A TEAM hospital in Track 3 can owe CMS up to 20% of its total target price in a year
The most a hospital can owe CMS for one performance year, as a share of its total target price, by participation track
Show the numbers as a table
| Category | Value | Note |
|---|---|---|
| Track 1 (every hospital in 2026, safety-net hospitals through 2028) | 0% | Bonus only, with nothing to repay |
| Track 2 (safety-net, rural and other eligible hospitals, 2027 to 2030) | 5% | |
| Track 3 (any hospital, 2026 to 2030) | 20% |
About the data
- Sources
- CMS, TEAM Model Overview slides (updated September 2026) (opens in a new tab)Slide 11, Participation Tracks
- 42 CFR 512.550, TEAM reconciliation (eCFR) (opens in a new tab)512.550(e), limitations on loss
- Method
- The limits come from 42 CFR 512.550(e). If a hospital's average spending after its episodes end runs more than 3 standard deviations above the regional average, CMS takes back the excess, and that amount sits outside these limits.
- Published
- Updated
Free to share and embed with credit to Kent Applied (CC BY 4.0). The source data keeps its own terms.
Facts from this chart
20%
of its total target price, the most a Track 3 hospital repays
Under TEAM, a Track 3 hospital's repayment to CMS for a year is capped at 20% of its total target price, per 42 CFR 512.550.
Source: 42 CFR 512.550, Reconciliation process and determination of the reconciliation payment or repayment amount.
KentApplied716
hospitals in TEAM, on CMS's model page
CMS lists 716 hospitals as participants in TEAM, Medicare's mandatory episode payment model for five surgeries.
Source: Transforming Episode Accountability Model (TEAM) model page.
KentApplied
Sources for the figures above: 42 CFR 512.550, Reconciliation process and determination of the reconciliation payment or repayment amount (opens in a new tab); Transforming Episode Accountability Model (TEAM) model page (opens in a new tab).
Related charts
- From the blog
At the median TEAM hospital, the hospital stay uses 38% to 70% of the target, by surgery
Kent Applied, TEAM position report and method; CMS, TEAM PY1 preliminary target prices; CMS, Medicare Inpatient Hospitals by Provider and Service, 2024; CMS, TEAM episode construction specifications; CMS, payment standardization method; CMS, TEAM model page - From the blog
Payers initially denied nearly 12% of hospital and physician claims in 2024
Kodiak Solutions, press release on 2024 initial denial rates (May 21, 2025) - From research
In 4 of 1,539 TEAM hospital and surgery pairs, the stay alone costs more than the target
Kent Applied, TEAM position report and method; CMS, TEAM PY1 preliminary target prices; CMS, Medicare Inpatient Hospitals by Provider and Service, 2024; CMS, TEAM episode construction specifications; CMS, payment standardization method - From research
Readmissions cost all payers up to $44 billion; Medicare's cost is put at $15 to 26 billion
Perspectives in Health Information Management (2016), where the $44 billion is quoted; Harvard Kennedy School, Transitional Care Models for the Elderly (2015); Kent Applied, Where healthcare AI has proof, and where it does not
Sources for the figures above: Rate of initial denials of medical insurance claims continued to rise in 2024, Kodiak Solutions proprietary data show (opens in a new tab); Perspectives in Health Information Management (2016), where the $44 billion is quoted (opens in a new tab); Harvard Kennedy School, Transitional Care Models for the Elderly (2015) (opens in a new tab).
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