An article for hospital leaders on turning mandatory episode accountability into measurable margin.
Featuring Jessica Ohlssen (SVP, Revenue), Robby Wallace (VP, Clinical Implementation), and Dr. Bradley Heiges (Orthopedic surgeon, Optim Health System).
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Introduction: The biggest shift in surgical reimbursement in a decade
On January 1, 2026, Medicare’s Transforming Episode Accountability Model — TEAM — went live. For 741 acute-care hospitals across 188 markets, it is mandatory. There is no opt-out and no voluntary on-ramp.
This article distills a Rainfall Health webinar with three people who live inside this change every day. It’s written for the executives who now own the cost and quality of an entire episode of care — from 90 days before surgery to 30 days after.
TEAM holds hospitals accountable for the full surgical episode — not just what happens inside the OR, but everything that follows for 30 days after discharge.
Featured voices
- Jessica Ohlssen, SVP of Revenue — 16+ years driving value-based payment in hospitals and health systems
- Robby Wallace, VP of Clinical Implementation — advanced-degree board-certified RN with ~20 years across the care continuum
- Dr. Bradley Heiges, orthopedic surgeon — physician partner engaged with TEAM since the model was proposed
01 · What the TEAM model actually is
TEAM is the CMS Innovation Center’s mandatory, episode-based bundled-payment model. It runs from January 1, 2026 through December 31, 2030. Unlike many CMS programs before it, participation isn’t a choice.
| 741 | mandated acute-care hospitals |
| 188 | core-based statistical areas |
| 9 | census regions for benchmarking |
| 5 yrs | mandatory run, 2026–2030 |
Four accountability buckets
Reimbursement flows to the hospital as the accountable entity, and it’s tied to performance across all four:
- Quality
- Patient satisfaction
- Outcomes
- Cost management
Participation is mandatory: CMS selected 741 hospitals across 188 markets. Most programs before TEAM were voluntary — this one isn’t.
02 · Five surgical episodes, one accountable window
Each episode begins at the anchor procedure and covers all Medicare Part A and Part B spending through 30 days post-discharge — including post-acute care, readmissions, and ER visits. Medicare Advantage is not included.
| Episode | Description |
|---|---|
| LEJR | Lower extremity joint replacement — total hip and total knee arthroplasty; the highest-volume bundle |
| SHFFT | Surgical hip and femur fracture treatment — often urgent; the episode can begin well before day zero |
| Spinal fusion | Elective and complex, with wide variation in recovery paths |
| CABG | Coronary artery bypass graft — cardiac surgery, measured in part on 30-day mortality |
| Major bowel procedure | High-acuity abdominal surgery with significant post-acute needs |
The episode lifecycle
- Anchor procedure
- Hospital care + quality capture
- 30-day post-discharge window
- Annual reconciliation
03 · Three tracks, escalating risk
Hospitals participate through one of three tracks. Where you land determines how much upside — and downside — is on the table.
| Track | Timing | Risk profile |
|---|---|---|
| Track 1 — Glide path | Year 1 only | Upside-only with no downside, capped at 10%. The on-ramp into the model. |
| Track 2 — Lower-risk, two-sided | Years 2–5, capped at 10% | Reserved for safety-net and rural hospitals |
| Track 3 — Full two-sided risk | All five years | 20% stop-gain and stop-loss. Qualifies as an Advanced APM under MIPS. |
The automatic escalation: mandated hospitals that aren’t safety-net or rural move from Track 1 to Track 3 after Year 1. For most systems, full two-sided risk is the destination — not the exception.
How payment is settled
- The target price — Actual episode spend is compared to a target built from the hospital’s own history, blended with a regional benchmark, less a CMS discount for adjusted risk.
- The quality multiplier — The result is scaled by a composite quality score — readmissions, PSI-90, THA/TKA patient-reported outcomes, and CABG 30-day mortality, among others.
04 · A tale of two hip replacements
Same patient. Same surgeon. Same surgery. Two very different episodes.
Meet Randy — 68, with uncontrolled type 2 diabetes, an active smoker, anemic, living alone with stairs, indicated for a right total hip replacement.
05 · The money moves with the model
Rainfall analyzed a California health system’s actual 2024 Medicare reimbursements and extrapolated them under TEAM at the 20% Track 3 upside, across its two eligible facilities. The analysis identified $73.4 million in potential new revenue across existing service lines under the CMS TEAM model.
| Amount | |
|---|---|
| Upside | +$16M potential incentive payment, per year |
| Downside | –$8M potential penalty, per year |
Rainfall will run this analysis on your 2024 Medicare billings — free. Much of this data is publicly available; we turn it into your individual upside and downside. Email johlssen@rainfallhealth.com to get started.
06 · A surgeon’s view from inside the model
A well-done surgery is a good starting point — but it’s not a guarantee.
Dr. Bradley Heiges, orthopedic surgeon and TEAM physician partner
The OR door is no longer the finish line
For most surgeons, attention has ended at the operation or the post-op visit. TEAM extends accountability across the full 30 days — and the comorbidities that drive complications.
An opportunity, not a penalty
For a high-volume surgeon doing 300–700 joint replacements a year, TEAM is a chance to standardize excellent care across the whole community — and be measured on it.
Data over reputation
Real-time episode data — not just Harris Hip Scores — shows who is actually delivering, and that becomes the standard.
Not one-size-fits-all
Roughly 20% of the solution is unique to the local environment — community, referral patterns, and resources differ between Los Angeles, rural Oklahoma, and Michigan.
Collaboration is the pinnacle
TEAM unites the CPT world physicians live in with the DRG world hospitals live in — a shared accountability that previous models never quite achieved.
07 · Rainfall Health: the end-to-end TEAM solution
An accountability and accessibility platform powered by AI — built for hospitals and health systems navigating Medicare-mandated programs including TEAM and CJR-X.
Rainfall delivers the three Cs, plus AI-enabled care design:
| Pillar | What it means |
|---|---|
| Compliance | The signal through the noise — mapped to the exact steps required to stay compliant with each Medicare-mandated model |
| Case management | A product-based solution that augments your team so no episode is ever left unattended |
| Care coordination | We bring the post-acute network onto the same page as your hospital — where most of the episode actually happens |
| AI-enabled care design | Every episode personalized to maximize the return and the outcomes the model requires |
Roughly 60% of the care — and the cost — in a TEAM episode happens outside your hospital’s four walls. Winning under the model means owning that window, not just the operation.
08 · Get connected
We’ll perform a free analysis of your 2024 Medicare billings and build an individualized view of your potential upside and downside under TEAM.
Rainfall is the end-to-end solution — technology and services — for hospitals and health systems navigating the mandate.
- Learn more about the platform: rainfallhealth.com/team
- Request a demo + free analysis: Schedule a demo
- Email Jessica Ohlssen: johlssen@rainfallhealth.com
- Download PDF: Navigating the CMS TEAM Mandate eBook
Watch the webinar
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This article is for informational purposes only and is not legal, financial, or clinical advice. Figures are illustrative and based on publicly available data; individual results vary. Consult a qualified advisor for guidance specific to your organization. © 2026 Rainfall Health.
Jessica Ohlssen is Senior Vice President of Revenue at Rainfall Health. Robby Wallace is Vice President of Clinical Implementation at Rainfall Health.