As the U.S. healthcare landscape shifts toward 2026, a new federal directive is set to transform the financial reality of surgical care. The Transforming Episode Accountability Model (TEAM) is no longer a pilot program—it is a mandatory shift in how hospitals will be paid for their most high-volume procedures.

A) What This Means: Accountability for the Entire Episode

Starting January 2026, CMS is moving beyond “fee-for-service” for five major surgical categories, including CABG (Coronary Artery Bypass Grafting) and Hip/Knee replacements.

Under the TEAM policy, hospitals are held accountable for the entire 30-day episode of care. This includes the surgery itself, the hospital stay, and all related post-acute care and readmissions within that month-long window. Instead of being paid for individual tasks, the hospital is responsible for the financial outcome of the entire patient journey.

B) How It Impacts Hospitals: The Cost vs. Target Price War

The impact of TEAM is a direct hit to the hospital’s bottom line. CMS will establish a fixed target price for these episodes. The financial consequences are binary:

• Keep the Savings: If your hospital’s total internal costs for the 30-day episode are lower than the CMS target price, you retain the difference as profit.
• Absorb the Loss: If your internal costs—including those triggered by post-discharge complications or inefficient resource use—exceed the target price, the hospital must pay the difference back to CMS.
• For hospitals still operating on departmental averages and “chargemaster guesswork,” this creates an existential risk. Without knowing the exact cost of every minute in the OR, every consumable used, and every day in recovery, you are effectively flying blind into a mandatory risk-sharing contract.

C) How Proactive Solutech Services Ensure Survival

In the era of TEAM, Time-Driven Activity-Based Costing (TDABC) shifts from a financial luxury to a critical survival tool. Proactive Solutech provides the specialized frameworks needed to win under bundled payments:

• Granular Episode Mapping: We don’t just look at the surgery; we map the entire 30-day resource consumption. By identifying the true “cost-to-serve” across the full episode, we highlight where your costs are leaking and where you are exceeding target prices.
• Predictive Margin Analysis: We can design for you a TDABC models that allows you to simulate different clinical pathways to see which protocols yield the best patient outcomes at the lowest cost, ensuring you consistently stay below the CMS target price.
• Capacity Optimization: We analyze clinical time and resource intensity to ensure your high-cost surgical suites and staff are optimized for efficiency, reducing the “per-episode” cost and maximizing your share of the savings.

The Bottom Line

The TEAM mandate is a clear message from the U.S. government: hospitals must become as efficient as they are clinically excellent. By the time January 2026 arrives, the winners will be those who have replaced financial opacity with data-driven precision.

Don’t let fixed target prices erode your margins. Partner with Proactive Solutech to master your episode costs and turn mandatory accountability into a driver for profitability.