CMS to Test Mandatory 5-Year Episode-Based Alternative Payment Model

People with traditional Medicare who undergo surgery may experience fragmented care, which can lead to complications and prolonged recoveries. To address this issue, and building on lessons learned from previous episode-based payment models, the CMS Innovation Center has proposed a new mandatory alternative 5-year episode-based payment model that would launch in 2026. .

The mandatory Transformative Episodes Accountability Model (TEAM) would aim to improve the patient experience from surgery to recovery by supporting coordination and transition of care between providers and promoting successful recovery that can reduce risks. avoidable hospital readmissions and emergency department use. TEAM episodes would begin with lower extremity joint replacement, surgical treatment of hip femur fracture, spinal fusion, coronary artery bypass grafting, and major bowel procedures.

Under the proposed model, selected acute care hospitals would coordinate care for people with Traditional Medicare who undergo one of the surgical procedures included in the model and would assume responsibility for the cost and quality of care from surgery to first 30 days after the Medicare beneficiary. leaves the hospital.

All hospitals selected to participate in TEAM will be required to refer patients to primary care services to support continuity of patient care and positive long-term health outcomes.
With a health equity focus, the model would offer certain flexibilities, such as allowing safety-net hospitals to participate in a pathway with lower levels of risk and reward and a pricing methodology that includes adjustments to take into account to neglected people.

Hospitals required to participate would be based on select geographic regions across the United States. The proposed TEAM design includes a one-year planning path, which would allow organizations to assume full financial risk. TEAM would have three paths of participation: Path 1 would have no risk of downside and would have lower levels of reward for the first year; Pathway 2 would be associated with lower levels of risk and reward for certain hospitals, such as safety-net hospitals, during years 2 to 5; and Pathway 3 would be associated with higher levels of risk and reward during years 1-5.

Provider organizations have largely been reluctant to adopt mandatory alternative payment models. When CMS requested input on the design of TEAM last year, the American Hospital Association expressed concerns to CMS about the impact of mandatory participation. “This means that many organizations may not be adequately sized or in a financial position to support the investments needed to transition to mandatory bundled payment models. Requiring them to take risks on large, diverse packages of episodes may require more financial risk than they can bear. “This is especially true given the historic financial pressures that hospitals and health systems continue to face,” the AHA wrote.

The AHA cited a Government Accountability Office report that found that mandatory participation could negatively impact patient care and financial sustainability if participants are unable to leave the model. It also found that mandatory participation could impact organizations’ ability to support other voluntary models for which they might be better equipped.

“Furthermore, much of the debate about mandatory participation has been based on the high dropout rates from historical models. However, rather than seeking mandatory participation, we encourage CMS to address the model design features that led participants to withdraw from historical episode-based payment models in the first place,” the AHA wrote. “For example, many decisions to leave were due to concerns about index pricing, specifically the ratchet effect where index pricing was based on prior years’ performance, requiring organizations to compete against their own best performance.”

In a statement, Soumi Saha, senior vice president of government affairs at Premier, said that “while Premier believes that voluntary models with appropriate incentives are ideal as they allow providers to select participation based on their mission, capabilities and realities market, Premier appreciates CMS’s efforts to seek input from stakeholders last year to help inform the design of its proposed mandatory bundled payment model. As CMS evaluates the design of the new mandatory Transformative Episode Accountability Model (TEAM), Premier strongly urges the agency to incorporate key design principles to help ensure the model achieves its intended purpose of improving beneficiary care, reduce Medicare spending, and increase care coordination across healthcare. settings. Premier also encourages CMS to continue monitoring the model for implementation challenges and actively engage with stakeholders to ensure the model offers meaningful opportunities for care transformation.”

The CMS Innovation Center said the model is designed to complement longitudinal care management through policies that align with Accountable Care Organizations (ACOs) and promote referral to primary care. Under TEAM, a person receiving care from providers in an ACO could still be in an episode if they receive one of the surgeries included in TEAM at a hospital selected to participate in TEAM. The Innovation Center added that allowing a person with traditional Medicare to be included in TEAM and ACO initiatives would help promote provider collaboration to find opportunities to improve quality of care and reduce Medicare spending.

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