Hospitals in nearly 200 markets will soon be accountable not just for a surgical admission but also for what happens after the patient goes home.

The Centers for Medicaid and Medicare Service’s (CMS)Transforming Episode Accountability Model (TEAM) — a mandatory, 5-year episode-based model that goes into effect January 1 — ties hospital performance to quality and total spending from admission through 30 days post-discharge for five common surgical episodes: lower-extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass grafting, and major bowel procedures.

Unlike classic single bundled payment pilots, clinicians will still bill Medicare fee-for-service; CMS retrospectively reconciles actual spending against a target price and applies model rules — including discount factors, risk tracks, and quality adjustments — to determine savings or penalties. TEAM ramps up financial risk over three performance tracks, from upside-only to two-sided risk, through 2030.

Why It Matters to Hospitalists

Hospitalists are the linchpin of TEAM’s clinical and operational success. The model’s 30-day accountability window makes inpatient decision-making, discharge readiness, transitions of care, and postacute utilization management central to both hospital performance and patient outcomes.

Kyle Cooksey, president and CEO of Nashville-based Deacon Health, which provides surgical care navigation, said in recent meetings in Washington, DC, with senior leaders from CMS and the CMS Innovation Center (CMMI), as well as members of the House Ways and Means Committee, the body responsible for overseeing the CMMI budget, made clear to him what “a really big deal” the upcoming shift to the TEAM is going to be for these front-line physicians.

“Because the hospital’s on the hook for the entire cost, there will definitely be more risk coming downstream to physicians than they’ve experienced before,” Cooksey said. “The first year is upside-only, but in year 2 and especially year 3, you move into real two-sided risk.”

Cooksey said that the 30-day window will push hospitals to standardize transitions and actively manage postacute services in a way never before seen.

“Post-Jan 1, hospitals can’t afford unnecessary care that doesn’t add value.”

The Episodes and the Rules

TEAM focuses on five high-volume surgical episodes. Each begins with the inpatient surgical admission and follows the patient through 30 days post-discharge — encompassing the full recovery period rather than just the hospital stay.

“The episode of care is the hardest dollar to manage,” Cooksey said. “Postacute care spend is so out of control, and there’s been no accountability because everything’s been fee-for-service.”

Participation in TEAM isn’t optional. Hospitals and hospital systems are assigned to the model according to geography, so if a hospital is located within a selected market, it must participate.

Cooksey said TEAM is poised to expand to other markets.

“They’ve already picked out their next 25 hospitals to mandate,” said Cooksey, referring to CMS and CMMI leadership. “They’re really betting on this model to bring value.”

How the Money Flows

Cooksey said hospitals and physicians will still bill Medicare fee-for-service as usual, but CMS will retrospectively compare actual spending against a target price based on regional norms and case mix, and indicators of quality performance can adjust the final reconciliation. Hospitals that come in below target with good outcomes share in savings; those that exceed it may owe money back to CMS.

To help hospitals manage episodes more efficiently, Cooksey said CMS built in certain policy waivers that allow for more flexible discharge decisions — such as alternatives to the traditional 3-day inpatient requirement for skilled nursing placement. That means hospitalists will have both permission and pressure to right-size postacute care, ensure medication reconciliation is complete, and confirm that therapy goals and follow-up plans are in place before discharge.

Cooksey said that care navigation has an obvious role in helping hospitalists achieve success within the TEAM.

“At the end of the day, it’s doing what’s right by the patient,” said Cooksey. “Our job is to be the surrogate grandchild holding that patient’s hand from predischarge through recovery — making sure the plan actually happens.”

Practice-Level Impacts Hospitalists Should Anticipate

Cooksey said the new model will place hospitalists squarely at the center of how their facilities and systems perform under TEAM, blurring the familiar boundaries of inpatient medicine.

“Hospitalists have always been responsible for managing the patient while they’re in the bed,” Cooksey said. “Now, under TEAM, that accountability extends far beyond discharge. The decisions they make on the floor — when to discharge, where the patient goes next, what meds they leave with — will directly impact hospital performance.”

He said discharge readiness will take on new importance as hospitals seek to reduce preventable readmissions and postacute costs.

“Priority one is making sure the patient is truly ready to go home,” said Cooksey. “That means confirming the discharge plan is realistic, the meds are reconciled, and there’s a clear understanding of who’s checking in afterward.”

Use of things like skilled nursing facilities (SNFs) will be under a microscope, he said.

“SNF and rehab use is where hospitals bleed money,” Cooksey said. “Hospitals are going to start asking a lot more questions about whether those placements are necessary, how long patients stay, and what outcomes they’re seeing.”

Cooksey also expects communication workflows to tighten. As hospitals track outcomes over an entire episode, clear, timely documentation will become a financial imperative as well as a clinical necessity.

“The hospital’s analytics team can’t fix what they can’t see,” he said. “Hospitalists will need to document the discharge summary promptly, include the med list and follow-up plan, and make sure that information gets to whoever’s responsible for the next step in care.”

With TEAM, Cooksey believes coordination with surgical teams will also have to evolve, and that the model’s surgical bundles will demand closer, ongoing communication between hospitalists, surgeons, and postacute navigators to keep patients on track through recovery.

“The days of a surgeon handing the patient off and never hearing back are over,” he said. “Everybody shares the outcome now, and that means sharing the work.”

Finally, Cooksey said he thinks hospitals will likely move toward financial risk-sharing models that include their physician partners.

“Right now, TEAM’s reconciliation happens at the hospital level,” he said. “But I’d be surprised if hospitals don’t start passing some of that upside and downside risk to physician groups. It’s going to become a shared-performance environment.”

What to Do Now: Practical Tips for Hospitalists 

Cooksey said the first priority for hospitalists should be to take ownership of what happens in the critical days immediately after discharge.

“The first 72 hours are everything,” he said. “That’s when patients are most vulnerable: They may not have filled their prescriptions yet, they’re confused about wound care, or they can’t get in touch with a nurse. If no one checks in, that’s when you see avoidable readmissions.”

Cooksey particularly underscored the need for medication reconciliation that’s more than a few words to a caregiver or a quick exchange on the phone. He recommended that hospitalists partner with pharmacists, nurses, and social workers to ensure that patients actually have their prescriptions in hand and know how to take them.

“Too many patients leave without starting their meds,” said Cooksey. “They hit a prior-authorization wall, or their copay is too high, and then they end up septic or back in the ED [ emergency department]. We’ve built systems to catch that,” he said, in reference to his company’s postsurgical care navigation services, “but it really starts with the physician team knowing what’s supposed to happen next.”

Cooksey said that attention to postacute orders is another major lever hospitalists can pull to improve performance under TEAM.

“You can’t just check the box for inpatient rehab or twenty PT visits anymore,” he said. “If a patient can safely recover with home-based therapy, that’s where they should be. The model rewards appropriateness, not volume.”

He also stressed the importance of stronger communication across the care continuum, particularly between hospitalists, surgeons, and primary care physicians (PCPs).

“When you’re managing an episode that extends 30 days past discharge, it’s no longer enough to say, ‘Follow-up with your PCP,’” Cooksey said. “We have to make sure that handoff actually happens. The surgeon, the hospitalist, and the primary care doctor all share accountability now.”

Finally, Cooksey said that attention to behavioral health and social determinants of care will be essential to sustaining outcomes and avoiding readmissions.

“A lot of these patients have depression, anxiety, or food insecurity,” he said. “If we ignore that, the whole plan falls apart. The mind, the heart, and the stomach — that’s how you take a holistic approach and keep people well.”

Cooksey reported working for Deacon Health. He had no other disclosures.