TEAM Decarbonization and Resilience Initiative

Fact Sheet

Overview

The CMS Innovation Center’s voluntary Decarbonization and Resilience Initiative is designed to address threats posed by climate change to the nation's health and health care system by collecting, monitoring, assessing, and addressing hospital carbon emissions and their effects on health outcomes, costs, and quality. The voluntary Initiative is part of the proposed Transforming Episode Accountability Model (TEAM), which, if finalized, would have a proposed start date of January 1, 2026, and is scheduled to last for five years, ending on December 31, 2030.

This voluntary Initiative is the first time HHS proposes to collect data on health care greenhouse gas emissions. TEAM is the first CMS Innovation Center model to include a decarbonization and climate resilience element. Decarbonization and climate resilience activities may be considered for Innovation Center models in the future, including already announced models. 

Background

The health care industry is a significant source of harmful greenhouse gases. In the United States in 2018, it accounted for an estimated 8.5% of total domestic greenhouse gas emissions. Globally, the health care industry accounts for between 4.4-4.6% of worldwide emissions.

Climate change driven by greenhouse gas emissions threatens patients’ health. Commensurate with expected public health effects of climate change, the Office of Management and Budget estimates that federal climate-related healthcare spending in a few key areas could increase by $824 million to $22 billion dollars by the end of the century. This increase alone would tally up to approximately 1% of additional national health expenditures. The World Health Organization projects 250,000 additional annual deaths by the 2030s due to climate change.  According to the United States’ National Climate Assessment, children, older adults, and low-income communities are disproportionately affected by climate change and pollution;  therefore, the Medicare, Medicaid, and CHIP programs bear much of the medical expenses and caregiving services resulting from emissions.

Reductions in operating costs and spending due to hospital energy efficiency and more efficient health care delivery, including efficient use of anesthetic gases, can directly contribute to savings for Medicare Trust Funds and hospitals. For example, Children’s Mercy Hospital in Kansas City documented a potential $170,000 annual savings from changing the flow rates of anesthetic gases. Gundersen Lutheran documented at least $500,000 to $1 million dollars of energy savings annually from their energy efficiency measures.

The federal government is taking steps to address climate change from a health care perspective. This includes the Department of Health and Human Services’ 2022-2026 strategic plan for addressing climate-related threats to health and the Biden-Harris Administration’s White House-HHS Health Sector Climate Pledge, which invites health sector organizations to align with the Administration’s goals of cutting emissions by 50% by 2030 and achieving net zero emissions by 2050.

Initiative Details

The proposed voluntary Decarbonization and Resilience Initiative would invite acute care hospitals participating in TEAM to identify how they can reduce greenhouse gas emissions and improve patient outcomes. The Initiative would include two elements:

1. Voluntary reporting on emissions. Participants would report metrics in four priority areas: organizational, building energy, anesthetic gas, and transportation. Hospitals will be familiar with these metrics areas, as they broadly align with those collected by the Joint Commission for its Sustainable Healthcare Certification.
2. Technical assistance on reducing emissions. If finalized, TEAM participants who opt in would receive individualized feedback to help improve their decarbonization strategies over time, such as a benchmark comparison of their emissions and an assessment of the potential effectiveness of their decarbonization strategies. Additionally, TEAM participants who opt in to the Initiative may receive CMS recognition for their participation in the Initiative, and potentially their performance, on a public-facing CMS website.

Proposed Reporting Activities at a Glance

Examples of proposed technical assistance offered by CMS as part of Decarbonization and Resilience Initiative

• Support for a greenhouse gas inventory/audit to establish baseline greenhouse gas emissions.
• Support for data collection and tools for implementing emissions measurement activities (data collection, auditing, and reporting).
• Guidance or technical assistance on Inflation Reduction Act funds for decarbonization efforts.
• Guidance or technical assistance for moving away from desflurane to other lower-cost, clinically equivalent, lower carbon anesthetics for surgical episodes like those found in the TEAM model.

For data collection, this Initiative would rely on The Greenhouse Gas Protocol (GHGP), a globally recognized standard used for quantifying and reporting on emissions. The GHGP framework defines three emissions categories referred to as “scopes.” CMS proposes to only collect data related to Scopes 1 and 2 and has issued a Request for Information on Scope 3.

• Scope 1 includes direct GHG emissions derived from sources that are owned or controlled by an organization or company. For health care, Scope 1 includes facility emissions, anesthetic gases, and GHG emissions from leased or owned vehicles.
• Scope 2 includes GHG stemming from purchased electricity that is consumed by an organization, for instance the electricity that powers a hospital. It also includes steam, heat, or cooling consumed by the reporting organization.
• Scope 3 includes other indirect GHG emissions and relates to all other indirect emissions. For health care, Scope 3 may include purchased pharmaceuticals and chemicals, medical devices, medical supplies, food, water, waste, employee and patient transportation, and additional emissions outside of Scopes 1 and 2.

Decarbonization and Resilience Initiative Frequently Asked Questions

1. What is the proposed Decarbonization and Resilience Initiative?

The Decarbonization and Resilience Initiative is a proposed voluntary element of the Transforming Episode Accountability Model (TEAM) designed to assist selected hospitals by collecting, monitoring, assessing, and addressing: 1) the threats of climate change to the nation's health and its health care system and 2) the effects of hospital carbon emissions on health outcomes, health care costs, and quality of care. It would involve voluntary reporting on emissions and technical assistance to help TEAM participants improve their decarbonization strategies over time, including how participating hospitals might identify, pay for, and implement energy efficiency improvements.

2. How would TEAM participants take part in the Initiative?

All TEAM participants would be eligible to take part in the voluntary initiative.

Those who opt to take part would voluntarily report their organization’s annual sustainability commitment and activities, building energy metrics (such as total emissions, energy cost, and energy use intensity), anesthetic gas metrics and answers to related questions, and transportation metrics and answers to related questions.

The building energy metrics for those who voluntarily report would be submitted using ENERGY STAR® Portfolio Manager® and reporting for the other metrics and assessment questions would be submitted via a survey or questionnaire. Data would be reported no later than 120 days after the end of the performance year.

Participants who voluntarily submit data on their decarbonization readiness as it relates to these areas would receive technical assistance to foster their success as well as acknowledgement of their participation in the initiative on a CMS public-facing website.

3. Why is CMS starting this initiative?

Air pollution, including greenhouse gas emissions, makes Americans sick, increases early mortality, and harms economic productivity. Health care sector emissions are a significant contributor to emissions. Many laws, executive orders, and funding initiatives encourage reduction in greenhouse gases. These include the White House’s Executive Order on Tackling the Climate Crisis at Home and Abroad (E.O. 14008) and the White House-HHS Health Sector Climate Pledge, a voluntary commitment launched by the Biden-Harris Administration inviting health sector organizations to align towards climate resilience and emissions reduction.

CMS proposes to collect data on emissions from TEAM participants who choose to participate in the Initiative to monitor and assess data on hospital emissions and their impact on cost and quality, just as CMS monitors for other quality indicators that may impact beneficiary health. In addition to producing potential health improvements, this effort is in line with the Innovation Center’s broader mission as it relates to cost savings. Any reductions in hospital operating costs and spending due to energy efficiency and more efficient health care delivery, especially in the case of anesthetic gases, directly contribute to savings for CMS.

TEAM is the first model to include a decarbonization and climate resilience element. Decarbonization and resilience activities may be considered for additional models in the future.

4. How do anesthetic gases impact climate change?

By some measures, inhaled anesthetics account for 5% of hospital emissions and 3% of national healthcare emissions. Research has shown that low-flow anesthesia techniques are associated with lower costs and reduced emissions, without impacting quality of care or health outcomes.

Such changes to anesthesia techniques would simultaneously lower emissions and reduce costs for Medicare which covers anesthesia services through both Part A and Part B.

5. How did CMS develop the Decarbonization and Resilience Initiative?

The Decarbonization and Resilience Initiative was directly informed by existing decarbonization metrics and programs, consultation with key stakeholders in the field, and responses to two requests for information: the HHS Notice of Benefit and Payment Parameters for 2023 proposed rule and the fiscal year 2023 IPPS/LTCH PPS proposed rule.

6. How does the Decarbonization and Resilience Initiative support TEAM?

Health care as an industry contributes to air pollution and climate change, which in turn impacts the health of Americans, including Medicare and Medicaid beneficiaries, particularly vulnerable patients. In 2018, health care sector greenhouse gas emissions accounted for 8.5% of total U.S. greenhouse gas emissions. By incorporating an emissions reporting system, the Decarbonization and Resilience Initiative is supporting TEAM participants in establishing a baseline understanding of their emissions and how efficiently energy is used in their facilities, potentially leading to improved quality outcomes and reduced expenditures over time.

7. Does the Decarbonization and Resilience Initiative have a timeline?

The Decarbonization and Resilience initiative would be a part of the TEAM model. TEAM is a five-year model that would begin on January 1, 2026, and end on December 31, 2030.

8. What are Scopes 1, 2, and 3 emissions, and why would the Decarbonization and Resilience Initiative not include Scope 3 measures?

The Greenhouse Gas Protocol (GHGP) framework defines three scopes of emissions. Scope 1 includes direct emissions from sources that are owned or controlled by an organization or company, such as direct facilities’ emissions, anesthetic gases, and emissions from leased or owned vehicles. Scope 2 includes indirect emissions from purchased energy, such as purchased or acquired electricity, and steam, heat, or cooling consumed by the reporting organization or company. Scope 3 includes all other indirect emissions. In a 2018 analysis, Scope 1 accounted for 7% of the U.S. National Health Care emissions, Scope 2 accounted for 11%, and Scope 3 accounted for the remaining 82%.

CMS is proposing to start collecting information related to Scopes 1 and 2, as participants in TEAM would have direct visibility into and ability to address these items, and to seek comment on how to standardize and collect Scope 3 information in the future.

9. How can I provide feedback?

CMS encourages comments from the public about the Decarbonization and Resilience Initiative as well as future ideas. Commenters can provide feedback, questions, and comments on the proposed rule until 5 p.m. EDT on June 10, 2024 in one of the following ways. Please refer to file code CMS–1808–P when submitting comments:

1. Electronically. We encourage you to submit electronic comments on this regulation to https://www.regulations.gov/document/CMS-2024-0131-0001. Follow the instructions under the “submit a comment” tab.

2. By regular mail. You may mail written comments to the following address ONLY:  Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–1808–P, P.O. Box 8013, Baltimore, MD 21244–8013.

   Please allow sufficient time for mailed comments to be received before the close of the comment period.

3. By express or overnight mail. You may send written comments via express or overnight mail to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–1808–P, Mail Stop C4–26–05, 7500 Security Boulevard, Baltimore, MD 21244–1850.

10. What if I have additional questions?

The notice in the Federal Register lists CMS points-of-contact for the different topics in the proposal.

11. Where can I learn more?

The HHS Office of Climate Change and Health Equity website provides many useful resources for additional information about climate change, its health effects, and its impact on at-risk populations.

Additional Information

• Transforming Episode Accountability Model (TEAM) web page