The Transforming Episode Accountability Model (TEAM) introduces a revolutionary approach to payment reform by focusing on mandatory bundled payments for surgical episodes. In order to succeed under this payment system, hospitals must align care delivery, manage costs, and improve outcomes. A Value-Based Enterprise (VBE) offers a targeted solution tailored specifically for TEAM participation. By fostering collaboration, leveraging data, and driving quality improvement, VBEs enable hospitals and providers to thrive in the TEAM environment. This edition of Insights InHealth explores the TEAM model, the role of VBEs in supporting it, specifications for TEAM-focused VBEs, and the benefits for hospitals, physicians, and other providers.
Understanding the TEAM Model
The Transforming Episode Accountability Model (TEAM), set to begin on January 1, 2026, emphasizes accountability for cost and quality during defined surgical episodes. These episodes start with an inpatient stay or outpatient procedure and continue for 30 days post-discharge. TEAM incentivizes providers to reduce costs, enhance outcomes, and coordinate care effectively by offering shared savings opportunities for success and financial penalties for failures.
The TEAM model covers five surgical episode categories:
Lower Extremity Joint Replacement (LEJR): Includes hip, knee, and ankle replacements but excludes small joint replacements.
Surgical Hip and Femur Fracture Treatment (SHFFT): Covers surgical hip fixation procedures without joint replacements.
Spinal Fusion: Focuses on cervical, thoracic, and lumbar spinal fusions.
Coronary Artery Bypass Graft (CABG): Includes elective and emergency coronary revascularization procedures.
Major Bowel Procedures: Encompasses small or large bowel surgeries.
The model requires hospitals to meet cost and quality benchmarks, such as reduced readmissions, lower complication rates, and improved patient-reported outcomes, to avoid financial penalties and capture shared savings. To learn more about the TEAM model and its specific requirements, visit the CMS website page for TEAM at https://www.cms.gov/priorities/innovation/innovation-models/team-model.
How VBEs Will Bolster Success in TEAM
VBEs provide a structured framework for hospitals to achieve the cost, quality, and care coordination goals required by TEAM. Unlike general value-based care strategies, VBEs for TEAM focus specifically on the needs and challenges associated with bundled surgical episodes. Below are a few value-added attributes of VBEs when applied to TEAM participants.
1. Collaborative Infrastructure for TEAM Episodes
VBEs facilitate formal partnerships between care entities, ensuring shared accountability and seamless communication. Participation agreements clarify responsibilities, creating a unified approach to patient care. For example, a surgeon, hospital, and post-acute care provider might collaborate under a single VBE to ensure continuity across the patient’s surgical episode.
2. Aligned Financial Incentives for Surgical Episodes
VBEs structure shared savings and risk-sharing agreements around specific episodes, encouraging collaboration and adherence to TEAM benchmarks. Surgeons and post-acute care providers might share in savings achieved by avoiding preventable complications, incentivizing coordinated efforts to reduce costs and improve outcomes.
3. Targeted Data Analytics and Episode-Specific Insights
Data analytics within a TEAM-focused VBE emphasize episode-specific performance metrics. For example, analytics for LEJR episodes might track surgical site infections, length of stay, and physical therapy adherence, while CABG metrics focus on cardiac rehab participation and medication compliance. These insights help identify areas for improvement and enable proactive interventions. VBEs afford flexibility in the outcome measures to which additional payments to surgeons can be tied.
4. Care Coordination Across the Episode Continuum
TEAM demands tight coordination across inpatient and outpatient settings. VBEs support the contribution of in-kind resources to support care coordination efforts. For example, a VBE participant can provide care navigators who specialize in managing surgical episodes, ensuring smooth transitions between hospitals, post-acute care, and outpatient rehabilitation to another VBE participant at a fraction of the full cost of that resource. Standardized care protocols reduce variability and ensure adherence to evidence-based practices.
5. Patient Engagement Tailored to Episodes
Patient engagement strategies within a TEAM-focused VBE are designed around the unique needs of surgical episodes. For example, LEJR patients receive educational materials on pre-surgical preparation and post-surgical mobility exercises. CABG patients access digital tools for medication reminders and cardiac rehab scheduling. These tailored interventions improve adherence, reduce complications, and enhance patient satisfaction. VBEs can incorporate the protections of the safe harbor for patient tools and supports to provide free resources to patients in a manner compliant with the Anti-Kickback Statute and Beneficiary Inducement Statute.
6. Continuous Improvement for Episode Outcomes
VBEs drive ongoing quality improvement specific to TEAM episodes. Hospitals can use real-time data to identify trends, such as higher-than-expected readmission rates for spinal fusion patients and implement corrective measures. Root-cause analyses tailored to each episode type ensure that interventions address specific challenges. Additionally, feedback loops from providers and patients allow VBEs to refine care protocols and ensure alignment with TEAM benchmarks. Continuous improvement often involves the contribution of in-kind supports, which can be offered by hospitals to their physician partners at discounted rates, utilizing the flexibilities offered by VBEs.
Specifications for a VBE Supporting Team
To succeed in the TEAM model, a VBE must be specifically tailored to the surgical episodes and metrics defined by TEAM. The following specifications address the unique needs of TEAM-focused VBEs:
1. Participants
A TEAM-focused VBE requires the involvement of entities directly related to the surgical episodes covered under the model:
Surgeons: Specializing in orthopedics, cardiovascular, gastrointestinal, and spinal procedures. These specialists lead the professional surgical component of the episode.
Hospitals and Health Systems: Responsible for inpatient and outpatient care during the initial surgical episode and ensuring care transitions.
Post-Acute Care Providers: Skilled nursing facilities, inpatient rehabilitation centers, and home health agencies manage recovery after discharge.
Outpatient Rehabilitation Providers: Physical therapists or cardiac rehab specialists are critical for improving functional outcomes in episodes like LEJR or CABG.
Community-Based Organizations: Addressing social determinants of health, such as transportation to follow-up appointments or access to nutritious meals.
2. Value-Based Purposes
A TEAM-focused VBE is designed to achieve the following value-based purposes:
Improve Episode-Specific Quality: Reduce complications, readmissions, and surgical site infections for each covered episode.
Reduce Episode Costs: Minimize unnecessary resource utilization, such as redundant imaging or extended inpatient stays.
Enhance Care Coordination for Surgery-Related Transitions: Focus on handoffs between acute, post-acute, and outpatient providers to ensure continuity.
3. Value-Based Activities
Examples of the value-based activities of a TEAM-focused VBE include:
Develop Care Protocols Specific to TEAM Episodes: For example, standardized discharge instructions for LEJR patients might include mobility exercises, while CABG protocols emphasize early participation in cardiac rehab.
Analyze Targeted Analytics for Each Episode: Analytics track metrics such as hospital length of stay for bowel surgeries or physical therapy adherence for joint replacement patients.
Improve Care Coordination Across Settings: Specialized navigators ensure that spinal fusion patients transition seamlessly to outpatient physical therapy or pain management services.
Provide Patient-Centric Education: Pre- and post-operative guidance tailored to each episode’s recovery requirements, including managing wound care, physical therapy, and medication adherence.
4. Target Patient Population
The VBE’s target population includes patients undergoing TEAM episodes, such as:
LEJR Patients: Often older adults with osteoarthritis who may need additional support for mobility and home safety.
CABG Patients: High-risk individuals requiring close monitoring of cardiac function and lifestyle changes post-surgery.
Spinal Fusion Patients: Patients with chronic back pain, requiring extensive post-surgical rehabilitation and pain management.
Strategic Benefits of a TEAM-Focused VBE
Implementing a VBE tailored to TEAM provides significant advantages for hospitals, other provider facilities, and physicians:
1. Financial Benefits
TEAM-focused VBEs enable hospitals to capture savings by aligning incentives, reducing costs, and preventing penalties. Risk-sharing agreements protect individual providers from financial losses, while shared savings encourage collaboration. By investing in episode-specific resources, such as care navigators or advanced analytics, hospitals can sustain long-term improvements in both quality and financial performance. VBEs offer increased flexibilities to help realize and share the financial incentives associated with these improvements.
2. Improved Patient Outcomes
By enhancing the pathways for care coordination and adherence to evidence-based protocols, VBEs ensure better clinical outcomes, such as lower readmission rates, reduced complications, and higher patient satisfaction. Focused interventions for high-risk patients prevent adverse events and improve recovery. Engaging patients in their care plans fosters adherence, leading to better health and fewer avoidable healthcare encounters.
3. Operational Efficiency
The flexibilities afforded by VBEs help streamline workflows specific to TEAM episodes, eliminating redundancies and improving resource utilization. For instance, standardized discharge protocols for LEJR patients reduce unnecessary imaging or follow-up visits. Real-time data sharing and communication platforms ensure providers have the information they need to deliver coordinated care. The VBE framework ensures that such initiatives can be executed with reduced compliance risk.
4. Enhanced Collaboration
VBEs create a culture of teamwork by aligning incentives and establishing shared accountability for outcomes. Surgeons, hospitals, and post-acute care providers work together to achieve TEAM benchmarks, fostering trust and cooperation. The compensation flexibilities afforded by VBEs offer significant enhancements to existing provider alignment mechanisms.
5. Competitive Advantage
Hospitals that excel under TEAM differentiate themselves as leaders in value-based care. This attracts payers, employers, and patients seeking high-quality, coordinated care. Physicians benefit from being part of a high-performing network, enhancing their reputations and professional satisfaction. By augmenting the probability of success in TEAM, VBEs provide a unique pathway to such benefits.
6. Advancing Health Equity
By partnering with community-based organizations, VBEs address social determinants of health, such as access to transportation, nutritious meals, and safe housing. These partnerships ensure that vulnerable populations receive equitable care and support during their surgical episodes. By targeting these critical health-related social needs, VBEs help reduce disparities in outcomes and improve the overall patient experience. This focus on health equity aligns with societal goals of providing fair and inclusive care for all individuals. The VBE framework minimizes the potential compliance pitfalls of such efforts.
Conclusion
The Transforming Episode Accountability Model (TEAM) demands innovative solutions to meet its goals of high-quality, cost-effective, and coordinated care. A TEAM-focused Value-Based Enterprise provides hospitals and physicians with the tools and framework needed to succeed. With a tailored structure and activities to the specific requirements of TEAM episodes, VBEs enhance care delivery, improve outcomes, and secure financial sustainability.
To learn more, watch for upcoming editions of Insights InHealth that will outline specific VBE strategies for each of the TEAM episodes.
