Selected acute care hospitals will coordinate care for Medicare beneficiaries who undergo one of the episodes included in TEAM 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.

TEAM will have three participation tracks⁴:

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

CMS and CMMI leadership have considered mandatory bundled models several times since CMMI was created in 2010.⁶ TEAM is the first major payment model that CMMI made mandatory since 2016.⁷ CMMI has not yet indicated if the mandatory nature of TEAM is a one-off trial or the start of a new trend.

The majority of the value-based care models created by CMMI, such as accountable care organizations (ACOs), work on the principles of generating shared savings at the population-level.⁸ But in Advisory Board’s recent Path to Value Survey,⁹ we found 68% of responding hospitals and physician groups participate in episode-based payment arrangements, namely bundled payments. TEAM reinforces the popularity of bundled payments and their potential impact on both value-based care and the healthcare industry.

TEAM is not the first time CMMI has attempted a mandatory bundled payment. Mandatory bundled payments were previously introduced under the Episode Payment Models and Cardiac Rehabilitation Incentive Payment Model for conditions including heart attacks, bypass surgery, and hip and femur fractures in 2016.⁷ However, each program was sunset or made voluntary when the federal administration changed in 2017.⁷

The ACO and population-based VBC models⁸ CMMI has created predominantly affect independent physician groups and primary care. Payment models that engage specialists and hospitals are more difficult to administer, so they have been rarer. While TEAM builds on the concepts of previous episode- and bundle-based models, the primary affected stakeholder is hospitals (and subsequently health systems). And notably, many of the markets and hospitals affected by TEAM have historically been less exposed to value-based models compared to geographies and institutions. It will be worth tracking how this focus on procedural risk-based payment affects surgical specialties like orthopedics, cardiovascular surgery, and gastroenterology  — and how CMMI continues to expand VBC models to other stakeholders and conditions.

TEAM will be heavily scrutinized and potentially challenged in the courts. Hospitals and industry groups such as the American Hospital Association are likely to question the model’s legality. This scrutiny is likely to be increased by the Supreme Court’s 2024 ruling to overturn the Chevron deference (under which federal courts had given federal agencies latitude to interpret statutes they administered).

Systems will also need to:

• Make sure they’re sending people to the highest quality partners and the right level of care.
• Ensure partners have the full information they need to safely care for patients.
• Make the transition to TEAM as seamless as possible.
• Be responsive to requests for additional information or support so patients don’t have to be readmitted.