The Centers for Medicare & Medicaid Services’ (CMS) in April released a bundled payment model that is the culmination of the best aspects from such past models, all to align with the agency’s efforts to get all Medicare Fee-for-Service beneficiaries involved in value-based care by 2030.
The Transforming Episode Accountability Model, or TEAM, is considered the most significant mandatory bundled payment model to date. This model will cover all costs associated with a 30-day episode of care, including a skilled nursing stay, but hospitals would be in the driver’s seat if approved.
That said, TEAM is bigger than what currently exists, ATI Advisory’s Brian Fuller said, with the new model being a piece of CMS’ goal to get 100% of Medicare FFS beneficiaries in value-based care by 2030.
The model will be focused on five major surgical conditions and start with the acute-care hospital setting. These surgeries include lower extremity joint replacement, coronary artery bypass graft, major bowel procedure, surgical hip or femur fracture treatment, and spinal fusion. Fuller, who is managing director of Value-based Care Design and Delivery at ATI, spoke about the new model as part of a webinar on Tuesday.
Following surgical treatments, recovery in non-hospital settings such as SNFs allow for savings.
“If you’re a non-hospital provider, this is important to you. Where that percentage of [a hospital stay] is high, a hospitalist is likely to be looking outside of the hospital for savings, and trying to find partners, standards of care, ways of working together that look different than it has looked in the past,” said Fuller.
Nursing home operators will be part of the new model as a “collaborator,” if they’re chosen by the hospital in some sort of downstream savings arrangement, said Fuller.
“If you’re an entity out there who’s not a hospital, and you’re comfortable managing episodes of care, you want to position yourself as a high value partner and move down the path of value-based care with your hospital,” advised Fuller.
Episodes of care and bundled payments are used interchangeably, Fuller said, and are part of the Center for Medicare & Medicaid Innovation’s (CMMI) broader alternative payments portfolio.
The TEAM model fits within a range of payment models that have been tested, or are currently ongoing, including the Realizing Equity, Access and Community Health (REACH) model linked to Accountable Care Organizations (ACOs) and which was a precursor to the TEAM model, BPCI. The current BPCIA ends on Dec. 31, 2025, according to Fuller.
“This will be the most significant mandatory bundled payment model we’ve ever seen … All of the big models to date, the Innovation Center’s Bundled Payments for Care Improvement (BPCI) Classic, and BPCI Advanced, have been voluntary,” said Fuller. “We believe that there are some reasons that align with CMMI’s broad goals for why they are making that shift and why now.”
Operators as “collaborators”
ATI provided an episode profile summary for each surgical condition included in the model – the lower extremity joint replacement and hip or femur fracture treatment involve 40% and 63% of total time in a “post-hospital period.”
Hospitals may look at high performing post-acute care networks or care pathways or standards around discharge planning, or those focused on length-of-stay management when choosing “collaborators.”
So, the agreement under TEAM would be between CMS and the hospital, and then the hospital would select operators, or “collaborators,” to manage whatever percentage is needed in the post-acute care setting. A downside risk may be part of such an arrangement with the hospital, he said.
TEAM is set to launch in January 2026 and remains retrospective, the common payment methodology in episodes of care, based on a target price that has a 3% discount – the model will run for 5 years, Fuller said.
In other words, the hospital must perform 3% better for the overall episode of care, and then CMS essentially takes 3% off the top.
“That’s the bad news,” said Fuller. “The good news is this is not a Shared Savings Program. So any dollar after that 3% that gets generated fully accrues to the participants. If you generate $3,000 on your episodes above that 3%, you get all $3,000 to reinvest or to pay yourself back for the quality and care improvement activities that you’ve invested in to generate those results.”
Acute-care hospitals will be the bundler and will maintain full accountability for the spending under this model – it is mandatory for them Fuller said.
“We do not know who is in the model yet. That’s a really important point. We may know upon publication of the final rule, which we expect this summer.”
Hospitals will be selected based on Core-Based Statistical Areas (CBSAs) – CMMI said it plans to select 25% of all CBSAs nationally.
“They’re looking for broad representation across the country, across different market types, geographies, hospital profiles,” said Fuller.
How TEAM fits into CMS’ quality-based initiatives
CMS has made it very clear that TEAM will serve as a “framework” for managing episodes of care moving forward, and the agency hopes this will become a standard practice across traditional Medicare, Fuller said.
In terms of episodes of care success, there have been a lot of evaluations particularly around surgical conditions and high volume medical conditions.
“Of the different program design elements that we’ve tested so far, which are the ones that are showing the most promise, where’s the most success, where are providers responding the most favorably? That’s what [CMS has] used and infused into TEAM,” said Fuller. “[SNFs] should pay close attention, because that framework, I think, is important for participation in this model.”
CMS is intentionally allowing a lot of overlap with other bundled payment models, including existing ACOs or ACO REACH, mainly because the agency is testing how bundles or episodes of care work alongside each other for a total cost of care.
“An entity, a beneficiary that is attributed to an MSSP and REACH and triggers a bundle under TEAM will be able to be in both simultaneously – and they will calculate the savings under both,” said Fuller. What will be excluded are any payments made to or from.”
In other words, if there’s a savings payment from CMS for a beneficiary under TEAM, that won’t count against the ACO. Conversely, if there are losses and the TEAM hospital owes CMS money, that will not net out any funding from the ACO.
“The thinking there is to try to build as much collaboration across all these models, all these participants as possible,” he said.
The only caveat here is that once you’re in, you’re in for the full five years of the model, he said. Beneficiaries that are able to participate must be enrolled in Medicare Part A and B, and have Medicare as their primary payer.
Meanwhile, beneficiaries are unable to participate in the model if they’re enrolled in any managed care plan, including Medicare Advantage, are covered under United Mine Workers of America health plan, or are eligible for Medicare due to end-stage renal disease, he said.
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