Medicare's move to episode-based accountability is here. TEAM is mandatory, it started January 2026, and it puts your hospital on the hook for the cost and quality of an entire surgical episode. CJR-X is what comes next. Here is what it actually means, and how to come out ahead.
If your hospital was selected for TEAM, the model is not optional and the clock is already running.
Most of the explainers you will find restate the CMS fact sheet. This guide does something different. It walks through the model in plain language, shows you exactly where surgical episodes lose money and quality points, and then lays out a concrete way to protect the episode and share in the savings.
Read it top to bottom in about ten minutes. Part one explains the model. Part two shows where episodes break. Part three is how a focused surgical optimization program turns that risk into margin.
A hospital administrator's five-move framework for TEAM and CJR-X. Take it to your next leadership meeting.
TEAM is a five-year, mandatory, episode-based payment model running January 2026 through December 2030. CMS selected roughly 741 hospitals by geographic region. If you were selected, you participate. There is no opt-out.
An "episode" begins with a qualifying surgery and runs through 30 days after the patient leaves the hospital. You keep billing Medicare fee-for-service as you always have. At the end, CMS compares your total spending across that episode against a target price.
TEAM covers five high-volume, high-spend procedure families:
Three of the five are orthopedic. For most participating hospitals, joint replacement and hip fracture are the highest-volume episodes, which makes them the fastest place to win or lose under the model.
TEAM eases hospitals into risk through three tracks:
CMS sets a target price built from non-excluded Medicare Part A and Part B items and services across the episode, adjusted regionally and for quality.
At reconciliation, the math is simple in direction:
Both sides are adjusted by your quality performance. Strong quality protects and amplifies savings. Weak quality erodes them, even when your costs look good.
The surgery itself is largely standardized and predictable. The cost variation that decides whether you beat the target price happens in the 30 days after discharge, in care you historically have not controlled.
Put plainly: two surgeons can perform an identical operation, and the episodes can differ by thousands of dollars based entirely on what happens to the patient after they leave the building.
Two parts of TEAM are easy to underestimate:
Most practices review some pre-operative metrics, but structured prehabilitation is rare, and clearance is not the same as optimization. Without a single process owner accountable for the whole picture, modifiable risks routinely slip through.
The result is a patient you are now accountable for who clears the usual checks yet still carries modifiable risk factors, the kind that quietly raise the odds of a complication, a longer stay, a SNF discharge, or a readmission.
Everything above is the problem. What follows is a focused, guideline-first program built to get patients to surgery ready and keep them safe through the 30-day window, so the episode comes in under target with the quality scores to match.
“Bone health used to be a quality issue. It is becoming a reimbursement issue.” — Dr. Shannon Carpenter, on the TEAM model, in Becker’s Spine Review.
Read the coverage →TBHC stands up a structured pre-operative optimization visit for your elective surgical patients. One coordinated encounter screens every modifiable risk factor that drives episode cost and quality, flags what needs fixing, and sends the patient into surgery genuinely ready.
The model is deliberately clean: TBHC screens, flags, and counsels. The patient's own primary care and specialists treat. That keeps your referral relationships intact and keeps the program inside its lane.
This is the part most programs get wrong, and it is not something you buy off a shelf. TBHC's optimization protocol is guideline-driven and built by a practicing orthopedic surgeon who has stood on both sides of these episodes. It is a structured, step-by-step process, so every modifiable risk factor is actually evaluated against the guidelines and addressed before the patient ever reaches the operating room. Nothing gets checked off and forgotten. Nothing falls through.
The specifics are the program. What matters to you is the result.
Because post-acute care is the largest cost swing in any episode, TBHC builds disposition planning in from the first visit. Expectation-setting, home-readiness, mobility confidence, and a monitored home recovery program move appropriate patients home instead of to a skilled nursing facility, safely.
A single SNF stay avoided can be the difference between an episode that earns and one that owes.
The 30-day post-discharge window is where episodes are decided, and it is the window almost no hospital actively owns. TBHC does. We hold concierge-level care through the full window, catching early warning signs and intervening before they become an emergency department visit or a readmission.
This is the leak point from Part II turned into something you control. The weeks that used to go unwatched become the weeks that protect your episode.
The inpatient encounter is the other half of the episode, and you do not need a new vendor platform to fix it. TBHC works within your existing system, optimizing order sets, protocols, and best practices to tighten the inpatient stay for your highest-risk episodes.
It is institution-reviewed and built into how your teams already work, so the gains outlast any single patient.
TEAM holds the hospital accountable, but surgeons drive the behavior that decides the episode. Those two parties do not always speak the same language, and that is exactly the gap TBHC fills. An orthopedic surgeon who understands the perioperative environment from the inside is the right person to sit at both tables, translating between what the hospital needs to protect its margin and what surgeons need to protect their schedules, their outcomes, and their patients.
That shared credibility is what makes the alignment real instead of theoretical.
If you are an acute-care hospital paid under Medicare's Inpatient Prospective Payment System and located in one of the 188 geographic areas (CBSAs) CMS selected, yes — TEAM is mandatory, not opt-in. CMS named 741 hospitals for the model, which began January 1, 2026 and runs through 2030. It holds you accountable for the cost and quality of five surgical episodes — including surgical hip and femur fracture treatment and spinal fusion — from the procedure through 30 days after discharge.
No. TEAM is the on-ramp, not the destination. CMS has proposed CJR-X, a mandatory nationwide joint-replacement bundle slated to begin October 1, 2027 for most IPPS hospitals in the country (TEAM hospitals and Maryland exempted). Separately, the Ambulatory Specialty Model — already finalized — begins January 1, 2027 and puts individual specialists, including orthopedic surgeons, neurosurgeons, and pain physicians, at two-sided financial risk for low back pain. As Dr. Carpenter puts it: “Even if you're not one of the chosen hospitals for TEAM, buckle up.”
Two of the five directly — surgical hip and femur fracture treatment, and spinal fusion — and a third, lower-extremity joint replacement, is affected by bone quality at the implant. Fragility fractures are the front door to the hip and femur bundle, and poor bone quality drives the complications, reoperations, and readmissions that push an episode past its target price.
Under TEAM you are paid a single target price for the surgery plus 30 days of recovery. Complications, reoperations, and readmissions come straight out of your margin — and untreated osteoporosis is a leading driver of all three. Roughly 90% of fragility-fracture patients leave the hospital with no diagnosis and no follow-up, which all but guarantees the next fracture and the next episode. Treating the disease, not just the fracture, is how you protect the bundle.
It depends on your track. Track 1, available to most hospitals in year one, is upside-only with gains capped at 10% of the episode target price. Track 3 — and eventually most participants — carries full two-sided risk, with stop-loss and stop-gain limits of 20%. Multiply that across every joint replacement, hip fracture, and spinal fusion you perform in a year; our TEAM Exposure Calculator estimates your number.
January 1, 2027. CMS's Ambulatory Specialty Model, finalized in October 2025, makes participation mandatory with no opt-out for an estimated 8,600 specialists — including orthopedic surgery, neurosurgery, and pain management — with mandatory Medicare Part B payment adjustments that start at up to ±9% and rise in later performance years, tied to cost and quality for conditions including low back pain.
We stand up a surgical optimization program built around the exact levers that move a TEAM episode: a pre-operative optimization clinic that screens and flags every modifiable risk factor (your patients' own physicians treat, so your referral relationships stay intact), disposition planning that moves appropriate patients home instead of to a skilled nursing facility, and concierge-level care across the 30-day post-discharge window that almost no hospital actively owns. The program is guideline-driven and built by a practicing orthopedic surgeon. The effect: fewer complications, shorter stays, more home discharges, and stronger quality scores.
Because the downside is coming and these programs take months to stand up. Most hospitals begin in Track 1, which is upside-only in year one, so 2026 is the cheapest year to build the muscle — before two-sided risk is on the table. When Track 3's downside and the proposed CJR-X model take hold, the hospitals that started early are already winning episodes instead of scrambling to react.
The cheapest year to get this right is the one with no downside risk. The Bone Health Clinic can stand up a surgical optimization program around your TEAM episodes, starting with the orthopedic procedures that move the needle fastest.
And TEAM is only the beginning. TEAM is the on-ramp. CJR-X is the highway. The same muscle you build now is what carries you onto it, and the hospitals that merge smoothly are the ones that started here. You will want to be one of them.