risk tracks, with protections for safety-net and rural hospitals in early years.
Common challenges include:
Readmissions and complications — especially sepsis, blood clots (deep vein thrombosis/pulmonary embolism), infections, and falls.
Post-acute care variability — high costs from extended skilled nursing facility stays or unnecessary readmissions.
Quality metrics — such as the Hospital-Level Total Hip and/or Total Knee Arthroplasty Patient-Reported Outcome-Based Performance Measure (PRO-PM), CMS Patient Safety and Adverse Events Composite (PSI 90), and others rolling out in later years.
These gaps can erode margins in bundled payments, making proactive strategies essential for Chief Medical Officers (CMOs), operations leaders, and orthopedic teams.
Effective Risk Mitigation Strategies for Mandatory Joint Replacement Bundles
To succeed in TEAM, hospitals should prioritize outcome-focused platforms and cross-continuum coordination. Here are proven approaches:
Enhance Pre- and Post-Operative Care Pathways Implement standardized protocols for LEJR patients, including preoperative risk stratification (e.g., for infection or clot risk), patient education, and optimization of comorbidities like diabetes or obesity. This reduces complications like sepsis (a top driver of readmissions in joint replacements).
Focus on Complication Prevention: Sepsis and Blood Clots
Adopt evidence-based VTE prophylaxis regimens tailored to patient risk.
Use early mobilization, infection surveillance, and rapid response protocols to minimize sepsis readmissions.
Integrate real-time monitoring tools to flag high-risk patients early.
Leverage Outcome Platforms and Data Analytics Invest in advanced platforms that track episode-level outcomes, predict readmission risks, and benchmark performance against TEAM targets. These tools help identify gaps in care transitions and enable targeted interventions.
Strengthen Care Coordination and Partnerships Build networks with post-acute providers (e.g., preferred SNFs and home health agencies) to reduce length of stay and variability. Use telehealth waivers and SNF 3-day rule waivers available under TEAM to support efficient recovery.
Monitor Quality Metrics Closely Align internal dashboards with TEAM-required measures, including PRO-PM for hip/knee outcomes and safety composites. High performance on these can offset financial risks through quality adjustments.
Prepare Financially and Operationally Conduct episode simulations using historical data to model potential gains/losses. Engage multidisciplinary teams (orthopedics, anesthesia, case management) to own bundle performance.
By addressing these areas—particularly sepsis and clot prevention—hospitals can turn TEAM’s financial risk into an opportunity for better patient outcomes and sustainable margins.
Conclusion
The 2026 TEAM launch marks a pivotal moment for value-based orthopedic surgery. Mandatory joint replacement bundles demand proactive risk mitigation to protect revenue and elevate care quality. CMOs and operations leaders who invest in outcome platforms, standardized pathways, and complication-focused strategies will be best positioned to thrive. Start assessing your hospital’s readiness today—TEAM is here, and preparation is key to success in this new era of episode accountability.
For more details, visit the official CMS TEAM page: