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What are the financial risks in TEAM?
Hospitals are preparing for the launch of the Centers for Medicare and Medicaid Services’ (CMS) Transforming Episode Accountability Model (TEAM) in 2026.
To help you understand both the opportunities and financial risks for participants, DataGen put together a comprehensive white paper, CMS Transforming Episodes Accountability Model Financial Risk Guide.
[Access it Now for Key Updates]
Keep reading for highlights of what’s inside.
Exploring the goals and structure of CMS TEAM Model
CMS TEAM Model is designed to enhance care quality and cost-efficiency. It aims to revolutionize how hospitals manage patient care over 30-day episodes for specific surgical procedures by holding them accountable for the quality and cost of care delivered.
As seen on CMS’ Transforming Episode Accountability Model overview fact sheet, this model not only seeks to improve patient outcomes, but encourages hospitals to be more financially prudent and innovative in their approach to care delivery.
TEAM's structure involves mandatory participation with a focus on five surgical procedures. All hospitals may begin TEAM at an upside-only participation track for the first performance year but will advance into participation tracks with varying levels of financial risk in future performance years. This approach ensures that hospitals continuously work toward higher standards of care while balancing their financial responsibilities.
Identifying financial risks in TEAM model
There are different ways to view financial risk under TEAM. Of utmost importance to hospitals is the Net Payment Reconciliation Amount, which measures a hospital's actual Medicare episode expenditures against a predetermined target.
This is calculated during reconciliation, which will occur about six months after each performance year ends. A positive NPRA signifies financial gains, while a negative NPRA indicates potential losses, demanding repayment to CMS.
The TEAM participation tracks pose varying levels of financial risk as seen through maximum thresholds for losses and savings. Variability in patient volumes and the quality of care delivered can further complicate financial forecasting, making it imperative for hospitals to maintain high standards and efficient care coordination.
Strategies for mitigating financial risks
To successfully navigate the financial risks associated with TEAM, hospitals must implement comprehensive risk management strategies. A critical approach involves the use of advanced analytics to monitor and understand episode cost drivers.
By leveraging data like DataGen’s simulated TEAM episodes of care, hospitals can identify trends and make informed decisions to optimize their financial performance prior to the launch of TEAM. Discover additional strategies, such as standardizing care pathways and optimizing post-acute care, in our CMS TEAM financial risk white paper.
Optimizing care quality to influence financial outcomes
The quality of care delivered under TEAM will directly impact financial outcomes. Hospitals are incentivized to achieve a high composite quality score, as this score can improve negative financial reconciliation results if quality is good or reduce positive reconciliation results if quality is not sufficient. A strong emphasis on quality care not only enhances patient satisfaction but also aligns with the hospital’s financial goals.
Hospitals must prioritize efficient care coordination and patient-centered practices to improve performance on included quality measures. This entails implementing standardized treatment protocols, investing in staff training and using clinical decision support tools. By fostering a culture of excellence and continuous improvement, hospitals can achieve superior quality metrics that positively influence their financial outcomes under TEAM.
Preparing for mandatory participation in TEAM
Preparation is crucial for hospitals facing mandatory participation in TEAM. Conducting a thorough CMS TEAM readiness assessment allows hospitals to evaluate their capacity to manage financial risks and identify gaps in current practices. This assessment should focus on staff readiness, data infrastructure and existing care patterns to ensure a smooth transition into the new model.
Simulating financial scenarios can provide valuable insights into potential performance under TEAM's payment methodology. By modeling different scenarios, hospitals can assess the impact of various factors, such as stop-loss and stop-gain thresholds at each participation track, on their financial outcomes. This proactive approach enables hospitals to develop robust strategies tailored to their unique circumstances. Learn more about DataGen's advanced analytics in our Transforming Episode Accountability Model info sheet.
Leveraging data and analytics for financial success
In the era of data-driven healthcare, leveraging analytics is essential for financial success under TEAM. Real-time insights into Medicare episode costs and patient outcomes can empower hospitals to make strategic decisions that enhance both quality and financial performance. By using analytics dashboards, hospitals can track performance metrics and identify areas for improvement.
Regularly reviewing CMS TEAM guidelines and updates is also crucial for staying informed about the latest developments. Participating in educational webinars and engaging with expert partners can provide hospitals with the knowledge and tools needed to navigate the complexities of this model successfully.
Ready for the path ahead?
The CMS Transforming Episode Accountability Model presents both challenges and opportunities for hospitals. By understanding the financial risks and implementing effective mitigation strategies, hospitals can enhance care quality and achieve financial success.
Proactive preparation and strategic use of data will be key to thriving under this innovative model. For those seeking further insights and tools, download our comprehensive guide on navigating the financial intricacies of CMS TEAM.
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