2026 IPPS final rule: TEAM = full steam ahead, Medicare/MA rules consolidation continues, and CC/MCC changes

By Brian Murphy

The IPPS 2026 final rule is out… are you ready for some TEAM-work?

(ahem)

Dad joke aside, the big news IMO is the finalization of a few tweaks to the TEAM model, which is moving full steam ahead for Jan. 1, 2026 implementation. I’ve included a links below for further reading on this important new initiative.

The other big news is CMS continues to merge Medicare Advantage (MA) with traditional Medicare.

TEAM tweaks

Due to space limits I can’t recap this large and complex program. Links are below. But CMS made a few tweaks, including allowing for capture of quality measure performance using patient-reported outcomes in the outpatient setting (without increasing participant burden), improving target price construction, and broadening the three-day SMF Rule waiver, giving patients more choice and access to post-acute care.

The big unspoken news is the Jan. 1 implementation date has not changed.

Hospital Inpatient Quality Reporting (IQR) Program changes

CMS is finalizing the modification of four current measures:

• Hospital-Level, Risk-Standardized Complication Rate (RSCR) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) to add MA patients to the current cohort of patients and shorten the performance period from 3 years to 2 years. CMS is also using ICD-10 codes instead of HCCs in the model
• Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following Acute Ischemic Stroke Hospitalization with Claims-Based Risk Adjustment for Stroke Severity to add MA patients to the current cohort of patients and shorten the performance period from 3 years to 2 years. As above, ICD-10 replaces HCCs.
• Hybrid Hospital-Wide Readmission (HWR) AND Hybrid Hospital-Wide Mortality (HWM) measures to lower the submission thresholds to allow for up to two missing laboratory results and up to two missing vital signs, and reduce discharge threshold to 70%.

CMS is also removing four measures related to COVID-19, health equity, and SDOH.

Many new CCs

Too many to list. Here’s a few, but check out table 6J.1 for the full listing:

• E72.530, Primary hyperoxaluria, type 1, as well as E72.538 and E72.539
• E83.820, Generalized arterial calcification of infancy with unspecified genetic causality and others in the E83 series
• I27.840, Fontan-associated liver disease [FALD]
• Many in the L98 series (non-pressure chronic ulcers)
• Several Q89-99 named syndromes including Kabuki, CTNNB1, usher, and more
• A0.0159 Neurodevelopmental disorder

CMS deleted a couple CCs, including E72.53, Primary hyperoxaluria (no type specified) and Q89.8, Other specified congenital malformations (no name specified), attesting to the need for specificity.

A couple new MCCs

• N00.B1: Acute nephritic syndrome with idiopathic immune membranoproliferative glomerulonephritis (IC-MPGN) and N00.B2 added to the list. I’m not a clinician so don’t ask me any questions about this dx. 😊
• Many codes in the S31 series related to open wounds in the abdominal wall.

Hospital Readmissions Reduction Program

An important change here: CMS is modifying the six readmission measures to add MA data and shorten the “applicable period” for measuring performance from three to two years.

Everything in the rule is effective Oct. 1 of this year unless otherwise noted.

Reference

• CMS, FY 2026 IPPS Final Rule Home Page: https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2026-ipps-final-rule-home-page
• CMS, Transforming Episode Accountability Model (TEAM): https://www.cms.gov/priorities/innovation/innovation-models/team-model
• Norwood, What actually passed with the new TEAM model in 2025 IPPS final rule? https://www.norwood.com/what-actually-passed-with-the-new-team-model-in-2025-ipps-final-rule/