In recent years, healthcare reimbursement models in the United States have shifted from fee-for-service to value-based payment systems. The Transforming Episode Accountability Model (TEAM) by the Centers for Medicare & Medicaid Services (CMS) is part of this change. This model is set to launch on January 1, 2026, and will last for five years. TEAM aims to improve care coordination and cut costs for Medicare beneficiaries undergoing selected surgical procedures.
This article provides an overview of the TEAM model, its goals, its impact on healthcare administrators, and the use of artificial intelligence (AI) and workflow automation within this new framework.
The TEAM model focuses on high-cost surgical procedures that often create financial strain on the Medicare system. These include lower extremity joint replacements, spinal fusions, coronary artery bypass grafts, major bowel surgeries, and treatments for surgical hip and femur fractures. By concentrating on these surgical episodes, CMS aims to develop strategies that improve both quality of care and costs.
This model introduces a mandatory episode-based alternative payment system. Participating hospitals are required to coordinate care from the moment surgery occurs through a 30-day post-discharge period. This represents a shift from earlier models, which typically covered 90-day care episodes. TEAM seeks to create a more coordinated approach, ensuring that patients receive continuous care and minimizing fragmented service delivery.
The main goal of TEAM is to improve care quality while reducing costs in the Medicare system. CMS estimates that the initiative could save around $481 million each year, covering approximately 200,000 cases annually in selected Core-Based Statistical Areas (CBSAs).
With this model, policymakers aim to decrease hospital readmissions and streamline transitions in care, leading to better health results for Medicare beneficiaries. The expected financial savings are significant. Surgical episodes included in this model made up about 1.9% of total Medicare fee-for-service spending in 2021.
Participation in TEAM is mandatory for selected acute care hospitals in designated CBSAs. Hospitals will be categorized into three participation tracks, each with different levels of financial risk. Track 1 has no downside risk, allowing hospitals to adjust to team-based care without immediate financial penalties. Track 2 carries lower risks and rewards, especially for safety net hospitals. Track 3 involves greater risks with opportunities for larger financial gains or losses.
Hospitals must also work collaboratively with primary care providers to ensure that patients are referred to necessary services right after discharge. This focused effort aims to maintain care continuity and reduce complications from abrupt transitions between care settings.
A key part of the TEAM model is its focus on quality measures linked to financial outcomes. Participants will be assessed based on their success in meeting specific quality metrics, including patient safety, care coordination, and patient-reported outcomes (PROs). A Composite Quality Score (CQS) will require hospitals to value quality alongside cost efficiency.
Each hospital’s performance will be compared to baseline data. Those meeting quality benchmarks may receive additional payments, while underperformers could face financial penalties. Evaluations will also consider health-related social needs (HRSNs) to address unique patient challenges, particularly in underserved communities.
TEAM acknowledges the need for health equity, providing lower-risk participation tracks for safety net hospitals that support marginalized communities. Hospitals will be required to create health equity plans to tackle health disparities in their areas. This change aims to make the healthcare system more inclusive and responsive to the diverse needs of various populations.
To effectively manage the TEAM model, healthcare organizations are looking to AI and workflow automation. AI can greatly assist healthcare administrators handling the complexities of value-based care. Here are some ways AI and automation can improve operations under the TEAM model:
While the TEAM model has many advantages, implementing it comes with challenges. Providers have expressed concerns about the financial pressures tied to mandatory participation. Smaller and rural hospitals may find it harder to manage the risks linked to bundled payment models, which could affect their ability to meet quality and cost targets.
The American Hospital Association has warned that mandatory models may discourage participation among facilities facing financial challenges. Stakeholders encourage CMS to engage with providers to address these obstacles and refine TEAM’s design principles.
As the TEAM model approaches its launch, healthcare organizations must proactively prepare for this transition:
The Transforming Episode Accountability Model (TEAM) represents a change in care delivery within the Medicare system, focusing on high-cost surgical procedures while aiming for improved care coordination and reduced costs. As healthcare administrators prepare for TEAM’s rollout, integrating AI and workflow automation will be essential for managing value-based care’s complexities. By promoting collaboration among providers, prioritizing health equity, and implementing strong quality measures, TEAM could improve the care experiences of Medicare beneficiaries in the United States. Through careful preparation and the adoption of innovative technologies, stakeholders can set themselves up for success in this new healthcare environment.
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