Transforming Episode Accountability Model (TEAM)

The proposed mandatory Transforming Episode Accountability Model (TEAM) would advance the Innovation Center’s prior work on episode-based alternative payment models, including the Bundled Payments for Care Improvement Advanced and Comprehensive Care for Joint Replacement Models. The proposed model would launch on January 1, 2026, and run for five years, ending on December 31, 2030. Prior to the model launch, all model policies would be finalized through rulemaking. TEAM was designed based on lessons learned from previous episode-based payment models and from input from stakeholders in response to a Request For Information published in 2023.

Model Overview

The proposed Transforming Episode Accountability Model (TEAM) would be a mandatory episode-based alternative payment model in which selected acute care hospitals would coordinate care for people with Traditional Medicare who undergo one of the surgical procedures included in the model (initiate an episode) and assume responsibility for the cost and quality of care from surgery through the first 30 days after the Medicare beneficiary leaves the hospital. As part of taking responsibility for cost and quality during the episode, hospitals would connect patients to primary care services to help establish accountable care relationships and support optimal, long-term health outcomes. The surgical procedures included in the model would be lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedure. For purposes of TEAM, CMS would provide participating hospitals with a target price that would represent most Medicare spending during an episode of care, which would include the surgery (including the hospital inpatient stay or outpatient procedure) and items and services following hospital discharge, such as skilled nursing facility stays or provider follow-up visits. Holding individuals accountable for all the costs of care for an episode may incentivize care coordination, improve patient care transitions, and decrease the risk of avoidable readmission. In addition, TEAM includes a proposed voluntary Decarbonization and Resilience Initiative, through which CMS would assist individuals in increasing quality of care by addressing threats to patient health and the health care system presented by climate change.

Highlights

  • People with Traditional Medicare who undergo surgery may experience fragmented care, which can lead to complications, prolonged recovery, or potentially avoidable care.
  • The mandatory Transforming Episode Accountability Model (TEAM) would aim to improve the patient experience from surgery through recovery by supporting the coordination and transition of care between providers and promoting a successful recovery that can reduce avoidable hospital readmissions and emergency department use. TEAM episodes would begin with lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedures.
  • All hospitals selected to participate in TEAM would be required to refer patients to primary care services to support patient continuity of care and positive long-term health outcomes.
  • Health equity would be a priority in TEAM. The model would offer certain flexibilities, such as allowing safety net hospitals to participate in a track with lower levels of risk and reward and a pricing methodology that includes adjustments to account for underserved individuals.

Model Purpose

People with Traditional Medicare undergoing a surgical procedure either in the hospital or as an outpatient may experience fragmented care that can lead to complications in recovery, avoidable hospitalization, and other high costs. This is because in a fee-for-service (FFS) payment system, providers and suppliers are paid separately for each service and procedure, potentially resulting in fragmented care, duplicative use of resources, and avoidable utilization. TEAM would test an episode-based payment approach in which the selected acute care hospitals would receive a target price to cover all costs associated with the episode of care, including the cost of the hospital inpatient stay or outpatient procedure and items and services following hospital discharge, such as skilled nursing facility stays or provider follow-up visits. Through the target price, CMS would hold individuals accountable for spending and quality performance, which can motivate health care providers to better coordinate care and improve the quality of care. TEAM could benefit people with Traditional Medicare who receive one of the included surgical procedures by potentially improving care transitions, encouraging provider investment in health care infrastructure and redesigned care processes, and incentivizing higher value care across the inpatient and post-acute care settings for the episode. Five different surgical procedures would be included in TEAM: lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedure.

Model Design

TEAM Model infographic describing the episode components and goals of the model
(PDF)

TEAM would be a five-year, mandatory episode-based payment model that would start in January 2026. Hospitals required to participate would be based on selected geographic regions, Core-Based Statistical Areas (CBSAs), from across the United States. The proposed TEAM design includes a one-year glide path, which would allow individuals to ease into full financial risk. TEAM would have three participation tracks: Track 1 would have no downside risk and lower levels of reward for the first year; Track 2 would be associated with lower levels of risk and reward for certain hospitals, such as safety net hospitals, for years 2 through 5; and Track 3 would be associated with higher levels of risk and reward for years 1 through 5.

Episodes would begin with a hospital inpatient stay or a hospital outpatient procedure for one of the following surgical procedures: lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedure. Each episode would end 30 days after the individual leaves the hospital.

The mandatory hospital individuals would continue to bill Medicare FFS as usual but would receive target prices for included episodes prior to each performance year. Target prices would be based on all non-excluded Medicare Parts A & B items and services included in an episode and would be risk-adjusted based on beneficiary-level factors. Performance in the model would be assessed by comparing the hospitals’ actual Medicare FFS spending for the episode to their target price, as well as through an assessment of performance on three quality measures: hospital readmission, patient safety, and patient-reported outcomes. Hospitals may earn a payment from CMS, subject to a quality performance adjustment, if the total Medicare costs for the episode are below the target price. Hospitals may owe CMS a repayment amount, subject to a quality performance adjustment if the total Medicare costs for the episode are above the target price.

Notably, and consistent with the CMS Innovation Center strategy to drive accountable care and integrate specialty care and primary care, the model is designed to complement longitudinal care management through policies that align with Accountable Care Organizations (ACO) and promote primary care referral. Under TEAM, a person receiving care from (aligned to) providers in an ACO would still be able to be in an episode if they receive one of the surgeries included in TEAM at a hospital that is selected to participate in TEAM. Allowing a person with traditional Medicare to be included in both TEAM and ACO initiatives would help to promote provider collaboration to find opportunities to improve quality of care and reduce Medicare spending. Also, TEAM would require hospitals to refer patients to primary care services to support continuity of care and positive long-term health outcomes.

Health Equity Strategy

TEAM would support CMS’ broader efforts to promote health equity to ensure all populations can achieve optimal health through increasing access to quality care. The model would offer certain flexibilities to help hospitals that care for a higher proportion of underserved individuals, such as safety net hospitals, by reducing the financial burden sometimes associated with value-based model participation. This includes the option to participate in Tracks 1 and 2 of TEAM, which have lower financial risks and rewards as compared to Track 3, in that the amount of money the participating hospital may be required to repay CMS or earn from CMS is limited. The model’s target pricing methodology would also include a social risk adjustment to ensure target prices properly reflect the additional financial investment needed to care for underserved individuals. To address disparities and support continuous quality improvement, participating hospitals would submit health equity plans to CMS and report sociodemographic data to CMS.  Participants would also be required to screen individuals for health-related social needs.

Decarbonization and Resilience Initiative

TEAM would also support CMS and HHS efforts to improve quality of care by bolstering the health system’s climate resilience and sustainability by assisting individuals in addressing threats to patient health and the health care system presented by climate change. CMS would allow participating hospitals to voluntarily report metrics related to greenhouse gas emissions to CMS, and CMS would provide individualized feedback reports as well as public recognition of participation and potential performance in the initiative to individuals. Further, participating hospitals would have access to technical assistance and learning systems to help enhance organizational sustainability, support care delivery methods that may lower greenhouse gas emissions, and identify tools to measure emissions.

Additional Information

Outreach

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