With the FY26 Inpatient Prospective Payment System (IPPS) update, CMS is setting the stage for one of the most transformative compliance overhauls in recent history—the implementation of the TEAM (Transforming Episode Accountability Model) Mandate.

Here’s what’s new in FY26—and what healthcare leaders must do to navigate the policy shift with confidence.

Understanding the TEAM-IPPS Connection

The FY26 IPPS final rule positions TEAM as a key pillar in CMS’s strategy to:

• Strengthen episode-based accountability

• From historical lookbacks to encounter-specific validation

• Improve documentation integrity
• Enhance equity through Social Determinants of Health (SDoH) capture

TEAM is not optional. It's being embedded into payment models, compliance workflows, and quality reporting frameworks under IPPS.

FY26 IPPS Policy Updates Tied to TEAM

Here’s a step-by-step playbook:

• 1. Mandatory Participation in Episode-Based Bundles

  At least 5 new condition-specific bundles (e.g., CHF, COPD, Joint Replacement) will be mandatory

  No opt-out for selected hospital systems in pilot MSAs

• 2. New Documentation and Coding Requirements

  TEAM requires bundle-specific diagnosis clustering

  Real-time coding feedback expected via certified tools

  Hospitals must meet clinical documentation improvement (CDI) thresholds tied to bundle logic

• 3. Expanded Quality Reporting Metrics

  Integration of patient-reported outcome measures (PROMs) into quality dashboards

  Risk-adjusted outcomes tied directly to MS-DRG reimbursement modifiers

• 4. Incentives and Penalties

  Positive payment adjustments for TEAM-compliant bundle performance

  Penalties for hospitals with high denial rates, poor episode attribution, or low SDoH data capture

The Financial Impact of TEAM Under IPPS

TEAM introduces revenue volatility for organizations unprepared to meet the episode-level expectations of CMS.

Financial Risk Area	Impact	Strategy
MS-DRG Bundles	Shift from volume to outcome-based payment	Episode-level cost and outcome forecasting
Denials	Higher audit risk for coding inconsistencies	Invest in CDI and coding QA tools
Readmissions	Now linked to episode bundles, not general diagnosis	Proactive care coordination post-discharge
Risk Adjustment	Tied to real-time HCC scoring within bundles	Integrate AI-based HCC crosswalk tools

Operational Shifts Hospitals Must Make in FY26

 Required Adjustments:

• Upgrade to TEAM-compliant documentation workflows
• Deploy HCC crosswalk logic into inpatient EHRs
• Ensure CDI teams are trained on bundle-specific coding
• Build PROMs collection pathways into patient engagement systems
• Integrate SDoH data collection into intake and discharge planning

SolvEdge Insight – Preparing You for FY26 Compliance

SolvEdge helps hospital systems transition smoothly by offering:

• TEAM-compliant documentation modules
• Real-time bundle analytics with denial prevention tools
• AI-powered HCC crosswalk and episode tagging
• PROM and SDoH integration across the patient journey
• Compliance dashboards for CMS audit readiness

SolvEdge turns TEAM’s complexity into operational clarity.

SolvEdge Insight – Preparing You for FY26 Compliance

Before TEAM enforcement begins, ensure your organization can check these boxes:

• We’ve identified all TEAM-impacted clinical episodes
• We’ve trained CDI and coding staff on new documentation rules
• Our risk capture model aligns with real-time TEAM scoring
• PROMs and SDoH data are actively collected and analyzed
• We have audit-ready reporting aligned with IPPS TEAM indicators

From Policy to Practice—TEAM is Here

The FY26 IPPS update isn’t just a payment adjustment—it’s the activation point for TEAM’s widespread impact on hospital strategy. By aligning clinical, financial, and compliance systems to this mandate, hospital leaders can protect revenue, improve outcomes, and lead confidently into a value-based future..