Hospitals still face a heavy lift getting ready for the TEAM bundled payments model

For the quarter of U.S. hospitals that will participate in the mandatory Transforming Episode Accountability Model (TEAM) starting Jan. 1, 2026, the preparation curve has been steep.

In early August, among more than 90 client hospitals of the solutions company Rainfall Health, none was where participants soon need to be, said Eddie Qureshi, founder and CEO.

One major health system told Qureshi it was not inclined to get ready because this latest iteration of bundled payment was unlikely to be implemented under a new presidential administration. That was just before CMS updated its guidance and implicitly affirmed that the model would progress as scheduled.

“It’s going to survive this very different administration because fundamentally, the principles of it are so aligned [and] bipartisan,” Qureshi said. “Because it’s really about managing costs and increasing accountability.”

Ramping up the stakes

Key components of TEAM that separate the scheduled five-year model from prior efforts to promote bundled payment include the 30-day episode span for the five included surgical procedures (coronary artery bypass graft, major bowel procedure, lower-extremity joint replacement, surgical hip and femur fracture treatment, spinal fusion). That’s down from 90 days in the Bundled Payments for Care Improvement Advanced (BPCIA) model.

That difference could translate to less of a focus on post-acute care, said Robert Mechanic, MBA, executive director with the Institute for Accountable Care.

Hospitals also will be benchmarked against regional peers, including any nonparticipants in TEAM, rather than against their own past performance, Mechanic noted during a session at the Virtual Value-Based Payment Summit in early September. His organization’s analyses suggested 63% of hospitals would lose money in TEAM if the model were to begin imminently.

The financial stakes are significant, Qureshi noted in an interview, especially in Track 3, which is mandatory for most participating hospitals starting in the second year and puts 20% of revenue at risk for the covered episodes.

Hospitals can choose to participate in an upside-only track for the first year, or the first three years for safety-net hospitals. But the model’s approach to benchmarking means participants cannot rest easy in year one, said Bill Nordmark, president and CEO of the healthcare transformation solutions company Enlace Health.

“All it takes is some folks in your region to start performing better, and those benchmarks [subsequently] getting better faster than you can perform, and you get a compounding problem,” Nordmark said during the summit webinar.

Building a data framework

Healthcare stakeholders generally view TEAM as evolutionary, not revolutionary, expanding on lessons gleaned from surgical episodes in prior bundled payment models, Thomas Tsai, medical director for health policy research with the American College of Surgeons, said during the summit webinar.

But the impetus on hospitals is higher in TEAM, Qureshi said.

“You’re in charge of not just certain components of care,” Qureshi said. “You’re in charge of every component of care for that 30-day episode, whatever the patient needs. And you have to get them [to the care site], you have to pay for it, you have to make sure that the outcomes are there, and you have to get that data back.

“In some ways, it’s kind of trying to undo not just the accountability components that have become more opaque over time, but it’s actually trying to undo some of the stronghold of relying solely on your internal EHR, and [it’s] actually saying, look, that’s one of the tools that you need, but you also need to be more interoperable for everything the patient needs.”

The model requires hospitals to expand their data infrastructure in ways they might not have considered previously. It will be important to establish data streams that help hospitals holistically gauge costs and quality for the five procedures.

“You can’t just rely on your own internal EHR anymore because you actually have to go out in the community to hospice facilities, to skilled nursing [facilities] that you don’t own, to virtual physical therapy, primary care, durable medical equipment [suppliers] who don’t have even their own EHRs that you can just rely on interoperability with,” Qureshi said.

Getting on the same page

Other keys to early success in TEAM include close hospital-surgeon collaboration, summit panelists said. Tsai noted that surgeons generally are paid on a 90-day global-payment basis, meaning they already have financial incentives to ensure care is efficient and optimal.

For other hospital-based clinicians, “whether it’s through direct gainsharing, I think the opportunity is really aligning those incentives within the health systems to be able to empower better clinical care,” Tsai said.

“You’ve got to get [clinicians] to the table,” said Michael Barbati, vice president for government programs with Advocate Health. “One of the ways we get them to the table is comparing themselves to their peers and being very transparent with the data.”

“You’ve actually got to administer the program and be giving those providers the monthly data to show them what their performance is so they continue to get the outcomes,” Nordmark said. “If you do, they’re going to [understand] the change and they’ll see the dollars that are equated to that change. But if you don’t provide the administration, which is a big thing, you’re going to lose.”

Worthwhile changes

While recognizing the looming challenge for hospitals, experts see transformational promise in TEAM.

For example, protocols for enhancing post-surgery recovery could be improved through the model, Tsai said, potentially making early discharge to the home more viable in more cases.

“The real opportunity is using TEAM as a way to align incentives to truly implement and disseminate evidence-based guidelines for optimal patient recovery,” he said.

“One of the things we love about this model is the reconnection back to primary care and that warm handoff that’s sort of hardwired in TEAM,” Barbati said. He noted that in BPCIA, Advocate found savings were 8% to 10% greater for patients with a strong primary care relationship, compared with clinically similar patients who lacked such a relationship.

Protocols that succeed in TEAM can be used to promote standardization across payer segments, thereby driving widespread meaningful practice change, panelists said. It won’t be a surprise if the model expands in upcoming years to include both more hospitals and additional procedures.

“If we have to redesign healthcare, what would we do? We would give incentives for better quality, better outcomes,” Qureshi said in the interview. “We would make it simpler and say you as the hospital should be the one in charge of the patient’s care so that they only have one touchpoint, because we know that’s what improves it.”

And success will generate rewards.

“In some ways, [TEAM is] making it simpler and giving you a massive financial boost to think about it strategically and say, look, if I do this right, I could actually end up making a ton of money on these things that I’ve been doing,” Qureshi said.