CMS Announces Proposed Mandatory Episode-Based Model

Reimbursement; CMS

Last week, following the release of the FY 2025 Inpatient Prospective Payment System proposed rule, the Centers for Medicare and Medicaid Services (CMS) announced a mandatory episode-based, post-surgical Transforming Episode Accountability Model (TEAM). The model is part of CMS’ continued efforts to increase provider participation in value-based care initiatives, advance their specialty strategy, and further CMS’ goal of having all Medicare beneficiaries in a relationship accountable for quality and total cost of care by 2030. TEAM is designed to ensure that certain mandated hospitals are accountable for high quality care for five high volume, high expenditure surgical episodes up to 30-days post-discharge. 
Hospitals will be selected from core-based statistical areas (CBSAs). CMS indicates that it plans to oversample certain CBSAs, such as those with minimal engagement in similar previous models and those with safety net hospitals located in them, to increase the reach of value-based care. Specific geographies will be released in the late fall.  

Key Components: 

  • TEAM would run for five years starting January 2026, ending December 31, 2030. Comprehensive Care for Joint Replacement (CJR) is scheduled to end December 2024 and Bundled Payment for Care Improvement Advanced (BPCI-A) December 2025.  
  • The model offers three different tracks with varying degrees of risk and reward. 
  • Surgical episodes include: 
    • Lower Extremity Joint Replacement  
    • Surgical Hip & Femur Fracture Treatment  
    • Coronary Artery Bypass Graft (CABG) Surgery  
    • Spinal Fusion 
    • Major Bowel Procedure  
  • Each 30-day episode will include most Part A and Part B services including skilled nursing facilities, outpatient therapy, home health, hospice, durable medical equipment, readmissions, and more.  
  • Hospitals will be required to make primary care referrals. 
  • Target prices will be calculated based on all non-excluded Medicare Parts A and B services included in an episode and risk adjusted.  
  • Performance will be assessed against target price and three quality measures:  
    • Hospital readmission  
    • Patient safety 
    • Patient-reported outcomes 
  • Beneficiaries can be attributed to ACOs and TEAM episodes concurrently.  

Additional Resources: 
AHCA responded to CMS’ Episode Based RFI last year and will be providing comments to the proposal. Please contact Nisha Hammel​ with questions.