How TEAM will work

TEAM is a mandatory bundled payment program that will begin on Jan. 1, 2026. According to CMS, TEAM aims to improve quality and reduce costs by promoting care coordination.

"People with traditional Medicare who undergo a surgical procedure in a hospital or hospital outpatient department may experience fragmented care that can lead to complications in recovery, avoidable hospitalization and increased spending," a CMS spokesperson said.

Specifically, TEAM will apply to episodes including lower extremity joint replacements, surgical hip femur fracture treatments, spinal fusions, coronary artery bypass grafts, and major bowel procedures.

Selected acute-care hospitals will coordinate care for Medicare beneficiaries who undergo one of the episodes included in the model and will assume responsibility for the cost and quality of care, from surgery through the first 30 days after the patient leaves the hospital.

All hospitals participating in TEAM will be required to refer patients to primary care services to support continuity of care and positive long-term health outcomes.

According to the Center for Medicare & Medicaid Innovation (CMMI), TEAM will be mandatory for selected hospitals based on core-based statistical areas (CBSAs), covering over 200,000 episodes annually. Other hospitals will be able to voluntarily participate in TEAM if they are current participants in the BPCI-A or CJR models.

TEAM will have three tracks:

• Track 1, which will have no downside risk and lower levels of reward for the first year
• Track 2, which will be associated with lower levels of risk and reward for certain hospitals, including safety net hospitals, for years two through five
• Track 3, which will be associated with higher levels of risk and reward for the entire five-year length of the model

What experts are saying about TEAM

ATI Advisory's Brian Fuller said that TEAM 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," Fuller added. "We believe that there are some reasons that align with CMMI's broad goals for why they are making that shift and why now."

A number of hospital groups have argued that a mandatory bundled payment program could prove overly burdensome for an industry that is already working on implementing other CMS reimbursement programs.

"An organization could be undergoing transformation of their entire payment system under a hospital global budget while also implementing a mandatory bundled payment model and a mandatory transplant model in less than a year and a half, which is simply untenable," said Jennifer Holloman, senior associate director of policy at the American Hospital Association (AHA).

"Model overload comes into play where hospitals could be in multiple models, and they may already be participating in another accountable care organization model or another type of initiative, and now you have these mandatory models that are placed on top of them," said Jeffrey Davis, health policy director for McDermott+Consulting.

AHA also expressed concerns about TEAM's mandatory nature. "This means that many organizations may not be of an adequate size or in a financial position to support the investments necessary to transition to mandatory bundled payment models," AHA said. "Requiring them to take on risk for large, diverse bundles of episodes, may require more financial risk than they can bear. This is especially true given the historic financial pressures that hospitals and health systems continue to face."

Advisory Board's Daniel Kuzmanovich said he was surprised by how little attention TEAM is getting from hospital executives.

"The thing that surprises me most about the TEAM model is how little hospital executives are talking about it. We ran the numbers and the five procedures in the team model account for 6% of hospitals' Medicare inpatient volumes nationwide," Kuzmanovich said. "Yes, the model doesn't take effect until January 1, 2026, and yes, it will have to clear two major hurdles in a new administration and potential pushback or legal action before that happens. But if 6% of all Medicare inpatient volumes at 741 hospitals are experiencing a 1.5-2% cut, I'd expect more executives to be talking about it than is happening currently."

Rob Nation, senior director at Optum Advisory Services, said that TEAM will likely impact different hospitals in different ways.

"You're going to have some large hospitals and health systems that have capabilities to drive change … the problem is they may not be as nimble in doing that at scale across their network, and many will be impacted by this," Nation said. "On the other end of the spectrum, smaller hospitals don't have as many resources to change and invest to understand the analytics and change management required to shift their processes to support a successful performance in this program, which may be a challenge. We advise all potential participants — mandatory and voluntary — to understand the potential financial impact of this program which will yield insights into the right care transformation activities that can be put in place before January 2026. "

Rajiv Arya, a physician and senior director at Optum Advisory, added that hospitals "that have a greater percentage of their contribution margin driven by these procedures will have outside exposure." (Early, Modern Healthcare, 5/31; Raths, Healthcare Innovation, 4/17; Stulick, Skilled Nursing News, 5/15)