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- Is Your Hospital in TEAM?
As government agencies are winding down the Administration’s term and both Houses of Congress are now in the last lull before the end of the year/118th Congress/Presidential term leading up to the lame duck, we in health policy are busier than ever!
Icons by Notioly
CMS is putting out their annual Proposed and Final Rules, updates to Innovation Center Models, and much more.
The CMS Innovation Center has been cranking out models over the last year, all aligned with their Strategy Refresh and Specialty Care Strategy (links at the end of the post).
On August 1st, CMMI finalized the Transforming Episode Accountability Model (TEAM) as part of the IPPS Final Rule, with some important changes in the Final Rule you want to know about.
They also surprisingly announced the Core Based Statistical Areas that have been selected to participate in the model through an algorithm-based random selection. Not to give it all away, but there are some BIG markets included.
For a refresh on the TEAM Proposed Rule, see my Part I and Part II posts here:
Why am I making such a big deal about the TEAM Model?
CMS has put out only a few mandatory models. These models have to go through the Notice and Comment Rulemaking (NCRM) process like annual regulatory payment updates. Updates to TEAM, such as the addition of episodes and other changes CMS already says they are considering for next year leading up to TEAM starting in 2026, will also go through NCRM.
Not all models that have been proposed for mandatory participation have been finalized. The most notable is the Radiation Oncology Model. Due to heavy opposition by the ASTRO, the model was put in a holding pattern, with no plans to come back to it recently in HHS’ bi-annual Agency Rule List.
(If you want to check out the Spring 2024 Rule List, you can find it here.)
The TEAM Model is opting hospitals in after more than a decade of voluntary episodic models and many important learnings. Some CBSAs chosen for TEAM have many hospitals that have participated in the past. Some have few.
CMS did have a goal of opting in more CBSAs with lower voluntary participation in prior and current voluntary models and with a higher percentage of safety net hospitals.
Refresher:
Here’s what’s most exciting to me about TEAM:
Accountable Care Organizations (ACOs) and other VBC model participants are often challenged to find levers that partner hospitals are willing to pull to reduce avoidable/unnecessary spending and improve quality, mainly because hospitals lose revenue when individuals need less emergency and inpatient hospital care.
TEAM incentivizes hospitals to make important changes that can have out outsized impact on the trajectory of an individual’s recovery after surgery (the program starts in 2026 with five surgical episode categories, shown below). They are at financial risk for the cost of the stay and the 30 days after that.
What will help the hospital be successful, if we define success as a reduction in spending and improvement in quality of care and outcomes? Read on!
Let’s Dig In.
In Part I, I’ll cover the topline highlights of the Final Rule on TEAM, including changes from the Proposed Rule based on stakeholder feedback. CMS still has the 2026 IPPS Proposed Rule and Final Rule to make additional updates to the TEAM Model prior to the model beginning.
Hospitals have about 17 months to prepare. So if your hospital is in one of the CBSAs chosen, it’s a great time to start pre-planning!
CBSAs Chosen for TEAM
The Office of Management and Budget (OMB) defines the CBSAs, which are a combination of metropolitan and micropolitan areas.
CMS also agreed with commenters and will permit BPCI-A and CJR participants who remain in the programs until they end to voluntarily opt into TEAM if their hospital’s CBSA wasn’t chosen for participation.
DRGs and HCPCS Codes in TEAM
page 1926 of Final Rule
Final TEAM Tracks and Their Corresponding Financial Risk
The below is a change from the proposed rule. In row three, hospitals that meet criteria will be able to remain in a maximum of 5% upside and downside risk in years two through five. However, that will mean a lower upside than those hospitals enjoyed in PY 1, where there upside will be 10% (with no downside risk).
Page 1828 of Final Rule
Discount Factor
CMS changed their approach to the discount factor from the proposed to final rule. Instead of a 3% discount factor, it will be 1.5% for CABG and Major Bowel Procedure DRGs and 2% for LEJR, SHFFT, and Spinal Fusion DRGs.
Low Volume Thresholds
Comment:
A couple of commenters stated that the proposed low volume threshold could result in outlier episodes skewing the results without statistical significance. A low volume threshold should account for natural variation.
Response:
We thank the commenters for their concern regarding outliers and variation in low volume hospitals. We will not be finalizing this low volume threshold and will propose alternatives in future notice and comment rulemaking prior to the model start date.
In Part II, I’ll cover more details about TEAM, the roles and opportunities of hospitals, post acute sites of care, home-based care providers, outpatient rehabilitation therapy providers, and more. I’ll also be sharing more about the success levers how to pull them.
Questions? Book an INTRO call here.