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CMS Announces Proposed Mandatory Episode-Based Payment Model

See how the CMS proposal may impact your healthcare organization.
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In an effort to increase provider participation in value-based care initiatives and advance their comprehensive specialty strategy, CMS has proposed the Transforming Episode Accountability Model (TEAM), a mandatory episode-based alternative payment model aimed to address fragmented care potentially experienced by Traditional Medicare surgical patients. Mandated participants (IPPS hospitals) would be accountable for ensuring Medicare FFS patients receive coordinated, high-quality care during and after defined surgical procedures. 

An estimated 25% of core-based statistical areas will be selected for this mandated model with certain market characteristics increasing the chances of being selected up to 50%. Specific geographies included in TEAM will be announced in the final rule in 2024.

Key Proposed Considerations

  • TEAM is a five-year mandatory model that would begin on January 1, 2026 and end on December 31, 2030.
  • IPPS hospitals located in selected geographies will bear the financial risk with a gradual glidepath from 0% downside in 2026 to 20% in subsequent years. Some hospitals will qualify for a 10% downside risk cap based on specific characteristics.
  • 30-Day Surgical Episodes include:
    • Lower Extremity Joint Replacement (Inpatient and Outpatient)
    • Surgical Hip & Femur Fracture Treatment (Inpatient)
    • Coronary Artery Bypass Graft (CABG) Surgery (Inpatient)
    • Spinal Fusion (Inpatient and Outpatient)
    • Major Bowel Procedure (Inpatient)
  • Nearly all Parts A and B services will be included in patient expenditure calculations; this includes post-acute care, readmissions, and physician services, among others.
  • Target prices will be set at the regional level for each DRG/HCPCS, with additional patient-level adjustments for age, chronic conditions, and social risk factors.
  • Attribution to (or participation in) an accountable care organization (ACO) will not change TEAM participation or financial responsibility. As proposed, beneficiaries can be attributed to ACOs and TEAM episodes simultaneously.
  • Quality measures will be linked to financial gains and losses in TEAM. Measures include:
    • Hybrid All-Cause Readmission Measure
    • CMS PSI-90
    • LEJR Patient Reported Outcomes

How FORVIS Can Help

Since 2012, FORVIS has helped hundreds of hospitals and physician practices navigate alternative payment model (APM) participation, strategies, and financial opportunities. Many of our clients have achieved significant financial rewards in APMs and continue to look for new bundled payment opportunities. Our team of experienced consultants is prepared to help interested organizations in the following ways:

  • Specialist engagement and alignment
  • Current state assessment with data-driven opportunities
  • TEAM operational governance and structure
  • Specific strategy development including care pathways, discharge protocols, waiver utilization guidelines, patient identification algorithms, and post-acute networks
  • Gainsharing development and implementation
  • Ongoing monitoring of financial and clinical performance

For questions or to learn more, reach out to a professional at FORVIS.

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