Image by Oleksandr Pidvalnyi from PixabayThe Centers for Medicare & Medicaid Services’ (CMS) Transforming Episode Accountability Model (TEAM) will launch in 2026, requiring hospitals to take responsibility for the cost and quality of care for select surgeries.
While the model is aimed at hospitals, it also has big implications for ambulatory surgery centers (ASCs), especially for procedures that can be performed in both inpatient and outpatient settings.
“The team model is the largest mandatory bundled payment model ever introduced by CMS, and it is mandatory for hospitals that were randomly selected across 188 core-based statistical areas throughout the United States, which represents about a quarter of all hospitals nationally,” Brian Fuller, managing director in ATI Advisory’s value-based care design and delivery practice, told ASC News.
ATI Advisory is a health care research and advisory firm that provides insights and strategic guidance to organizations focused on aging, long-term care and complex care needs.
The TEAM model will initially cover five procedures: coronary artery bypass grafts, major bowel procedures, hip and femur fracture treatment, lower extremity joint replacement, and spinal fusion.
For 30 days after discharge, hospitals will be accountable for virtually all Medicare Part A and Part B costs, including post-acute care and readmissions.
Why ASCs are in the picture
Although TEAM is focused on hospitals, it does have implications for ASCs.
That’s mainly because two of the included conditions span both inpatient and outpatient settings, with those conditions being lower extremity joint replacements and spinal fusions.
Those procedures can be triggered not only by inpatient admissions but also by codes performed in an ASC designated as a hospital outpatient department (HOPD), Fuller said.
“The caveat to the combined episodes is they also have an outpatient trigger, which are defined by HCPCS codes, and can be initiated in an ambulatory surgery center that is designated as a hospital outpatient department,” he said.
That blended design changes the math for hospitals and creates a direct incentive to shift more volume into outpatient surgery.
“There’s an incentive in the inpatient, outpatient, combined conditions to move a higher percentage of cases to the ambulatory setting, because that’s how you’re going to win under the pricing model,” Fuller said.
Regional pricing
Another feature of TEAM that could ripple through the ASC market is its regional pricing methodology.
Rather than basing benchmarks solely on a hospital’s own historical performance, CMS will compare providers across nine large census regions, Fuller said.
“What a regional-based model does is it groups the hospital into a region that gets priced together,” he said. “So the hospital has to win under the model. And these regions are very large. They are based on the Census divisions across the U.S., and there are only nine of them across all 50 states plus territories.”
For procedures like joint replacement and spinal fusion, the share of outpatient cases varies widely by region and by hospital.
“The lowest hospital in the model is performing only 31% of their lower extremity joint replacement in the outpatient setting,” Fuller said. “The highest performing hospital is 87%. So if you’re that 31% hospital, you’re behind the eight ball in any of these regions.”
For ASCs, this variation could mean challenges and opportunities. Hospitals will be under pressure to close the gap by migrating more procedures to outpatient settings, creating a pathway for stronger ASC partnerships, Fuller said.
“Under the model, we know an outpatient setting is less expensive than an inpatient setting of care,” Fuller said. “What we also know is that there is much less downstream spending, typically for patients who have their surgery performed in the outpatient setting over the inpatient setting.”
That means ASCs can take on more cases while also showing they help cut down on readmissions and follow-up care, he added.
“Beneficiaries typically prefer outpatient settings,” Fuller said. “They have a better experience. There’s less complications. So there could be a role in the quality measures as well for the ASC.”
Partnership opportunities
TEAM is also pushing new types of collaboration across the care continuum, Fuller said.
“We’ve seen the beginning of conversations around where partnerships provide benefit presurgically,” he said.
That could include ASCs working with outpatient therapy providers on prehabilitation programs, or coordinating with home health agencies for pre- and post-surgical visits.
“There might be a home visit before the surgery by a home health provider to kind of do a home assessment, understanding discharge barriers, understanding risks in the home, and then designing, for example, a joint replacement care pathway,” he said.
Despite the clear implications, Fuller said that ASC awareness of TEAM remains uneven.
“It’s a pretty wide range we found across the marketplace,” he said. “There’s certainly a subset that knows the model well. They’re actively working on it. There is another subset that knows it, but they are distracted by other priorities. And then there’s yet a third category that knows very little and has done very little about the model.”
Still, there are no major changes expected before TEAM goes live, and CMS has signaled it will expand the program.
“We would expect changes after Jan. 1,” he said. “CMS has been very vocal that they plan to expand the model and add more conditions, and that they would do that in the remaining process.”
For ASCs, that could mean even greater involvement if CMS decides to bundle additional inpatient/outpatient blended procedures.
“Hospitals and ambulatory surgery center providers need to understand where their region is, what the regional variation is, and then how they have performed against that history,” he said. “That’s how you win.”
