Hospitals have spent years building documentation, coding, utilization review (UR), and quality programs around the inpatient encounter. The chart was reviewed, coded, billed, audited, appealed, and measured largely within a hospital’s four walls.
That framework is no longer enough.
With the Transforming Episode Accountability Model, known as TEAM, and the proposed Comprehensive Care for Joint Replacement Expanded Model, known as CJR-X, the Centers for Medicare & Medicaid Services (CMS) is continuing to move hospitals deeper into episode-based accountability. These models do not simply involve asking whether the procedure was coded correctly or whether the inpatient admission met criteria, but whether the entire episode of care was coordinated, clinically supported, risk-adjusted, and defensible across settings.
For clinical documentation integrity (CDI), coding, UR, quality, case management, revenue cycle, and physician advisor teams, this is a major signal. Documentation integrity is no longer just a back-end billing function; it must be built into the surgical pathway from the beginning.
TEAM is already underway. CMS describes TEAM as a mandatory, five-year episode-based payment model running from Jan. 1, 2026 through Dec. 31, 2030, for selected acute-care hospitals in selected Core-Based Statistical Areas.¹ TEAM applies to original Medicare beneficiaries undergoing one of five surgical categories: lower extremity joint replacement, surgical hip and femur fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedures.¹
Each episode begins with the hospital inpatient stay or hospital outpatient procedure and extends through 30 days after the patient leaves the hospital.¹ That matters because the hospital’s accountability does not stop when the patient is discharged; it follows the patient into the post-acute recovery period.
CJR-X is different, but the direction is the same. CMS proposed CJR-X in the Inpatient Prospective Payment System (IPPS) proposed rule for the 2027 fiscal year (FY).²³ If finalized as proposed, CJR-X would expand the prior Comprehensive Care for Joint Replacement model and would begin Oct. 1, 2027.²³ The model would focus on original Medicare beneficiaries undergoing hip, knee, and ankle replacements (also called lower-extremity joint replacements) in the inpatient and hospital outpatient settings.²³
CJR-X would use a longer episode window than TEAM. CMS states that CJR-X would hold participating hospitals accountable for lower-extremity joint replacement episodes, beginning with the procedure and ending 90 days after discharge from inpatient hospitalization or after an outpatient procedure.² CMS also notes that hospitals participating in TEAM would be excluded from CJR-X while TEAM is active.²
For CDI and coding teams, the message is clear. The coded claim still matters, but the larger question is whether the documentation supports the full story of the episode.
That story starts before the procedure. It includes why the patient required surgery, whether inpatient or outpatient care was appropriate, what comorbid conditions increased risk, what complications occurred, what monitoring and treatment were required, what discharge needs existed, and whether the recovery plan was coordinated after discharge.
For CDI professionals, this means the documentation opportunity is not limited to capturing complications and comorbidities or major complications and comorbidities (CCs and MCCs). Accurate severity-of-illness and risk adjustment still matter. But under episode-based models, documentation must also explain why the patient used the resources they did.
A lower-extremity joint replacement patient with chronic kidney disease, heart failure, morbid obesity, diabetes with complications, chronic respiratory disease, malnutrition, frailty, baseline functional limitation, chronic anticoagulation, or poor social support is not the same episode as a healthier patient undergoing the same procedure. The procedure may look similar, but the risk is not.
The documentation must make that difference visible.
This does not mean querying for diagnoses not clinically supported. In fact, these models make clinical validation even more important. If a diagnosis is coded but not substantiated, it creates risk. If a complication is labeled inaccurately, it creates quality risk. If a clinically significant condition is never documented, the record may understate the patient’s complexity.
The goal is not to make the patient chart look “sicker,” but rather to ensure that the record accurately reflects the patient’s condition, treatment, risks, and resource needs.
Coding teams also play a critical role. Episode models depend on accurate identification of the anchor procedure, correct claim assignment, appropriate reporting of secondary diagnoses, and careful distinction between expected postoperative findings and reportable complications.
Coders need clear documentation to distinguish acute blood loss anemia from expected blood loss, postoperative respiratory failure from routine ventilatory support, acute kidney injury from mild transient creatinine changes, and true surgical complications from clinically insignificant findings.
This is where coding and CDI must be tightly aligned. The question cannot be limited to “will this change the DRG?” The better question is, “does the record accurately and defensibly explain this patient’s episode of care?”
UR and physician advisor teams must be part of the same conversation. TEAM and CJR-X both include hospital outpatient procedures, and TEAM also includes inpatient stays.¹² That brings status integrity, medical necessity, and site-of-service documentation directly into the episode accountability discussion.
For planned procedures, the record should support why the selected setting was appropriate. If inpatient status is used, the documentation should explain the patient-specific risk factors, expected intensity of services, anticipated monitoring needs, or clinical barriers that make outpatient management inappropriate.
For urgent or emergent cases, such as hip-fracture repair, the record should clearly describe the acute event, baseline function, comorbidities, perioperative risk, and discharge barriers. These cases are often complex, yet the documentation may remain procedure-focused. If the record only portrays the procedure details the patient’s true severity and resource needs may be lost.
Case management and post-acute partners are just as important. TEAM requires hospitals to refer patients to primary care services to support continuity of care and long-term outcomes.¹ CJR-X is designed to encourage coordination across settings, including transitions from hospitalization or an outpatient procedure through recovery.²
That means that discharge disposition, home health, skilled nursing facility (SNF) placement, rehabilitation needs, durable medical equipment (DME), follow-up appointments, medication changes, caregiver support, and primary care connection all can influence the episode outcome.
Poor transitions can lead to avoidable emergency department visits, readmissions, complications, and increased costs. Strong transitions can support safer recovery and better performance under episode-based accountability.
Quality teams must also be at the table. TEAM quality scoring uses selected measures related to care coordination, patient safety, and patient-reported outcomes. CMS has stated that these measures are used to calculate the Composite Quality Score, which then adjusts TEAM reconciliation amounts based on quality performance.⁴
CJR-X also ties quality to payment. CMS describes a “quality-first principle,” meaning hospitals would need to meet a minimum episode quality level before receiving reconciliation payments. The proposed CJR-X quality measures include complication rate, outpatient hospital visits after surgery, Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS), Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS), and patient-reported outcome performance measures.²
This is why documentation accuracy matters beyond reimbursement. Documentation that misclassifies complications, misses present-on-admission conditions, fails to describe clinical context, or does not support the patient’s risk profile can affect both payment and quality interpretation.
The biggest mistake hospitals can make is treating TEAM and CJR-X as finance-only initiatives.
Finance may calculate exposure. Analytics may identify included cases. But the work of succeeding under these models sits inside clinical documentation, coding accuracy, care coordination, medical necessity, discharge planning, physician engagement, quality review, and denial prevention.
Hospitals should begin by establishing a cross-functional episode-accountability workflow. The first step is early case identification. Scheduling, surgery, registration, CDI, coding, UR, case management, quality, revenue cycle, and analytics need to know which cases trigger the model, which patients are included, whether the case is inpatient or outpatient, and where the patient is in the episode timeline.
The second step is creating a documentation-focused list for high-risk episode populations. For joint replacement, this may include obesity, diabetes complications, chronic kidney disease, heart failure, chronic lung disease, anemia, malnutrition, frailty, pressure injury risk, anticoagulation issues, prior falls, baseline mobility, and post-acute care needs.
For coronary artery bypass grafting (CABG), documentation should clearly support cardiac acuity, heart failure status, arrhythmia, renal function, shock, respiratory complications, vascular disease, and postoperative events.
For major bowel procedures, teams should watch for sepsis, perforation, obstruction, malnutrition, ostomy status, ileus, acute kidney injury, anemia, infection-related complications, and postoperative recovery barriers.
The third step is aligning query practices with compliance. Queries should remain clinically supported, nonleading, and focused on clarity in documentation. Under episode models, CDI teams should not query only when there is a potential DRG impact. They should also consider whether documentation affects severity, risk adjustment, quality interpretation, medical necessity, discharge planning, and audit defensibility.
The fourth step is strengthening provider education. Surgeons and proceduralists may not think in terms of episode spending, post-acute accountability, quality scoring, risk adjustment, or denial exposure. Education should be practical. Document the reason for the procedure, why the setting was appropriate, patient-specific risk factors, baseline function, complications when they occur, clinically significant comorbidities, and the rationale for post-acute needs.
The message should not be “document more,” but rather “document the clinical reasoning that explains this patient’s episode.”
The fifth step is creating a concurrent or pre-bill review process for high-risk episodes. Hospitals should consider focused review before final billing when there are significant complications, unexpected readmissions, high-cost post-acute use, unclear status, conflicting documentation, or diagnoses that may be vulnerable to clinical validation review.
This is especially important when the record includes terms such as postoperative, expected, complication, clinically insignificant, acute, chronic, resolved, history of, or due to. Those words can change coding, quality, medical necessity, and denial exposure.
Finally, hospitals need metrics. Episode accountability should be tracked by service line, provider, procedure category, payer, discharge disposition, readmissions, emergency department use, complications, query trends, denial trends, medical necessity issues, and documentation gaps.
Without data, organizations will not know whether they have a documentation problem, a coding problem, a care transition problem, a utilization problem, a quality problem, or all of the above.
CMS has reported that the prior CJR model generated $112.7 million in Medicare savings while maintaining quality for more than 98,000 knee and hip replacement patients across 323 hospitals from 2021 through 2023.⁵ CMS also stated that lessons learned from CJR informed the design of TEAM.⁵
That should get our attention.
TEAM and CJR-X are not just payment models, but a preview of where documentation integrity is headed. Hospitals are increasingly accountable for what happens before admission, during the stay, after discharge, and across recovery.
For CDI and coding professionals, this is an opportunity to lead. We understand how clinical language becomes coded data. We understand how documentation affects severity, quality, reimbursement, denials, public reporting, and resource utilization. We also understand the risk of getting it wrong.
The organizations that perform well under episode-based models will not be the ones that chase codes at the end of the stay. They will be the ones who build documentation integrity into the surgical pathway from the beginning.
The future of episode accountability is not just bundled payment. It is a bundled responsibility. CDI, coding, UR, quality, case management, revenue cycle, and physician advisors all own a piece of that story.
References
- Centers for Medicare & Medicaid Services. TEAM (Transforming Episode Accountability Model). CMS. Updated May 12, 2026. Accessed June 18, 2026. https://www.cms.gov/priorities/innovation/innovation-models/team-model
- Centers for Medicare & Medicaid Services. CJR-X (Comprehensive Care for Joint Replacement Expanded) Model. CMS. Updated April 14, 2026. Accessed June 18, 2026. https://www.cms.gov/priorities/innovation/innovation-models/cjr-x
- Centers for Medicare & Medicaid Services. FY 2027 Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital Prospective Payment System (LTCH PPS) Proposed Rule—CMS-1849-P. CMS. Published April 10, 2026. Accessed June 18, 2026. https://www.cms.gov/newsroom/fact-sheets/fy-2027-hospital-inpatient-prospective-payment-system-ipps-long-term-care-hospital-prospective
- Centers for Medicare & Medicaid Services. Quality Scoring in the Transforming Episode Accountability Model (TEAM). CMS; September 2025. Accessed June 18, 2026. https://www.cms.gov/files/document/team-qualityscoring-fs.pdf
- Centers for Medicare & Medicaid Services. Innovation Insight: Comprehensive Care for Joint Replacement (CJR) Model Generates Savings to Medicare. CMS. Published December 3, 2025. Accessed June 18, 2026. https://www.cms.gov/priorities/innovation/innovation-insight-comprehensive-care-joint-replacement-cjr-model-generates-savings-medicare
