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.
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.
Track 2 hospitals are capped at 5%, and Track 1 hospitals repay nothing. CMS can also take back part of unusually high post-episode spending, outside the cap.
Source: 42 CFR 512.550, Reconciliation process and determination of the reconciliation payment or repayment amount (opens in a new tab), 512.550(e)(1) and (e)(3); post-episode spending, 512.550(f). Verified October 2026.
Related charts
- From the blog
A TEAM hospital in Track 3 can owe CMS up to 20% of its total target price in a year
CMS, TEAM Model Overview slides (updated September 2026); 42 CFR 512.550, TEAM reconciliation (eCFR) - 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
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); Rate of initial denials of medical insurance claims continued to rise in 2024, Kodiak Solutions proprietary data show (opens in a new tab).
Related facts
716
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.
KentApplied31
baseline episodes: TEAM's low-volume threshold
CMS holds a TEAM hospital to account for spending over target in a surgery only if it had at least 31 episodes in the three-year baseline.
Source: TEAM Model Overview slides (updated September 2026).
KentApplied4 of 1,539
hospital and surgery pairs where the stay alone exceeds the target
In 4 of 1,539 TEAM hospital and surgery pairs, the hospital stay alone costs more than the 2026 target price, according to Kent Applied's analysis of CMS files.
Source: TEAM position report: where each hospital stands in CMS's TEAM model.
KentApplied
Sources for the figures above: Transforming Episode Accountability Model (TEAM) model page (opens in a new tab); CMS, TEAM Model Overview slides (updated September 2026) (opens in a new tab).
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