CMS finalized the mandatory five-year Transforming Episode Accountability Model (TEAM) starting January 1, 2026, covering five surgical episodes with 30 days of post-acute care. The model aims to improve care quality, reduce rehospitalization and recovery time, lower Medicare spending, and drive equitable outcomes for beneficiaries undergoing high-expenditure, high-volume surgical procedures. It is a key part of CMS's strategy to move 100% of Medicare beneficiaries into accountable care arrangements by 2030, replacing the expiring CJR and BPCI Advanced models.
Key Features and Requirements:
- Mandatory Participation: ACHs within selected 188 CBSAs (23.4% of eligible CBSAs) are required to participate, including safety net, rural, Medicare-dependent, sole community, and essential access care hospitals. A one-year glide path is provided to ease financial risk, with Track 1 offering limited downside risk for the first performance year (PY).
- Participation Tracks: Participants can choose between four tracks based on financial risk and quality score adjustments, with safety net hospitals having extended options.
- Episode Selection: TEAM includes five episodes: Lower extremity joint replacements (LEJR), Coronary artery bypass grafting (CABG), Surgical hip and femur fracture treatment (SHFFT), Spinal fusion (FUSION), and Major bowel procedures (BOWEL). These episodes represent approximately 1.9% of Medicare FFS spending in 2021.
- Episode Length: The 30-day post-acute period is shorter than in previous models, focusing on the most intensive care period while promoting collaboration between ACHs and ACOs.
- Eligibility Criteria: Episodes are for Medicare Part A and B beneficiaries not enrolled in managed care, with specific exclusions for certain conditions and beneficiaries.
- Performance Measurement: Participant performance is evaluated against quality measures and financial benchmarks.
- Quality Measures: A mix of existing and new measures focusing on care coordination, patient safety, and patient-reported outcomes, with a composite quality score (CQS) up to 10% adjusting payments/repayments.
- Financial Metrics: Target prices are based on a three-year weighted regional baseline, with risk adjustment for beneficiary, hospital, and episode characteristics. A discount factor of 1.5-2% is applied.
- Reconciliation: A single annual reconciliation process occurs in the fall, with payments/repayments adjusted based on CQS and stop gain/loss thresholds.
- Downstream Provider Arrangements: Participants can share payments/repayments with downstream providers to incentivize cost reduction and quality improvement.
Support for Participants:
Potential participants are advised to seek external support for CMS bundled payment expertise, analytics, and benchmarks to navigate the model and achieve success.
Conclusion:
TEAM represents a significant shift in Medicare payment models, impacting a broad range of ACHs and promoting value-based care across acute and post-acute settings. Its mandatory nature, combined with the focus on quality and cost reduction, will require careful planning and collaboration among healthcare providers to succeed.
