CMS Payment Policy Briefing

On July 31, 2026, CMS released the fact sheet for the FY 2027 IPPS/LTCH final rule (CMS-1849-F), and the rule published in the Federal Register on August 4, 2026. Two changes redraw the bundled payment landscape for every acute care hospital. First, the Transforming Episode Accountability Model (TEAM), originally finalized in the FY 2025 IPPS final rule, expands its spinal fusion episode definitions and refines episode pricing and attribution. Second, the Comprehensive Care for Joint Replacement (CJR) model goes national, with mandatory participation beginning January 1, 2028. Episode accountability is no longer optional, and it is no longer regional.

CMS-1849-F FY 2027 IPPS/LTCH final rule, fact sheet issued July 31, 2026

Aug 4, 2026 Federal Register publication of the final rule

Jan 1, 2028 Mandatory CJR participation begins nationwide

The map that changes: CJR goes from selected markets to the whole country

CJR has always been a geography story. Hospitals inside its selected metropolitan markets lived with episode accountability for joint replacement, while hospitals outside those markets watched from a distance. The FY 2027 final rule ends that split. From January 1, 2028, mandatory CJR participation applies nationally. There is no longer a version of the map where your hospital sits outside the model.

Prior CJR footprint, selected metropolitan markets Mandatory nationwide footprint from January 1, 2028

Stylized illustration. Gold markers represent the model's earlier selected-market design; the full field represents the nationwide mandate finalized in CMS-1849-F.

Two mandatory tracks, one build timeline

Hospitals now face two mandatory bundled payment tracks running in parallel. TEAM is already live and gets bigger under FY 2027 through its expanded spinal fusion episodes. CJR arrives everywhere on a fixed date. The dates below set the build clock.

TEAM FY 2025 IPPS final rule

CMS finalizes TEAM, a mandatory episode accountability model covering surgical episode categories including lower extremity joint replacement, spinal fusion, coronary artery bypass graft, surgical hip and femur fracture treatment, and major bowel procedures.

RULE July 31, 2026

CMS issues the fact sheet for the FY 2027 IPPS/LTCH final rule (CMS-1849-F): TEAM spinal fusion episodes expand, pricing and attribution are refined, and CJR is nationalized.

RULE August 4, 2026

The final rule publishes in the Federal Register. The policies are no longer proposals; they are the operating environment.

TEAM FY 2027

Expanded spinal fusion episode definitions and refined pricing and attribution apply inside TEAM, widening the volume of inpatient stays that open an episode.

CJR January 1, 2028

Mandatory CJR participation begins nationwide. Every hospital performing covered joint replacement episodes is in the model from this date.

What FY 2027 changes inside TEAM

Scope

Spinal fusion episodes expand

The final rule broadens the spinal fusion episode category, so more inpatient spine stays now open a TEAM episode. Hospitals that sized their TEAM exposure on the FY 2025 definitions need to re-run that analysis against the FY 2027 rule.

Dollars

Pricing methodology refined

CMS refines how episode target prices are constructed. Because reconciliation compares actual episode spend to those targets, pricing mechanics decide whether an episode earns or owes. Finance teams should model the refined methodology, not last year's.

Ownership

Attribution refined

The rule also refines how episodes attach to hospitals. Attribution determines which facility carries each episode's spend, so getting it wrong misstates your risk position before a single claim is worked.

Episode data just became revenue cycle data

Under voluntary models, episode analytics were a strategy exercise. Under two mandatory models, they are revenue cycle inputs with reconciliation dollars attached. The pipeline every participating hospital needs looks like this.

Episode trigger capture

Identify anchor stays that open a TEAM or CJR episode at coding time, not months later at reconciliation.

Post-acute cost visibility

Track skilled nursing, home health, and rehab utilization inside the episode window, because that spend counts against your target price.

Reconciliation-ready ledger

Maintain a running episode ledger so reconciliation results are a confirmation, not a surprise line on the income statement.

The operator to-do list

NowRead the CMS-1849-F fact sheet and the Federal Register text against your own service lines. Confirm which of your inpatient spine volumes fall under the expanded TEAM spinal fusion definitions.
Q4 2026Rebuild your TEAM exposure model on the refined pricing and attribution methodology, and baseline historical episode spend for every category you touch.
Q1 2027Stand up post-acute data feeds. Skilled nursing, home health, and inpatient rehab utilization must flow into the revenue cycle stack, not sit in a quarterly analytics report.
Q2 2027Build episode-level dashboards that show open episodes, spend against target, and projected reconciliation position, refreshed on the same cadence as your AR reporting.
Q3 2027Dry-run CJR on your own historical joint replacement claims. Find the gaps in trigger capture, attribution, and post-acute visibility while they are still free to fix.
Jan 1, 2028Go live with day-one CJR episode tracking. Mandatory participation starts whether the build is finished or not.

Sources

FY 2027 IPPS/LTCH final rule, CMS-1849-F, CMS fact sheet, July 31, 2026.
Federal Register, FY 2027 IPPS/LTCH final rule publication, August 4, 2026.
FY 2025 IPPS final rule, in which CMS originally finalized the Transforming Episode Accountability Model (TEAM).

Build the episode layer before the mandate builds it for you

ASP-RCM Solutions builds episode-aware revenue cycle operations for hospitals facing TEAM and CJR: anchor-stay trigger capture inside coding workflows, post-acute cost feeds wired into daily revenue cycle reporting, and reconciliation-ready episode ledgers your CFO can trust. The distance between August 4, 2026 and January 1, 2028 is your entire build window. Use it.

Talk to our CMS payment team